GOODBYE DUBAI

Dubai World, the government investment company for the Dubai state has told creditors they would 'delay' debt payments. The market sees this as default and

is reacting in an economic explosion around the world. The debt is supposedly 60 to 80 billion dollars, but they are suspected of owing much more.

Talk about a tinsel town, this creation at the edge of the desert is a monument to excess. Exclusive stores with unbelievably expensive merchandise, towering office and apartment buildings (and the world's tallest building )looks like a mirage in magnificence. Unfortunately it is a tower of debt and a monument to foundation-less society, much like the fiat debt money used to construct it.

Dubai is one of five states in the United Arab Emirates (UAE) which is wedged between Oman, Saudi Arabia and the Persian Gulf. Dubai is a free port and is the residence of the headquarters for many multinationals, but does not have any petroleum resources.

The UAE does and as a consequence is a rich country, having the highest income per

capita in the Middle East. It has been assumed by the lenders that any Dubai's debt

would be backed by the UAE. The Thanksgiving Day announcement, however, was a world wake-up call. The announcement came at the beginning of a 4 day religious holiday, so the resolution has been postponed until sometime next week.

Stock markets and forex trading have reacted sharply. More than one world banks has exposure, notably HSBC, Barclay's and Royal Bank of Scotland are thought to be

affected. Each of the former have been recent recipients of bailout monies. U. S. banks also have some risk, but so far not specified.

The threads binding the world economies together are threatened to come apart, not

so much as to the 60-80 billion dollars-- a meager sum in today's multi trillion dollar

central bank finance scheme -- but as to the daisy chain derivatives which insure

this debt through CDS (Collateralized Debt Securities) . Participants fear a domino effect in this cross-collateralized maize, which is an unregulated and largely undisciplined free-for-all.

It is early yet in this potential unwinding. The central banks and their minions are already hard at it to stave off any public awareness of the problem. The dollar stopped declining and the U.S. stock market went up, having previously acted inversely. Plunge

Projection Team?

Some call what's ahead a "double dip recession", but it is merely the next event in the world's Greater Depression which began in 2007/2008.

The bankers may succeed in papering over this default, but will be unable to stop the

actual deteriorating economic conditions of which Dubai's default is symptomatic.

With Love and Kindness,

THE HATMAN