The Dubai World Company who is currently unable to repay some 60 billion in loans had the equity markets wound pretty tight Friday but everything seemed to settle down Monday. However the overnight markets indicate that Tuesday could be a rough day. If you’re not familiar with Dubai World they have the giant palm tree sand sculpture that you can see from space. Built to service the pretend economy created by the financial services industry it will probably go down in history as a giant white elephant that you can see from space.
You may remember one of their sister companies, Dubai Ports World, a favorite of the Bush Crime Family to take over all our major seaports. The ones not already controlled by Red China.
Dubai World is not however the worst threat to the world economy and not the largest over leveraged entity likely to fail. A ridiculous amount of money has been created out of thin air by the world’s central banks in an attempt to keep up with the Federal Reserve’s wholesale printing of money over the past fifteen years. Everything is leveraged to the hilt and any deflation will drag all those debt laden companies under.
In a world where everybody works for a corporation, the fallout will be severe.
Already in the US one in eight adults and one and four children receive food stamps. Only 2/3 of those eligible receive nutritional assistance and although reformed in 2007 is still not adequate and food banks are struggling to keep up. In really blighted areas, 50% of residents receive food aid.
Pontiac Michigan has 35% unemployment and standing in the line to sign up for food stamps can take all day. Massive layoffs of city workers including about half the city police force. The governor has declared a state of emergency and replaced the city’s officials. The population of Pontiac is about 700,000 and so probably has about 280,000 people who have or would like to have a job. This is about how many jobs that are officially being lost each month in the US.... Pontiac syndrome is slowly spreading across the country. www.prairie2.com