The Guru College

Here It Comes

They have been saying it won’t happen in the Middle East. They have been saying that nothing will touch the growth of Dubai, Riyadh or any of the oil-rich countries in the area. And now, Saudi is showing the first signs of a liquidity problem.

“Interbank rates in Saudi Arabia have more than doubled since early May as credit markets tightened and investors withdrew bets on Gulf states revaluing their dollar-pegged currencies to fight inflation.”

This should be interesting. What happens to Dubai when the speculators can’t make money flipping houses? The same thing that happened in the US – a massive “correction” in the economy, and the possibility of a government bailout. Maybe the housing prices here will finally come down.

UPDATE: Saudi claims nothing’s wrong.

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