As the world awaits the opening of U.S. markets, the heralded example of free markets and unregulated capitalism, Dubai, sent markets tumbling from Singapore to London.Dubai default fears push futures sharply lower and Dubai debt crisis raises financial turmoil fears
HONG KONG — The fallout from Dubai's debt crisis rippled across the globe Friday, raising concerns of another wave of financial turmoil and showing how vulnerable the world economy remains despite signs of recovery
Touted as an example for the United States to emulate by right wing economists and talking heads, What Dubai could teach the US about capitalism (2007)
Dubai is a key center of hawala, an unregulated private system of payments and currency trading between the Middle East, South Asia, and Southeast Asia. Similar to a banking system of clearing checks, hawala brokers facilitate transactions and money transfers for a 1%-2% commission. For less money than a typical bank rate, the centuries-old payments system eases currency and gold transfers between Dubai's many migrant laborers and their families abroad.
Unfortunately, hawala is under pressure from the US government, which is trying to impose its own bank reporting and record keeping regulations throughout Dubai. The US regulatory efforts are a misguided attempt to prevent money laundering and the financing of terrorism. (emphasis added)
Dubai is delivering a sucker punch to investors who hoped that the steady recovery of American markets since last March would modestly correct and then keep advancing.
Obviously Americans are not the only skeptics.
Free Market flawed, says survey: In the global poll for the BBC World Service, only 11% of those questioned across 27 countries said that it (free-market capitalism) was working well.
For a long time, progressives expressed skepticism about the ability of Dubai to maintain its unregulated commercial growth, October, 2006: Fear and Money In Dubai
The irony is that the Dubai failure slows the U.S. recovery. Rush Limbaugh and Sean Hannity will not doubt blame it on President Obama.