Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
If You Don’t Understand Bonds, You Don’t Understand Investing - 25th Aug 19
Gold's Next Move - 25th Aug 19
Fresh Water Crisis Unfolding - 25th Aug 19
Newbie Guide to Currency Pairs in Forex Trading – Review - 25th Aug 19
When A 16-Year-Old Earns $3 Million, You Know It's Not A 'Silly Fad' - 24th Aug 19
The Central Bank Time Machine - 23rd Aug 19
Stock Market August Breakdown Prediction and Analysis - 23rd Aug 19
U.S. To “Drown The World” In Oil - 23rd Aug 19
Modern Monetary Theory Could Destroy America - 23rd Aug 19
Seven Key Words That Explain "Stupidly High" Bond Market Prices - 23rd Aug 19
Is the Fed Too Late Prevent A US Housing Bear Market? - 23rd Aug 19
Manchester Airport FREE Drop Off Area Service at JetParks 1 - Video - 23rd Aug 19
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
WAYS TO SECURE YOUR FINANCIAL FUTURE - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Egypt is Just the Beginning for Gold’s Next Move

Commodities / Gold and Silver 2011 Feb 04, 2011 - 11:12 AM GMT

By: Midas_Letter

Commodities Best Financial Markets Analysis ArticleWatching CNN, its easy to be lulled into the sense that the cute little third world African country that is home to Cleopatra, mummies and pyramids is having a little revolution to get rid of a tired old tyrant. That the old goat is putting up such resistance to the national message is to be expected, and might be forgiven. Unleashing bands of paid thugs under the guise of ‘supporters’ reveals true brutality and illuminates the character of the man, Hosni Mubarak – a sociopath.


This phenomenon, originated in Tunisia, a nation of 10 million, and now raging in Egypt, of 85 million has spread to Yemen, population 25 million and Jordan, population 6 million is no mere regional political shift: this is the beginning of America’s loss of control over the region.

That the democratic process even got a foothold in the tribal and historically despotically governed middle east is due to a series of historical power plays, and not so much to a nascent and organic inclination towards the idea of democracy. When oil emerged to become the most strategic substance on earth after the second world war, the United States, armed with the economic windfall from the war machine, set about toppling governments and seeding insurrection through the offices of the C.I.A., bolstering governments that were ‘incentivized’ to protect U.S. interests, and destroying those that were not.

Back then, before the light-sped connected world, the C.I.A. could operate with impunity, given the backwards communications systems in those days, and the relative lack of education of their targets.

It is unlikely Mubarak would have lasted as long as he did without overt U.S. support, and tacit Israeli support. Egypt and Saudi Arabia have been the two moderating influences in the volatile regional mindset that inclines naturally towards the harsh brand of Islamic orthodoxy that characterizes the rest of the region. There is deep resentment against the U.S. hegemonic strategy that has determined the current Middle East order.

That resentment, now finding expression in a unified regional protest, is transforming itself into a force of self-determination, and the Muslim brotherhood and Al Qaeda are most likely to recognize and capitalize on that force.

The implications for the United States, Saudi Arabia and Israel are seismic. This brand of revolution, that starts peacefully and ends up violent, is the archetypal early stage of total regional reorganization. This could be the first stage of an elevated conflict that would see a war ignite between Saudi Arabia and the rest of the Islamic region, where the outcome would be a dramatic rise in Islamic fundamentalism, as the Saudis would be accurately portrayed as the puppet of the decadent and imperialistic West and Egypt would fall to the Muslim Brotherhood, already the largest political opposition group in Egypt.

Algeria, Syria, Morocco, and other North African countries will begin to feel incrementally emboldened, and in theory, it mightn’t be long before new strategic alliances with Russia and China tipped the balance of power towards and Islamist brand of socialism. China especially would welcome its chance to strengthen the financial dependency it already receives from the United States with a military dependency as well.

How many more active theatres of war can the U.S. afford to fight, considering its $14.3 trillion debt and feeble economy?

Obama has been upstaged by Egypt at exactly the moment when the plan was supposed to be to focus on the employment picture while shilling for the economic recovery. To find the dictatorship that has long been subsidized by successive White House administrations crumbling and sending oil and gold prices higher completely derails the script. Despite the White House and Hilary Clinton’s feckless distancing from their long time ally (urging a ‘peaceful transition to democracy’), the historic relationship and its bearing on the rise and staying power of the Mubarek regime will be amplified in the weeks to come. The outcome will be the widespread perception, both internationally and domestically, that the U.S. has been up to its old tricks and can’t be trusted.

Though the issues play as superficially unrelated in the cooperative press, they are not. It is domestic grievances that ignited North Africa, it is domestic grievances that dog the Obama administration and the U.S. Federal Reserve. While the crushing poverty that plagues Egypt is only marginally present in the United States, the widespread deterioration in the standard of living that has affected the majority of Americans since 2008 is a substantial ratio of the population.

Like the collapse of the U.S. dollar now underway, the collapse of American influence in the Middle East is underway, and both are slow, long-drawn processes slowed by intermittent attempts, in both cases, to deter the inevitable.

Right now, its an all out effort to portray the Egyptian revolution as an Egyptian problem contained within that countries borders, with only look-alike conflagrations surrounding it. Just as there is an all-out effort to downplay the profound implications of the U.S. out of control debt and once again prematurely achieved borrowing limit.

Gold is, as is its historical habit, starting to throw off the cumbersome shackles of futures market derived negative price influence, and reasserting its role as the only trustworthy barometer of both political stability and monetary integrity. Since both of those are now in advanced stages of disability, there is renewed impetus behind gold demand now that is probably stronger than at any point in its ten year bull market rise.

There are more U.S. dollars, less U.S. GDP, less security in the Middle East, less security in Iran, no security still in Afghanistan, diminishing security and stability in Pakistan.

Japanese debt has been downgraded, and U.S. debt is threatened. The jobs data and consumer spending data coming out of the United States are weak and insubstantial, and bank failures continue apace. GDP growth was negative in the U.K, there is 25% unemployment in Spain, and without China’s intervention, the debt auctions of both Portugal and Spain would have been utter failures.

Commodity prices are ratcheting upward, and the price of gasoline remains at all time highs.

If that isn’t gold price positive, I don’t know what is.

James West is the publisher of the highly influential and widely respected Midas Letter at midasletter.com. MidasLetter specializes in identifying emerging companies in gold and silver exploration at the beginning of their share price appreication curves, and regularly delivers 10 baggers (stocks that increase in value by at least a factor of 10) to his premium subscribers. Subscribe at http://www.midasletter.com/subscribe.php.

© 2011 Copyright Midas Letter - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Midas Letter Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules