Dubai's imploding bubble is another lesson that needs to be taken heed.
Inflationism can be initially seductive and temporarily gratifying, but comes at an excruciating price as a result of non-economically feasible projects or misallocation of resources.
The chart from Bespoke Invest is a harrowing depiction of the unraveling Dubai Bubble cycle as reflected on its stock market benchmark.
Bespoke explains, ``Since 2004, Dubai's stock market has taken investors on a wild roller-coaster ride. Unfortunately, investors are at the bottom of the ride and not the top at the moment. From the start of 2004 to November 9th, 2005, the DFM General rose a whopping 748% as oil prices shot up along with the global economy. After the DFM General peaked on 11/9/05, however, it declined 57% over the next year and a half. The index staged a 72% snap-back rally from 4/3/07 to 1/15/08, but then it jumped on the global meltdown bandwagon and has declined 71% since then. Currently, the DFM General is down 78% from its peak on November 9th, 2005, but it is still up 83% since the start of 2004."
To quote Professor Ludwig von Mises, ``Continued inflation inevitably leads to catastrophe."
Inflationism can be initially seductive and temporarily gratifying, but comes at an excruciating price as a result of non-economically feasible projects or misallocation of resources.
The chart from Bespoke Invest is a harrowing depiction of the unraveling Dubai Bubble cycle as reflected on its stock market benchmark.
Bespoke explains, ``Since 2004, Dubai's stock market has taken investors on a wild roller-coaster ride. Unfortunately, investors are at the bottom of the ride and not the top at the moment. From the start of 2004 to November 9th, 2005, the DFM General rose a whopping 748% as oil prices shot up along with the global economy. After the DFM General peaked on 11/9/05, however, it declined 57% over the next year and a half. The index staged a 72% snap-back rally from 4/3/07 to 1/15/08, but then it jumped on the global meltdown bandwagon and has declined 71% since then. Currently, the DFM General is down 78% from its peak on November 9th, 2005, but it is still up 83% since the start of 2004."
To quote Professor Ludwig von Mises, ``Continued inflation inevitably leads to catastrophe."
No comments:
Post a Comment