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The Dubai lesson.

November 26, 2009

Dubai World, the government’s flagship holding company can’t pay its bills after building a ‘Paradise’ for tourists. Global stock markets fall, gold rises, European stocks are shaken, and the world’s financial markets are trying to cope with a crisis they know nothing about its psychology.

Dubai is an oil poor country surrounded by oil rich relatives who build a lavish life style for themselves. When you are poor, living among rich relatives, you will borrow and borrow and build and build, pretending that you have wealth too. You don’t study behavioral economics, so you don’t understand the social and financial ‘vacuum’ you are creating, but you believe you do. You don’t treat money with respect because you don’t know that money is alive in its own way. You see it only as a commodity to acquire so you could continue to build, In short, you act like the sub-prime mortgage lenders in News York  who’s short sight brought on us the severe recession of 2008.

Is there a way out?

Yes, the Dubai lesson is that all governments should learn to effectively regulate financial landing and borrowing.

Would it happen?

Probably not, unless you study Shakespeare, “Neither a borrower nor a lender be,” Baron Rothschild, “It isn’t enough for you to love money – it is also necessary that money should love you,” or the Irish proverb, “Money swore an oath that nobody who did not love it should have it.”

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