planet’s collapse is starting in Dubai
Posted by Ivo Cerckel on August 21st, 2009
A very simple image illustrates the global insolvency characteristic of today’s global financial system: the financial base upon which banks, insurers and global financial institutions were resting, is collapsing in the same way as a city built on a huge fault would collapse. (1)
A real-life building collapse happened this month in Dubai. (2) (3)
Dubai is a perfect example of this image of a city built on soft ground (in this case, on sand); indeed, the Emirate is now experiencing a general price collapse of all the wonderful real estate investments made in the past few years. (4)
Just one year ago, property prices in Dubai were surging to record peaks undeterred by a real estate slump in major markets, but they have since gone into free fall and have yet to find the bottom. Dubai house prices are plunging into uncharted territory, said AFP four days ago. (5)
This planet’s collapse is starting in Dubai where the financial base upon which banks, insurers and global financial institutions were resting is collapsing in the same way as a city built on a huge fault would collapse.
“Omnia cadunt et morituri moriuntur.”
Everything collapses and the mortals will die.
Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/
(1)
Two major processes at the centre of the phase of global geopolitical dislocation
- Excerpt GEAB N°32 (February 16, 2009)
http://www.leap2020.eu/Two-major-processes-at-the-centre-of-the-phase-of-global-geopolitical-dislocation_a3694.html
(2)
Twitter spreads news of Dubai building collapse around the world
By Adam Flinter, hub editor
Published: August 16, 2009, 19:40
http://www.gulfnews.com/nation/General/10340901.html
Dubai: As news of the building collapse in Deira broke, thousands of people were following the latest developments on micro-blogging site Twitter.
(3)
From The Sunday Times August 16, 2009
Dubai collapse sparks £3bn in legal claims
(Steve Crisp/Reuters)
Grinding to a halt: British firms are owed £400m
http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article6797762.ece
SNIP
The collapse of Dubai’s once-booming construction industry has created a backlog of legal claims totalling almost £3 billion.
Disputes over unfinished contracts and outstanding payments are stacking up in the emirate’s arbitration court, according to Building magazine.
(4)
Note to the text quoted in note (1)
Two major processes at the centre of the phase of global geopolitical dislocation
referring to
Dubai Property Prices May Fall Up to 50 Per Cent: Research Issac John
2 February 2009 http://www.khaleejtimes.com/darticlen.asp?xfile=data/business/2009/February/business_February61.xml§ion=business
(5)
Dubai house prices plunge into uncharted territory
By Ali Khalil (AFP) – 4 days ago
http://www.google.com/hostednews/afp/article/ALeqM5hyQZBDKz-1scTSlHP2F0HtrpoNxA
SNIP
DUBAI — Just one year ago, property prices in Dubai were surging to record peaks undeterred by a real estate slump in major markets, but they have since gone into free fall and have yet to find the bottom.
No related posts.
August 26th, 2009 at 07:32
Hi Ivo,
This writing is so wrong my fellow truthseeker.
I will write exactly why in the coming weeks but I give a few quick comments.
With a return to real market values for property, what can be wrong about affordable housing? That’s exactly what Dubai’s ruler has had in his mind for years and that’s exactly what western countries also need, a return to the mean. But western goverments think they have to stop this return to the mean with their QE monetary bullshit (=suicide) which was caused the housing bubble in the first place.
You also know the Fed planned and executed the events that created two bubbles in the small space of ten years (Nasdaq + real estate). They have ensconced us now in the biggest financial crisis in modern history. Unfortunately, few are able to foresee what devastating affect it will have on the entire world: hyperinflation.
Why do western governments keep this bubble alive? You know the answer, they only care about keeping alive the current power structure, say hello to our own lost decade (like people in Japan have lived through). Not so for Dubai! The correction took place in the past 9 months, quick and harsh. Almost no government debt (they made their first debt in the end of 2008 which is managable in contrary to the west, it was their first time that Dubai government had to collect funds by issuing debt since its existance in 1830).
Falling real estate prices fell even more because of the reducement of population with lots of expats who lost their job leaving. Dubai doesn’t want expats with no income. People in Dubai can only be happy about crashing real estate prices which have halved in the past 12 months.
