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The World on Edge

Posted Sunday, January 30, 2011, at 7:16 AM

In the past couple of months, there have been riots in Chile, Albania, Greece, Italy, France, Spain, Portugal, England, Ivory Coast, Morocco, Libya, Algeria, Tunisia, Egypt, Jordan, and Yemen. What do all of these riots have in common? They all have governments with socialist economic systems and rising food and energy prices.

Who is at fault? It is an unfortunate byproduct of American and European economic policies. It appears to be similar to the riots and revolutions of the late 1970s and early 1980s. Here is why.

As those who follow investment markets, particularly commodities, know well that the U.S. and the European Union (E.U.) have been inflating their currencies like there is no tomorrow. Due to terrible financial mismanagement, both by the citizens individually as well as their governments, the financial systems of the western world teetered on the brink of collapse three years ago and continue to hover at the edge today. The answer by adopted by America and the E.U. was to print trillions more in currency.

As the dollar and the euro are inflated, the prices of commodities rise. This is felt worldwide in energy prices. As electricity, natural gas, and petroleum prices rise, the price of all goods rise.

Food production is highly energy intensive. However, food has additional pressures. Grain is an international commodity traded like oil on the international market denominated in dollars. As the dollar inflates, the price of food on the international exchanges rise further. Add to that, like in the late 70s, there is a huge push to put grain and beans in your fuel tank. You can't eat petroleum, but livestock and people eat corn and beans. Moreover, as the price of corn and beans goes up to meet fuel demand, farmers plant more of them and less wheat making the price of bread rise. In poor places, bread is literally the staff of life.

In places where the people have barely enough income to provide for their basic needs, these price rises literally cut into the individual food budget. Countries with socialist economic systems are less adaptable than free market systems amplifying the problems.

If you want to make a population ready to fight, make them hungry.

At the moment, the most covered riots are in Egypt. Egypt is the most powerful Arab country (though not the wealthiest) in the Middle East. Moreover, Egypt controls the Suez Canal. The Suez Canal is how oil gets from the Middle East to Europe and West Africa. If the canal were closed, shipping would have to go around the Cape of Good Hope at the Southern tip of Africa and transit some of the most stormy and dangerous waters on earth. If Middle Eastern oil is choked, supply will tighten severely and our suppliers, Canada, Mexico, Venezuela, etc. will hike prices dramatically.

As Egypt's "President" Mubarak is a dictator, news reporters are hopeful that toppling his government will result in a democratic government. However, for democracy to succeed, there must be an educated voting public. The Iraqi people are among the most educated in the Middle East. Unfortunately, the Egyptian people rank toward the bottom. This increases the likelihood of a theocratic government taking over, even if there is a democratic government that emerges first. (In 1917 Russia, the Czar was replaced with a brief democracy that was in turn replaced by the communists.)

The upheaval in the 70s and 80s resulted in governments friendly to us falling and being replaced by hostile ones. Will that happen again? Time will tell. Egypt is friendly with us and at peace with Israel. It wouldn't be the first time that history took a repeat.

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Each country however is a little different....I know a little more about Tunisia and Egypt as been following a relative of my husband's writings from over there....Tunisia is pretty far ahead with respect to equality for women with almost 1/3 of the country's judge's being female. Can only hope that other human rights issues are in line as well. Now if they only will accept Rachid Ghannouchi, opposition leader who has been living in England now that he is back in the country. A temporary fix maybe but may prevent chaos until new government is set up. Hopefully getting back some of the funds former dictator left with.

Egypt has Mohamed Elbaradei, Nobel Peace prize winner, back in the "action". Hopefully they will now turn from destroying their own "wealth" such as museums etc because tourism is one of their money makers. Egypt has their poor but they also have a professional class. Don't paint all of its population with one brush.

Both of these countries have a better chance of getting it right because the revolution came from within like our civil rights did for Blacks in this country...IF you remember Watts riots, things were not pretty there either but it got people's attention. IF human rights remains the focal point of this "Renaissance" they are calling it, good will come out of it.

I'm not condoning destruction, just saying it does get people's attention. I pray not only for David and his family in Cairo but for all those in areas of unrest as even if I don't personally know them, their welfare impacts the entire world and ultimately me.

What can this teach us??

No longer can anyone have isolationist attitude and really believe that what one country does on the other side of the world doesn't impact our lives here...and what we do here doesn't effect those in other parts of the world.

Some times I hear people talking about those from other parts of our own country as being just not quite as good as they are locally...When will some realize that respect for ALL the world's citizens is important and we must make every decision with the welfare of others in mind? Including those in a Palestine that some still don't officially recognize. The allies after WWII under auspice of Churchill "gave" its colony "Israel" to European Jews when it wasn't his to give. It belonged to all of the people already living there. Since then we have only recognized

the Jewish rights over there which is one of the biggest reasons we have poor relations with the Arab world. If the former colony had been given back to the people as Hong Kong was, things would have been a lot different.

Many guilt trips and accusals of antisemitism are aimed at anyone who speaks out for the Arabs in Israel/Palestime but the fact is that the "Jewish" rule is not one that is based on faith but on cultural and familial lines. IT is no more a Jewish government than ours is a Christian one or our laws would be based upon the New Testament and ten commandments which clearly it isn't....We are more eye for an eye than we are turn the other cheek....Israel is all for human rights of those decendents of Jews than it is about practicing the Jewish faith...So in actuality their government is antisemetic as it has tried to kill the faith in some ways....

-- Posted by Jenny Moore on Mon, Jan 31, 2011, at 8:00 AM

this has nothing to do with the above article, been wondering how your wife is doing post surgery ?

-- Posted by Edward Kane on Wed, Feb 9, 2011, at 6:03 PM

We should not forget that we ourselves rioted, fought a war and sacrificed many lives for our freedoms. Hunger alone is not enough to spark riots or else the SS could have never kept the Jewish prisoners under control. There is a strong hunger for democracy right now fueled in a large part by social networking.

-- Posted by alwaysopenminded on Thu, Feb 10, 2011, at 2:38 PM

Dear Mr. Kane,

Thank you for your question. Yvette could be the poster girl for bariatric success. She is frustrated that her weight loss has settled in at about two pounds per week after the initial large loss. However, according to the literature I am familiar with, one to two pounds per week is perfect for maximum health and long term success.

She is just starting to try foods with a bit of spice (mild Buffalo wings) without any negative effects. She virtually never has any cravings and has not particularly missed anything that she feared that she would.

Truth be told, I am envious. I kinda wish I had the courage to have gone for the bypass rather than the lap band. However, she had been living with diabetes for several years and I remain stubbornly healthy for a middle-aged fat guy.

Dear Alwaysopenminded,

You certainly make a valid point. Moreover, history should always be considered in predictions for the future. That said, the American Revolution is virtually unique in the transition from monarchy to a genuinely republican form of government with a more-or-less laissez-faire capitalist economic system.

That said, it also seems only rational to believe that the demonstrators in Egypt include many groups opposed to the present situation with many different goals in mind.

Democracies and democratic republics are difficult to maintain. In ancient times, none lasted long. In modern times, we in the Americas and Europe haven't done spectacularly well.

Whatever you think of G.W. Bush, I do agree with him that there is a natural yearning for freedom.

That said, we would be foolish to not realize, and prepare for, democracy to fail in North Africa. To steal from Scripture, in Egypt, the seeds of democracy have fallen on rocky and thorny ground indeed.

-- Posted by Charles Hear on Fri, Feb 11, 2011, at 8:08 AM

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