Monday, November 30, 2009
Dubai Financial Crisis: America Is Next
Economist all around the world fear that the Dubai financial crisis could have a major impact around the world. The inability of the government of Dubai to refinance debts taken on by its largest owned company, Dubai World, has sent shockwaves throughout the world prompting many throughout the world to ask not only how severe the crisis is, but exactly is Dubai and who is in control of it. The Dubai crisis has lead to a panic situation around the world in financial market as banks and financial firms lost in markets around the world. One of the countries expected to be hit the hardest by the crisis is the country of India. A large number of Indian companies have exposure there in the region, and over 4.5 million Indian work and live there. It came as a shock to many, when the Dubai government disclosed that it would not be able to service the 80 billion dollar debt it has raised through the Dubai World and property unit Nakeel. Dubai said it wanted the creditors to agree to a debt standstill as it restructure Dubai World and works around the finances to pay it's creditors back. This financial crisis should be a warning to the United States government which is 12 trillions dollars in debt and that is not including Social Security, Medicaid and Medicare IOU that are trillions of dollars in debt. The debt crisis in Dubai could be a precursor into the future of America because what if China, South Korea, Japan and Saudi Arabia demand a "Margin Call" from the United States Government we would not be able to pay our creditors back with full interest. Therefore, that means the United States would have to sell some of there most valuable assets to satisfy it's creditors. The United States Government might have to raise taxes to a all-time high to payback it's creditors which will basically destroy the American economy. The United States could default on there loans which would throw the whole world into a major financial crisis that could end up starting a world war. Finally, this is why the United States Government should be reifinacing there loans with China, where the United States could payback all there loans to there creditors within 20 years. This system should consist of the federal government balancing the budget every year and using any extra taxpayer dollars to payback our outstanding loans. This should be the number issue on President Obama agenda not Obamacare which would pass on more unsubstantial debt on to our children.