This creates opportunity for entrepreneurs who have the skills to add productivty to the UAE economy but could’nt pay for it before because housing/offices became unaffordable in the booming times.
Dubai has 4 million inhabitants, only a small part of that live on those well-built artificial islands which are also a symbolic way of showing their ambition and those islands will always have more value than other non-seafront property. That’s what Dubai is all about, creating more value than anywhere else in the world, their secret? Ambition and an honest business environment with almost no western style corruption and theft enforced by government which we like to call ‘taxes’ here.
So, who loses in this game? Maybe a bunch of with-debt-overloaded western risktakers who thought they would become rich with speculating in the fastest growing region of the world?
I think the fundamentals are very positive for the Middle East’s most liberalised economy (Dubai). The growth and vision that has accompanied the rise of this astonishing city has only started and this crisis will be a new chapter in Dubai’s succes story. Why? Smart people from the west who are fed up with their corrupt goverments will be looking for ways to escape this slave system where they have to work hard to pay for the debts those moron politicians made.
Ivo, I would like to hear your comments.
August 26th, 2009 at 09:27
Jeroen,
If the planet’s collapse starts in Dubai, Dubai will also be the first place to rebuild the planet.
“We” have two options to rebuild it.
Either “we” continue doing what “we” did before, that is, letting Leviathan regulate everything thereby causing the collapse.
Or we can opt for the way Ludwig Erhard chose in Germany after the war.
In 1948, Erhard was elected Director of Economics by the Bizonal Economic Council. On 20 June 1948, the Deutsche Mark
(Ivo: the Gulf Co-operation Council (GCC) single currency merged with Chinese yuan for ASEAN, the Association of South-East Asian Nations?)
was introduced.
Erhard abolished the price-fixing and production controls that had been enacted by the military administration. (1)
Microsoft Corp. and Yahoo! are merging. The merger could still be blocked by the antitrust authorities, so-called authorities.
As Alan Greenspan, former chairman of the US of A central bank, said more than 45 years ago:
The world of antitrust is reminiscent of Alice’s Wonderland: everything seemingly is, yet apparently isn’t, simultaneously. It is a world in which competition is lauded as the basic axiom and guiding principle, yet “too much” competition is condemned as “cutthroat.” It is a world in which actions designed to limit competition are branded as criminal when taken by businessmen, yet praised as “enlightened” when initiated by the government. It is a world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge’s verdict — after the fact. (2)
Monday’s news is that U.S. internet giant Yahoo! signed a deal to acquire Arab world’s largest online media company, Maktoob, for an undisclosed fee. (3)
Will this deal also be “scrutinised” by the antitrust authorities, so-called authorities?
We’ll see.
Maktoob today have more than 280 employees with offices in Amman, Dubai, Cairo, Riyadh, and Kuwait. (4)
Dubai has the opportunity to show the wold how Greenspan was right when he said antitrust laws are immoral.
Duibai has the opportunity to show the world how to follow Erhard’s example.
Dubai has the opportunity to introduce the (GCC) single currency merged with Chinese yuan for ASEAN.
Dubai has the opportunity to repeal the price-fixing and production controls.
Dubai has the opportunity to repeal antitrust laws.
Ivo Cerckel
honestmoney@maktoob.com
http://twitter.com/ivocerckel/
NOTES
(1)
http://en.wikipedia.org/wiki/Ludwig_Erhard
(2)
ANTITRUST, BY ALAN GREENSPAN, Based on a paper given at the Antitrust Seminar of the National Association of Business Economists, Cleveland, September 25, 1961. Published by Nathaniel Branden Institute, New York, 1962,
reprinted in: Ayn Rand, (ed.) , “Capitalism – the Unknown Ideal”, Signet Books, 1967
http://www.polyconomics.com/ssu/ssu-980612.htm
(3)
Business Media Yahoo! to acquire Maktoob.com
Aug 25, 2009 at 00:32
By Dylan Bowman http://business.maktoob.com/20090000367702/Yahoo!_to_acquire_Maktoob_com/Article.htm
[The exclamation point [!] after [Yahoo] makes it difficult to paste the link on this blog. Try to paste both parts of the link separately in your browser.]
(4)
http://en.wikipedia.org/wiki/Maktoob
August 26th, 2009 at 09:57
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