Tuesday, February 22, 2011

Libya The Next Domino To Fall


I asked rhetorically a few weeks ago who was the next dictatorship to topple in the Middle East? Yet, I didn't actually think it would come this quickly, but Libya is now on the verge of a revolution.

The pace of things is interesting to see from a distance. It's inspiring for me to see the people, the military, and all the other actors in the revolution rising up to overthrow a dictatorship. Reports have Gadhafi ordering his air force to fire on the protesters and threats from Gadhafi's son that civil war and imperialism will occur if their power is taken.

Aren't they in a way already part of the great American imperialism that allows the Gadhafi's to exist as long as they play by the American dictated rules? Such as, "you agree to ship enough oil and natural gas to us and we'll agree to allow your dictatorship and leave you alone for a while until our needs change."

It's probably just a matter of days before the Gadhafi's are flown out in the middle of the night with some valuable possessions and all the log in and passwords to their Swiss and Cayman Island bank accounts.

Then we'll have to see who's next on the list. Very interesting times in the world.

Wednesday, February 2, 2011

Egypt, Tunisia - Who's Next?

This is getting interesting seeing the protests and revolts amongst the US's puppet regimes in the Middle East. Young people are protesting over high unemployment (20%), low wages, rising food and commodity prices. Democracy too. But mainly economic suffering.

Remember the concept of the "carry trade" that was going on in 2009 and 2010, where a bank borrowed from The Fed at 0.25% and purchased Treasuries, yielding 3.25%? Risk-free earnings. Well, that's still going on.

However, it looks like the same thing is happening to food here in 2011, similar to oil in 2008, where prices shot up to $140/bl then plunged to $45/bl within months.

Here's January's food gains, according to Tyler Durden at Zero Hedge:
"Corn spot up 7.76%, wheat up 5.63%, Rice up 10.08%, Hogs up 10.16%, Sugar up 5.64%, Orange Juice up 3.33%, and cotton.... up 17.08%. That's in one month!" Throw in oil now back over $100/bl. Ugh....

It's just one big momentum trade on the shoulders of 0% interest rates for the banking industry.

The free money needs to go somewhere, so it's going everywhere (stocks, bonds, commodities). Not into business or consumer loans (why risk a loss when you have a supermarket filled with guaranteed gains). Money is not going into housing - that market segment was exploited from 2002 to 2007 (and we know how that ended up) after dangerously low Fed interest rate cuts following 9/11 and the dot.com crash of 2001.

I'm thinking we need a return of Teddy & Franklin Roosevelt - A Trust Buster and a New Dealer. Break up the big banks that had to be bailed out and who are making record profits after they were all insolvent just three years ago. Split each bank into several new companies, just like Standard Oil & US Steel Trust of TR's day. Auction off the bad debts (mortgages) to new investors. It may take the banks another 80-90 years to re-merge like all the oil companies did during the 20th Century.

Re-establishing the financial regulations and safeguards that came about during FDR's day in response to the Stock Market Crash, like Glass Steagall, should be a must for lawmakers.
Implementing programs like the CCC & WPA to put people back to work, rather than collecting 99 weeks of unemployment, are also needed at this time. Change the tax laws to make off-shoring of jobs cost prohibitive while providing tax incentives to keep the jobs here in the United States. Americans have been humbled during the recession. Those who've suffered joblessness and foreclosures would be happy to go back to receiving a steady pay check building something tangible that contributes to the betterment of society.

This current game of the financial cartel benefiting from unchecked speculation and political influence while the rest of the population faces 60% annual increase of staples like cotton, corn, and wheat is ridiculous. This isn't what the majority of the citizenry signed up for.

Just a matter of time before the protests break out in the United States for the same reasons those in the Middle East are revolting.

Sunday, January 30, 2011

Comments From Egypt: Saudi King Abdullah


It's a good thing the American Revolutionaries defeated the British 235 years ago and established the United States of America. We are very fortunate to have all of these freedoms protected by law, including Freedom of Speech (probably the one I enjoy the most).

This afternoon, I read a comment from Saudi King Abdullah, who referred to the protestors as intruders who were “tampering with Egypt’s security and stability … in the name of freedom of expression.”

Well isn't that a novel concept? Citizens speaking up for the right to freedom of expression and the opportunity to have a democracy? It appears the Egyptian people are tired of being governed by a dictatorship.

Is there some kind of double standard in the political world, since we, the United States, are a close ally with Saudi Arabia? America embraces freedom of speech (just look at all the wildly successful crap on American TV like "Keeping Up With the Kardashians" or "Jersey Shore") and even invaded Iraq to bring democracy, and its ensuing "freedom of speech" to the Iraqi people. King Abdullah supported the American invasion, as he seems to support most American global ambitions (and buys up shares of our insolvent banks to boot).

If he supports American's bringing freedom of speech to Iraq, why wouldn't he support freedom of expression in Egypt? Why are the Egyptians some kind of nuisance while the Iraqi's should be given democracy?

What will US Foreign Policy stand for this time? Will the US government support the calls from the Egyptian people for a complete regime change, starting at the top? That would be considered democratic, right? Would King Abdullah, the American petro-lackey, toe the party line and support the changes?

We'll see.

Thankfully, I live here in North America, where this idea called Democracy has been working out the kinks for 235 years, free from a King like Abdullah, who doesn't want his people (or the Egyptians) to have access to basic freedoms that all humans inherently seek, like freedom of expression.