Where We Are in this Parabolic Gold Rally?

Another Debt Cloud Rises; It Won’t Be the Last

$60 billion worth of Dubai state company debt threatened by default hung over the market last week. To understand more about Dubai and who runs it, click on this link to a BBC article.

Fears that the events on the Arabian Peninsula could lead to a second wave of the financial crisis caused a serious sell-off in Asia last week.

However, the influence of the Dubai event on the US market is still difficult to assess due to light trading on Friday. As far as the consequences of the coming default or potential restructuring of the Dubai debt on the world financial system, we agree with Cumberland Advisors’ point of view.

“The panic associated with the financial difficulties of Dubai’s government-controlled Dubai World is having ripple effects into commodities, developing countries, and other markets. Such contagion seems to have become commonplace now, as the short-run interests of traders in worldwide markets are matched against the interests of long-run investors.” (more)