Dubai's sovereign debt problems were pushed off the front pages by the economic troubles of Greece, Spain, and Portugal. But they shouldered their way back into the news Wednesday as Reuters reported that the kingdom will officially ask for a standstill on payments of $22 billion in debt issued by state-owned Dubai World.According to Reuters, the Arabic language daily Al Ittihad says that the restructuring process could take six months. The repayment problems are so severe that CNNMoney reports there are rumors that Dubai's state-run private equity firm Istithmar World could sell the Queen Elizabeth II ocean liner.

On November 25, Dubai said it needed to delay payments on $25 billion in debt from its property units Nakheel and Limitless World. The emirate's neighbor Abu Dhabi provided $4.1 billion in capital to tide the Dubai-controlled entities over for an unknown period of time.

The news from Dubai shows how far the sovereign debt issue has spread. Several countries in southern Europe face debt problems, exacerbated by high government spending, a slow global economy, and trouble collecting tax revenue. The issues among these E.U. members and Dubai have caused concern that eventual downgrades of the sovereign debt of Japan, the U.K., and the U.S. could lead to a rising cost of raising money in the capital markets to cover national deficits.

A sale of assets is not likely to bring in the kind of capital that any of these nations need to cover the sovereign debt problems. Who can afford the QE II anyway?