Happy Thanksgiving 2009*
(*Unless you’re got a stake in Dubai –then Good Luck.)
We have known this one was coming for a while. Each month a new highrise was rising toward the sky. Each month a new island about a meter above sea level formed. Each month, there were less and less buyers for either properties.
Each month what was banked as a new culture, a new world, a new place for business and clean living –started crumbling. In the end it is nothing but a mirage.
This was part of my conversation over the past year and half –what gets built has to be sustainable, it HAS to HAVE the fundamentals that make life sustainable. Otherwise, it all turns into a mirage sooner or later.
Welcome to Dubai. Now the numbers stop adding up, and the buyers are gone and bankers are left with debt. And cannot be paid back with more debt…
So, you Invested in the Dubai Dream –NEXT –You have been Rick…:
Happy Thanksgiving, Investing Lessons and Getting Rick Rolled –all in one…
So, What Went Wrong?
My argument all along was that in order to build a castle where there was once just sand dunes, one must start with the core of what sustains a community. Once must start with the basic needs that sustain us and then work from there.
Just because there is money and oil and both flowing does not mean magically an entire population can be sustained, no matter how grandiose the setup is.
Sooner or later the basic elements of society will take hold and provide the ground work (foundation) to maintain a large population.
In the case of Dubai:
- Planning/architecture from the US and Europe.
- Construction management from Asia –usually Korea.
- Finally, the buildings erected by Indians and various other Asians working for very little, as imported labor.
My argument is that not everything can be ‘outsourced’ –just about everything has to be self sustained and from the ground up, established at home –in this Dubai. Everything from the feeding of the builders to the development of the mega-cities has to be done partly from home grown talent and be sustainable into the distant future.
It’s Been Tried Before:
I am reminded of a group of people who live mostly in a river delta, some below sea level, the others barely over it –but these people happen to be the worlds 4th largest producers of vegetables. Over many centuries, the Dutch have established a society that is sustainable, and although at this time it reaches just about every corner of the crowded country, it’s a sustainable community that will manage, even with rising seas.
On the other hand, the mirage in the dunes was just waiting for one shock, and it most likely will be wiped out in many aspects with only a small recovery in the coming years. If the development of much more fuel efficient automobiles and power productions takes a hold, then watch out –it will just be a ghost city!
The Rich Sage:
I’ve taken some time off. I had to “reset” my own mindset and various aspects of my work. In this case, I am now implementing what I had discussed just a month ago, as my “road map” going forward.
It is a combination of web development –mostly done by others in the team, while I focus on the investment aspects of the business model.
From time to time, it is absolutely necessary to look around and to make sure what is being done is working. In my case, I was just getting overloaded, and the great forward-progress not the best. The solution was for me to focus on what works for me, using my own planning, while leaving web development to other experts who could take my vision and develop the many properties that I had started.
So, I am back. I feel empowered and ready to forge ahead.
Carpe Diem,
Rich Sage