How The Dubai Financial Collapse Affects You

In the recent boom years, no other nation spent money like Dubai, building the world's tallest building, man-made islands and by the hundreds, multi-million dollar red tile roofed mansions similar to some of those in Beverly Hills.

But Dubai has gone bust and as one of the seven United Arab Emirates (U.A.E.), it and its lenders thought it had a U.A.E. bailout. But that bailout is shrinking. For the U.A.E. didn't cause the problems nor does it want to bear the brunt of them.

The magnitude of Dubai's debts is not publicly known but is in the many billions of dollars. The global lenders that loaned it staggering sums of money during the boom years may have to write off most of their investment.

Little is known as to who these lenders are and what they are owed but they likely include some of the "too big to fail" U.S. banks and other banking giants. Many have already gotten government bailouts and depending upon their reserves, may come back for more, meaning money from your pocket and mine.

These awful surprises keep happening because we are no-where near the end of the global financial meltdown. And what affects Dubai or other nations affects us all.

But take heart. At some point, the industrialized nations will have to acknowledge the magnitude of their financial problems and unite to try to solve them. However, the longer it takes these nations to solve their problems, the greater the likelihood they could bankrupt themselves and with it, all that you have worked for.

You can make a difference if you will raise your voice for "transparency," a word that used to be used by a U.S. presidential candidate, and for fiscal sanity. By doing so, you will be helping to secure your financial security and that of future generations.

Dick [last updated, 1/20/10]