The trigger for the next collapse is out there – I thought it would be the Chinese or US bubbles making it all come crashing down, but it could end up being this Dubai mess:
Dubai’s debt woes may worsen to become a “major sovereign default” that roils developing nations and cuts off capital flows to emerging markets, Bank of America Corp. said.
“One cannot rule out — as a tail risk — a case where this would escalate into a major sovereign default problem, which would then resonate across global emerging markets in the same way that Argentina did in the early 2000s or Russia in the late 1990s,” Bank of America strategists Benoit Anne and Daniel Tenengauzer wrote in a report.
A default would lead to a “sudden stop of capital flows into emerging markets” and be a “major step back” in the recovery from the global financial crisis, they wrote.
Of course the real problem is that there hasn’t been any recovery at all, anywhere. What the bankers and bureaucrats have been calling “recovery” has actually just been smoke and mirrors as central banks have printed money and used it to prop up stock prices and other asset bubbles. This sort of thing is only sustainable if a lot of wealth is being created to back up the government paper – but that isn’t happening.
We’ve moved a lot of money around, we’ve allowed some very rich people to cover their positions so that no matter what happens, they’ll end up rich. That’s all, folks. Just wait, now, for the crash. Maybe we’ll dodge the bullet right now, but we’re eventually going to have to go through the second half of this crash – delayed and made worse by efforts to stop it.
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