Posted on 02/11/2011 2:25:29 PM PST by mojito
....Egypt has no oil, insignificant industry, small amounts of natural gas, and 40 million people who are about to become very, very hungry. Without figuring out how to feed the destitute bottom half of the Egyptian population, all the talk of "models" is window-shopping.
[....]
What happens next? Egypt's stock market has collapsed, and its pound has fallen to the lowest level since 2005, with some brokerage-house analysts warning of a 20% decline during the next several weeks. Foreign investors have deserted the market for Egyptian treasury securities, so the central bank will print money to give to the banks to buy government debt.
After half a century of military rule since the 1952 Free Officers' coup, Egypt's wealth is concentrated in the hands of the old regime and its family and friends. If this regime is overthrown, and the corrupt nexus of army and business faces expropriation, the entire liquid wealth of Egypt will make a run for the border, along with its current proprietors.
This is a formula for a classic currency breakdown and galloping inflation, which invariably means panic purchases of commodities and hoarding: a collapse of the Egyptian pound, uncontrolled capital flight, inability to finance a current account deficit in the $15 billion range, and chaos in the Egyptian economy. Egypt might appeal to the international community for help, but the largesse offered to 450,000 Gazans will not extend to the 40 million Egyptians living on less than $2 a day.
Egypt's rulers had a good run as an American client. They have not yet absorbed the enormity of Washington's abandonment of a reasonably faithful and consistent ally.
(Excerpt) Read more at atimes.com ...
>>Good thing conservatives have all the guns.<<
It is interesting just how many times I’ve consciously reminded myself of that over the last two or three years.
The fuse has been lit. It will almost be fun to watch the economic implosion that will be Egypt.
Oh man.
Thanks for posting.
>>Who says? This is small stuff. The US gets along fine with very high levels of male genital mutilation.<<
There are actually sound medical reasons for circumcision, claims of Dr Dean Edell notwithstanding. The same is not true of female genital mutilation.
Someone there will hate us no matter what we do.
This whole thing reminds me of the end of Finding Nemo. The fish’s escape plan has worked perfectly. They are in little bags of water. Check! They rolled out the window onto the sidewalk. Check! They risk their lives rolling across the street, but make it. Check! They roll off the edge into the Ocean. Check!
And now they are in little bags of water floating in the ocean. Anybody got a razor blade? If not, they are in deep doo-doo.
>>They hate us because we have supported the Mubarak government for 30+ years.<<
They hate us because we are not Muslim - and we have a much higher standard of living than them. They will hate us for a long time, if the Lord waits.
We will of course. O will be sure to finance their dinners from our pockets.
Thank you, I was wondering if he was a foreskin worshipper.
I know I’ve pinged y’all a lot today- but this is really important- bookmark it if you haven’t time now- but definitely read the entire piece at the link.
If you want off this high-volume list- just freepmail me!
LOL!
Thanks,...keep me on there....or put me on.
They should just start printing their own money and cut out the middleman.
Thanks for the post. The most sane read I’ve seen on the current situation. It will not matter whether Obama is pure evil or dumber than a mushroom. History will seal his fate as satan’s agent of change.
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And if reserve-rich China, usually self-sufficient, goes into the world market to buy millions of tons of wheat, the price of wheat can rise to an arbitrarily high level.
There is a root cause to the Egyptian uprising, as I wrote last week (Food and failed Arab states,February 2), and it is not Israel, but China: prosperity in Asia creates inelastic demand for grain, such that a minor supply disruption such as the 2010 droughts in Argentina and Russia causes huge price increases. American economist Larry Kudlow observes as well that ethanol subsidies artificially inflate grain demand as well, contributing to the present price spike.
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My comments
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American economist Larry Kudlow observes as well that ethanol subsidies artificially inflate grain demand as well, contributing to the present price spike.I want to argue with that claim....
Ethanol does NOT use wheat ....
The areas that can grow wheat and corn ( which is used) generally will grow soybeans or corn...
Winter wheat country is predominately not irrigated...and not good for either corn or beans.
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Wonder how the winter wheat crop is looking back home.
Spengler is a treasure.
Love Spengler.
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