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| Israel-Palestine-Jordan |
| Caution: Storm Approaching |
| 2011-07-16 |
| It was seven months ago that Mohammed Bouazizi, a vegetable peddler in Tunisia set himself and the Arab world on fire. The 26-year-old staged his suicidal protest on the steps of the local city hall after a municipal inspector took away his unlicensed vegetable cart thus denying him the ability to feed his family of eight. Most depictions of the Arab revolutions that followed his act have cast them as struggles for freedom and good government. These depictions miss the main cause of these political upheavals. No doubt millions of Arabs are upset about the freedom deficit in Arab lands. But the fact is that economics has played a decisive role in all of them. ...Most of the news coming out about Egypt today emanates from Cairo's Tahrir Square. There the protesters continue to demand ousted president Hosni Mubarak's head on a platter alongside the skulls of his sons, business associates, advisors and everyone else who prospered under his rule. While the supposedly liberal democratic protesters' swift descent into bloodlust is no doubt worth noting, the main reason these protesters continue to gain so much international attention is because they are easy to find. A reporter looking for a story's failsafe option is to mosey on over to the square and put a microphone into the crowd. But while easily accesible, the action at Tahrir Square is not Egypt's most important story. The most important, strategically consequential story is that Egypt is rapidly going broke. By the end of the year, the military dictatorship will likely not only default on Egypt's loans. Field Marshal Tantawi and his deputies will almost certainly be unable to feed the Egyptian people. ...EGYPT IS far from alone. Take Syria. There too, capital is fleeing the country as the government rushes to quell the mass anti-regime protests. ...In response to the mass protests threatening his regime, Assad has effectively ended his experiment with the free market. He fired his government minister in charge of the economic reforms and put all the projects on hold. Instead, according to a report this week in Syria Today, the government has steeply increased public sector wages and offered 100,000 temporary workers full-time contracts. The Syrian government also announced a 25% cut in the price of diesel fuel at a cost for the government of $527 million per year. Boasting foreign currency reserves of $18bn, the Syrian regime announced it would be using these reserves to pay for the increased governmental outlays. But as Reuters reported, the government has been forced to spend $70-80 million a week to buck up the local currency. So between protecting the Syrian pound and paying for political loyalty, the Assad regime is quickly drying up Syria's treasury. ...POOR ARAB nations like Egypt and Syria are far from the only ones facing economic disaster. The $3bn loan the IMF offered Egypt may be among the last loans of that magnitude the IMF is able to offer because quite simply, European loaners are themselves staring into the economic abyss. Greece's debt crisis is not a local problem. It now appears increasingly likely that the EU is going to have to accept Greece defaulting on at least part of its debt. And the ramifications of Greek default on the European and US banking systems are largely unknowable. This is the case because as Megan McArdle at The Atlantic wrote this week, the amount of Greek debt held by European and US banks is difficult to assess. Worse still, the banking crisis will only intensify in the wake of a Greek default. Debt pressure on Italy, Ireland, Spain and Portugal which are all also on the brink of defaulting on their debts will grow. Italy is Europe's fourth largest economy. Its debt is about the size of Germany's debt. If Italy goes into default, the implications for the European and US banking systems - and their economies generally -- will be devastating. The current debt-ceiling negotiations between US President Barack Obama and the Republican Congressional leadership have made it apparent that Obama is ideologically committed to increasing government spending and taxes in the face of a weak economy. If Obama is reelected next year, the dire implications of four more years of his economic policies for the US and global economies cannot be overstated. DUE TO the economic policies implemented by Prime Minister Binyamin Netanyahu since his first tenure as prime minister in 1996, in the face of this economic disaster, Israel is likely to find itself in the unlikely position of standing along China and India as among the only stable, growing economies in the world. Israel's banking sector is largely unexposed to European debt. Israel's gross external debt is 44 percent of GDP. This compares well not only to European debt levels of well over 100 percent of GDP but to the US debt level which stands at 98 percent of GDP. ...Aside from remaining economically responsible, as Israel approaches the coming storms it is important for it to act with utmost caution politically. It must adopt policies that provide it with the most maneuver room and the greatest deterrent force. First and foremost, this means that it is imperative that Israel not commit itself to any agreements with any Arab regime. ...Beyond that, with the rising double specter of Egyptian economic collapse and the rise of the Muslim Brotherhood to power, Israel must prepare for the prospect of war with Egypt. ...with the US's weak economy, Obama's Muslim Brotherhood friendly foreign policy, and Europe's history of responding to economic hardship with xenophobia, Israel's need to develop the means of militarily defending itself from a cascade of emerging threats becomes all the more apparent. The economic storms may pass by Israel. But the political tempests they unleash will reach us. To emerge safely from what is coming, Israel needs to hunker down and prepare for the worst. |
