Dubai economy is in better shape than the US

Dubai economy is more robust than that of the US because the emirate’s debt problem is manageable and can be controlled, according to a world renowned American author and former practitioner of mathematical finance.

Nassim Nicholas Taleb, whose book “The Black Swan” described how unforeseen events can roil global markets, said” “Even if you take perhaps the worst of emerging markets, a place like Dubai, you realise Dubai is more robust than the United States. Dubai has been borrowing to put buildings on postcards. It can stop that, but America needs to borrow just to open the doors in the morning. That’s why I’m not comfortable with the United States.”

Taleb, a former trader, was speaking at a mutual funds conference in Manama, Bahrain on Monday.

“Dubai, they’re not depending on debt, it’s not a chronic debt, it’s not like the American person who has this dependency on debt and has been building it since the 80s. It’s not a great model but it’s more robust than the United States, simply because their debt situation can be controlled a lot better than the US,” Bloomberg quoted Taleb as saying.

Last month, Taleb lambasted US President Barack Obama and his administration for weakening the country’s economy by seeking to foster growth instead of paying down the federal debt. Governments globally need to cut debt and avoid bailing out struggling companies because that’s the only way they can shield their economies from the negative consequences of erroneous budget forecasts, Taleb said.

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