'Debt Bomb' Nations Could Follow Dubai Into Crisis

Dubai's financial implosion could be the beginning of a fresh financial crisis as investors lose faith in the ability of heavily indebted countries to pay their bills. Analysts warn that in the worst-case scenario, the Dubai crisis could lead to mass defaults in emerging markets and even in heavily leveraged Western economies like Ireland and Greece.

The amounts involved in Dubai aren't big enough to destabilize the world economy by themselves, but some investors fear the crisis there foreshadows other "debt bombs" in countries that borrowed heavily to weather the recession. "Whether you are Dubai, Greece, Spain, Ireland, or the UK, you can print as much money as you want, but at the end of the day you have to pay the interest on your debt," one analyst tells the New York Times.
(More Dubai debt crisis stories.)