| Posted by:g(r)omgoru |
| #11 Want to know why people farm? 80% of businesses fail within 2 years. Farms is less than 5%. Farming is nearly as good as a McDonalds franchise, although the lifestyle is better. |
| Posted by: phil_b 2011-07-16 18:38 |
| #10 S, I wonder myself God bless them. I have know a few that had to take Valium. The weather is bad enough but government has messed things up bad for them. Farmers Coops still operate but they need more than that now. To quit farming is like someone has died. They don't want to give up on it. The debt sucks them in deeper and deeper. |
| Posted by: Dale 2011-07-16 17:30 |
| #9 For the life of me I can't figure out why the farmers keep planting year after year, losing money, year after year, hard times always. Drought, storms, freeze, heat, pests and plant diseases. I guess it's a holy calling, maybe a modern version of the flagelates. |
| Posted by: S 2011-07-16 16:32 |
| #8 I don't know about you People, but I've been waiting for Muhammad to meet Malthus for more than 20 years. |
| Posted by: g(r)omgoru 2011-07-16 14:47 |
| #7 There was an AyePee article entitled "Betting the Farm on it" in our local newspaper business section this a.m. The gist of the article was that rich investors who made their money elsewhere were buying up farm land because they are betting that food will only get more expensive around the world. I also read that George Soros is buying up flooded Missouri farm land which people want to get out from under. |
| Posted by: JohnQC 2011-07-16 14:31 |
| #6 Ranchers are taking it on the chin out thisaways (nw Texas, west OK, west KS, east CO). Gonna be worse if the EPA is allowed to complete its publicized agenda. Gonna be worse if the gov maxes out yet another credit card as the dollar plummits. Gonna wish for the days of the $5 burger; I'm not a doom and gloom guy, I am a regional realist. Seems the only people growing anything are grandfathered irrigationists and they are growing corn/silage. These farmers, especially the family propriatorships, will qualify as the rich people to get more taxes. |
| Posted by: swksvolFF 2011-07-16 14:03 |
| #5 "Sounds draconian, I know, and it is. No apologies. We owe no one anything". Well yes, they hate us don't they. I know of one ethanol plant in Pennsylvania that is shut down because they can't get corn. Another ethanol plant being built in Pennsylvania has stopped construction, why I don't know."We owe no one anything" is the major flaw of China. People within China want to help others but the government and major corruption will limit them. They will compete with us and anyone else for their own needs. Total indifference. We ourselves are having one disaster after another in crops and animals. Even Mexico has had crop failures and Canada isn't much better. Farmers are being wiped out now. Dairy farmers are going bankrupt in West Virgina at this time. Farmers have to barrow money to plant and they can't recover because they aren't getting a return to continue. Most farmers work another job to keep the farm going. Commercial farms heavily use manufactured fertilizer. They have done that for years. Now the soil is poor and the results will diminish. The soil has been poor since the thirties. We have a dust bowl now in several states. So yes to small farms in every place possible as soon as possible. Small banks, small industry, no more too big to fail giants. |
| Posted by: Dale 2011-07-16 11:47 |
| #4 Moose, may I modify your plan slightly. Do all of what you said except for shipping it. Store the grain. Wait for the world to melt down. Ship grain to places that come down on the side of liberty and democracy (or at least avoid their current barbarism). Let the rest starve until they too see the light. They will. Sounds draconian, I know, and it is. No apologies. We owe no one anything. |
| Posted by: Whiskey Mike 2011-07-16 10:44 |
| #3 The US could exert enormous influence into much of the world right now, if it stopped ethanol production, temporarily subsidized fertilizer production and transport, and stopped holding back farm production. Then exported grain like there was no tomorrow. But it shouldn't do this. The world and all these nations need to be seriously shaken up. Their tyrannical and stupid models of operation need to collapse, and will, if left to their own devices. |
| Posted by: Anonymoose 2011-07-16 10:35 |
| #2 This video may be of a time lost. The youth, the country look great. Like Lebanon lost in hate. Netanyahu is a man of the times for the right time. |
| Posted by: Dale 2011-07-16 10:18 |
| #1 Banking systems are overextended. Now we are tied to them more than ever. They have pushed this one world order for so long they think this experiment will work. The problems of Egypt have been know for many months. It is a sad time for that area of the world and very dangerous. |
| Posted by: Dale 2011-07-16 10:07 |