While WMR does not specialize in financial intelligence as it affects investing, from our sources in the Middle East and Asia we are receiving reports that the world financial system is teetering on the brink of a major shock.
One reliable report has the world economy receiving a major jolt next spring.
Adding to global financial jitters are the debt problems incurred by Dubai World, the Dubai government-owned mega-firm that announced that it requires a standstill agreement on the collection of $59 billion in liabilities by its creditors. Oil-rich Abu Dhabi, which has maintained a tormented relationship with its United Arab Emirates partner, Dubai, has signalled it will bail out Dubai World on some of its liabilities.
Dubai World's major creditor is HSBC, which took over the role when it gained control of Royal Bank of Scotland during last year's credit crisis. WMR has learned that the Bank of England is also helping to bail out Dubai, something that will be kept secret so as to not antagonize the opposition in Parliament during a time when the Labor Government has already seen a plunge in its popularity ratings in polls. Dubai World's port operations have some major supporters, including former President George W. Bush, his father George H. W. Bush, and Prince Charles. The Bushes and Charles are close to the Dubai ruler, Sheikh Mohammad bin Rashid al-Maktoum, who is being blamed for Dubai's financial crisis by spending billions on the world's tallest skyscraper and enlisting the likes of soccer star David Beckham and his wife Victoria, a former Spice Girl, to pitch Dubai World's Nakheel Property Group opulent Palm Island and the world map of islands in the Persian Gulf.
Although WMR has learned that the Saudis, in addition to Abu Dhabi, will bail out Dubai's interest payments for a short while, there is another country in the region that stands ready to move in to assist Dubai and that could change the political and military balance of power in the region. Iran, which is being subjected to a propaganda onslaught from Israel and its political allies in Washington, London, and Paris, stands ready to further plug the interest hole in Dubai. If Iran moves in with its own cash reserves to help Dubai's bail out, the West can forget about imposing economic sanctions on Tehran over its nuclear program.
As news of Dubai's financial woes hit the media circuit last week, the London Stock Exchange saw a computer crash that left dealers unable to trade for three and a half hours. Coincidentally or not, the London Stock Exchange is 21 percent owned by the Dubai government.
There is another powerful player that may influence the future of the world's economic health: China. Although President Obama recently visited Beijing to bring U.S.-Chinese relations closer, it is China's longstanding relationship with Vice President Joe Biden that Beijing apparently values the most. WMR has learned that in 1979, Biden met with Chinese leader Deng Xiaoping to negotiate replacement National Security Agency (NSA) listening posts in western China's Xinjiang region's towns of Korla and Qitai to replace those lost in Iran when the Shah was overthrown. The signals intelligence bases were key to NSA's ability to monitor Soviet missile and nuclear tests. The CIA has considered Biden a favored interlocutor with China since his work to secure the two listening posts for NSA in the late 70s.