Friday, January 28, 2011

Egypt

The Egyptians are protesting due to food inflation and raw material cost inflation. Yes, this comes back to the FED printing money and devaluing the currency, boosting all commodities. The Egyptians are not taking it (like the Tunisians earlier this month), and the food riots of 2008 and back and far stronger. The government has shut down the Internet (as has Syria) and rolled out the tanks. Let's hope that if the pro-democracy protests do overturn the dictatorship, that it creates a representative government like in Iraq and is not hijacked by the Islamic forces similar to what happened in Iran in 1979. My prayers will be with them.

Somehow my gut says Obama and the administration will back the wrong horse.

UPDATE: I realize it sounds petty to blame the FED but follow me through here. The FED prints money and holds interest rates low. This pumps money into the big banks hands and also funds the federal deficit makign the dollar worth less than in 2009. The big banks then pile money into asset classes, including stocks, bonds and even commodities. This happened in 2008 which caused $147 Oil. It's a crack up boom made by cheap money. This makes food pricey. Poor countries get squeezed much harder. Hungry people get angry. This is probably just the beginning as the FED has no intention of raising rates anytime soon despite all the "progress" and "recovery" talk by the POTUS.

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