History Repeats: Dubai Is Contained -Yeah Right!

History keeps repeating itself. Just like in 2007 when the warning signs of the huge crisis that we are in and will be in for a long time was becoming apparent with the so obvious and gigantic and unmistakeably impossible to miss (but somehow they were "missed") signs of the debt crisis that will ignite the whole issue, people that should be doing things about these chose to ignore them and say "everything is fine and subprime problems are contained". I am referring to Bernanke and Paulson and Geithner of course along with the so called "economists". The same "economists" are now talking about how Dubai is a one of thing and is contained within itself. Sound familiar? Similar to 2007 the signs are ignored and markets continue to bubble and any dip as was the case with the Dubai news coming out are quickly recovered. We all saw how that ended in 2008. The system is crashing people. There is only so much more time left. The Fed and its undisclosed operation can only keep the markets up for so long. Eventually stocks will crater and go to levels where they should be. S&P 500 is going to have a whole new meaning below 500. The only way that will not happen is if the dollar is completely valueless and in a nominal way market is above that level. But do not mix nominal with real and do not think that owning stocks will protect you in such a scenario. That is far from the truth and what will happen. Dollar going down is bad for US companies and US stocks. US assets are generally overvalued compared to the rest of the world. When the dollar keeps sinking part of this imbalance will disappear and US stocks will continue sinking. Part of the reason US stocks have done so well is due to the US Dollar's place as the reserve and global trade currency. That is undeniably changing and at this point can not be reversed. Too late thanks to the Fed's undisclosed operations as well as irresponsible other operations we all know off.

One last thing I want to point to is that it was quite a coincidence that Dubai came out on Thanksgiving Day to give out the new. They told the news on a day when the US markets were closed.One can not help wonder if some powerful people from this side of the Atlantic told the Dubai people not to burst the US market bubble because they knew US market would have been crushed had it not been closed. Since the rally in the US markets is totally speculative and against any piece of fundamental news we see, they must have mortally been afraid of this. Like Bear Stearns and subprime, this can only end bad. With a lot of counties and cities bankrupt in the US as well as states such as California, which is the 8th biggest economy of the world, there is a lot to fear in terms of more trouble that will come along the way. Not to even mention a lot of other indebted countries that will not be able to pay their debts. For some more interesting views on this countries not being able to pay their debts please read "Confessions of an Economic Hit Man" by John Perkins. It is a great book. You will realize that these debts were never meant to be paid back to start with, but the timing is going to be very bad. It is ironic that these debt failures could be the reasons why the "global empire" effort might crumble as defined in the aforementioned book.