Dubai's fantasy skyline seems to have been built on sand
• Datablog: Dubai's financial crisis - how much money do banks lend around the world?

I am phenomenally stupid. Stupid in every conceivable way except one: I'm dimly aware that I'm stupid. This means I spend much of my time assuming the rest of the world knows better, that everyone else effortlessly comprehends things I struggle to understand. Things like long division, or which mobile phone tariff to go for. In many ways, this is a comforting thought, as it means there's a limitless pool of people more intelligent than myself I can call on for advice.

But sometimes I find out my gut assumption was right all along, and it's a deeply unsettling experience. Take Dubai. I'm no expert on Dubai. Never been there, and only read about it in passing. The one thing I knew was that everything I heard about it sounded impossible. It was a modern dreamland. A concrete hallucination. A sarcastic version of Las Vegas. Dubai's skyline was dotted with gigantic whimsical behemoths. There were six-star hotels shaped like sails or shoes or starfish. Skyscrapers so tall the moon had to steer its way around them. It had immense off-shore developments: man-made archipelagos that resembled levels from Super Mario Sunshine. One was in the shape of a spreading palm tree. Another consisted of artificial islands representing every country in the world in miniature. As if that wasn't enough, a proposed future development called The Universe would depict the entire solar system.

When I first read about all this stuff, I felt a bit uneasy. None of it sounded real or even vaguely sustainable. I'd been to Las Vegas a few times and seen crazy developments come and go. The first time I visited, the hot new attractions were the Luxor, an immense onyx pyramid, and Treasure Island, a pirate fantasy world replete with lifesize galleons bobbing outside it. Roughly halfway between the pair of them, a replica New York was under construction. By my next visit, the novelty value of both the Luxor and Treasure Island had long since palled, and they now seemed less exotic than Chessington World of Adventures. Meanwhile, unreal New York had been joined by unreal Paris and unreal Venice.

But even at their most huge and demented, none of these insane monuments looked as huge and demented as the projects being announced in Dubai. Yet the novelties, while larger, were wearing thin even more quickly. Dubai's The World archipelago hadn't even opened when the same developers announced The Universe, thereby making The World sound like a rather diminished prototype before anyone had moved in.

In Las Vegas the grimy engine that paid for each new chunk of mega-casino was there in plain sight at street level: woozy drunks thumbing coins into slots 24 hours a day. Hundreds of thousands of them, slumped semi-conscious in rows like dozing cattle hooked up to milking machines. Ching ching ching, slurp slurp slurp. It was like watching a gigantic crystal spider increasing in size as it coldly sapped the husks of its victims. Ugly, but at least it made sense.

Where were the coin slots in Dubai? I had no idea. I just gawped at the photographs and was secretly impressed by the cleverness of the people who'd managed to generate so much money they could safely take leave of their senses and construct 300ft buttplug skyscrapers and artificial floating cities shaped like doodles scribbled in the margins of sanity. To my dumb, uncomprehending eyes it looked like a collection of impossible follies. But what did I know? Clearly the people actually paying for all this stuff knew precisely what they were doing.

But ah and oh. It appears my uninformed gut reaction, that slightly worried vertigo shiver, the hazy sense of "but surely they can't do that . . ." may have been precisely the correct response. Now it's in trouble, the world's financial markets seem shocked and surprised, like Bagpuss being disappointed to learn that the mice from the mouse organ couldn't really create an endless supply of chocolate biscuits from thin air. They should've phoned me for advice. If only I'd known. I could have charged a fortune. But then I'm so dumb I'd probably have blown it investing in an artificial Dubai archipelago shaped like Snoopy's head or something.

In the cold light of 2009, Dubai resembles a mystical Oz that was somehow accidentally wished into existence during an insane decade-long drugs bender. Those psychedelic structures, pictured in a fever by the mad and privileged, physically constructed by the poor and exploited, now look downright embarrassing, like a Facebook photo of a drunken mistake, as though someone somewhere is going to wake up and groan, "Oh my head . . . what did I do last night? Huh? I bankrolled a $200bn hotel in the shape of a croissant? I shipped the workers in from India and paid them how little? Oh man! The shame. What was I thinking?"

The world's tallest skyscraper, the Burj Dubai, is due to open in January. It looks like an almighty shard of misplaced enthusiasm: a lofty syringe injecting dementia directly into the skies, a short-lived spike on a printed readout, or a pin pricking a gigantic bubble. Not a shape you'd want to find yourself unexpectedly sitting on, in other words. Just ask the world's financial markets, once they've finished screaming.