News that the state of Dubai in the United Arab Emirates threatened to default on $59 billion in debt if their creditors didn't give them a six month extension rocked Wall Street today according to numerous reports. The New York Times quoted a Hong Kong trader as saying, "But it is not the trigger for a brand-new crisis. Yes, the magnitude of the situation is dramatic for Dubai. But Dubai is not America — and a property crisis in Dubai will not cause the same global crisis as a property crisis in the States.”

That may be true for now, but it's an important reminder that America is not the only country in the world that allows banks (and governments) to engage in legalized fraud. Eventually, it catches up to everyone fiat money systems touch, particularly when they're debt-based (as nearly all modern currencies are). In the long run, we can expect more and more such international crises to keep popping up, including here in America by 2011 when Alt-A and Option ARM mortgages reset their interest rates. The expected numbers of such resets are virtually identical to the number of sub-prime mortgages that reset in 2008, kicking off the current crisis.