John Jay,

I wish I could share your enthusiasm but the prospect of Jordan, Egypt and Yemen all falling would be an unmitigated disaster in the Middle East and could bring on the possibility of populist extremist leaders taking the reins of power in those countries.

Nobody knows what kind of outcomes might then erupt. Better the devils we know than those we don’t sometimes. Stability of course is always preferable.

We can all see now that reform is coming though and there does not appear to be weakness showing on the parts of the demonstrators nor a stomach for this kind of fight on the part of the military. I see it as very unlikely that the Mubarak regime will survive this uprising.

Public sentiment is strongly biased towards regime change and there are demands for open, fair and free elections. Lets all hope that when change does arrive it is beneficial to the interests and needs of the majority of Egyptians, not just those who seek to hold power.

I do worry though that the very stability of the Mid-East region may be at stake. Again. The current Egyptian revolt is not a surprise though and in fact has been anticipated for quite some time by many who closely follow politics in Egypt and North Africa.

This is no Black Swan event. Rather it is an outcome of years of social repression, nepotism and political favoritism.

Trouble has been nipping at the heels of this otherwise most benign of tourist destinations for many years now. Below the surface though there has been a growing threat and a latent challenge to the Mubarak government. There is hatred even in some quarters.

The sources of the discontent range all the way from a well established corruption of both the judiciary and legal professions to an abscence of established property law that could be fairly relied upon by all citizens.

Persistent poverty and anger amongst a huge part of the countries growing population who feel estranged and disenfranchised within their own country is endemic. While many are apathetic and have long been resigned to life under the status quo for most of the past three decades, many others have been waiting for a moment of opportunity to take a stand against what they believe is patent unfairness and inequality.

There has been disenchantment and distrust of both the policing forces and an inept and cowed public service that did not, or could not, defend equality of citizen rights against state excesses and corrupt practices.

Much of this is self evident to anyone who attempts to compare the growth and relative wealth effects that are taking place in most parts of Asia and then superimpose them on countries of Africa.

There are very different dynamics at work though and capital does not willingly flow to sources of risk. The absence of well established banking and electronic and transactional infrastructure are central to the weaknesses of many African countries for one.

Ease of access to credit, debit and investment funds represent barriers and impediments despite the best efforts of the business class who see themselves every bit as competent and capable as competitors in Asia. Attracting foreign investment is a chore for Egyptians in many cases while money flows easily by the hundreds of billions into China and her neighbors in the region.

Do not think for a second that the citizens of Egypt have not looked on in dismay as other countries nearby have gone through a renaissance of growth and development leading to an improved standard of living while Egyptians have steadily fallen behind (at least in relative terms).

Do not think that they have not blamed their own government for a failure to capture a fair share of the markets and opportunities that the West has handed out so liberally to those “other” countries that play ball by the rules that everyone else follows.

There is plenty of blame to go around and it is clear to the citizenry there that the country has been held back by a political structure that is not open, transparent or flexible.

This needs to change for Egypt to become an option to the world as more than just a watering hole for thirsty travelers and a warm vacation spot for European tourists. Egyptians want good jobs and opportunities too; where their entrepenuerialism is rewarded, not co-opted by the state.

It is clear that investors have not been anamoured of the investment opportunities presented by the current government in power. Stability is always a concern where one man and his array of captains dictate the policy and rules for nation on whim. The very thin veneer and pretense of responsible electoral process is all the more discouraging to outsiders.

Given that backdrop, all that this African tinder box really needed to set it afire was a light. The fuel has been in place for many years already.

And that fire was lit when commodity prices began to rapidly spiral higher leaving many in Egypt at wits end as their meager wages were eroded by spiking food, utility and transportation costs.

With incomes ranging from little more than two or three dollars daily for more than half the population, the prospect of vegetables, grains and other staples almost doubling overnight was the flashpoint at the end of a long litany of complaints Egyptians have harbored against there governing party for many years now.

It (rising food prices) are the so-called straw that is now breaking the camels back. Indeed, we warned investors of a coming storm of discord that was anticipated to arise there.

As recently as December 14th we discussed the advent of food price shocks on the Third world and put Egypt and Ethiopia at the top of our list of major African nations at risk. The events there have materialized even sooner than might originally have been anticipated.

See: http://www.rickackerman.com/2010/12/a-world-in-upheaval/

Meanwhile, expect the troubles there to worsen if Mr Mubarak cannot see his way to strike an accord with a very unhappy and emboldened populace.

Although it seems a low probability he can continue in power over the next year we will not discount attempts to fracture the opposition through policies that mute the loudest opposition while placating those who favor peace to even passive resistance.

It will not work though. Not this time around.

I don’t know if should chime in on the topic of Egypt and the Middle East in general, but against my better judgement…

This is all, imv, the cogs of the MIC (military-industrial complex) doing what they do best, which is to grind away at the stability of cetain nations in order to stimulate reaction from the world police force at some point.

Aside from causing more “urgently needed” debt for the system, the building of instability also keeps the Muslims, as Cam pointed out, out of the thick of things in terms of growth and development. I’m no professor of Sharia law, but I’ve read enough of it to know that certain parts of it put it odds with the modern Western financial system. Interest, for example, is forbidden, as it is usury.

Now, suppose, just suppose, there was no resistence to allowing more money to funnel into Muslim/Middle Eastern countries. Doubtlessly, investment would, in order to avoid things like interest (much the same way money goes/went to Switzerland in order to avoid taxation; or investment going into cheaper labor in China, etc).

It is not hard to see why the system would have very great interest in working to both oppress then eventually destabilize these countries. Unlike the avoidance of taxation and things like cheap labor, NO (not just zero) interest allows for a domiance and, quite possibly, an obliteration of the whole system. It is therefore a threat of the highest order (which is also akin to the power to retire debt ie hard money).

And, those same extremist leaders would find themselves in power as well as immensly rich.

The western financial system has every reason to fear the rise of Islamic rule. Not because it is right, though.
Rather, because it is what it would be, as it was what it was historically. Too, the only thing that can compete with it and win is a hard money standard fully in the hands of the every individual and thus the public.

All of that said, I neither cheer for nor hope against the people of Egypt. I don’t know what it is they really want, but I suspect what the extremists promise (and would deliver) sounds a world better to them than what they’ve had to continue putting up with. Hunger drives people to support such things, and they are probably not concerned with if they are even aware of what genuine Liberty is. That being the case, I can’t in good conscious say that I hope Egyptians get what they want. While their same enemy is also the enemy of all, so too is what they would raise in place of it, even if only because they do not know any better.

ie, Unless the very root of liberty is discovered and implemented by at least one nation in the world, this is going to be a great disaster no matter what.