Egypt Rising...

(Picture Source: Reuters)

At this moment in time, North Africa's most storied civilization has become unhinged at its core. The plight of the Egyptian people is a scenario that is not unfamiliar to history; from the days of Alexander to the modern era of Zuckerberg, an oppressed society, no matter how overt or insidious the oppression will bite the hand that feeds it. The question that must be asked of ourselves now is...why the Egyptian people waited so long to enact change of revolutionary proportions? Perhaps we as bystanders underestimate the time it takes for seeds of rebellion to sprout in to something tangible and organized? I believe that this may, in fact, be true.

We as Americans are no stranger to resistance, albeit, armed resistance. Just under 250 years ago our founding fathers, who were marked as enemies of the Crown declared themselves independent of an oppressive colonialist power. What the World is witnessing in Egypt is not unlike what early Americans did in the 18th Century and what the French citizens committed in the early half of the 19th Century. To offer a second answer to the question I posed earlier; there is only one other OBVIOUS response...THE INTERNET. The intricate web of communication that has been weaved across our planet has done humanity a tremendous service. Never until the last 10 to 15 years has mankind served as it's own watchdog so effectively. One could say that it has only been within the last 5 years that we have truly been "connected."

The advent of the smartphone and revolutionary applications like Facebook and Twitter has fueled the fires of domestic insurgency across the globe. I fear that situations like Iran, a more recent Tunisia, and an ongoing Egypt will spill over in to traditionally less stable African and Middle Eastern states. However, along with that fear is a sense of happiness that stems from this progressive metamorphosis. A happiness rooted in the idea that democracy and a government representative of the people will always prevail.

Now, with all of the above said I truly believe that America, arguably the only remaining superpower has a mandate of responsibility whilst on the World stage. Opponents of this idea will say that America must take care of its own before she embarks on a mission to broker global peace. I say nay to this notion and believe that with power comes great responsibility. Despite the fact that the situation in Egypt has not boiled over in to a full-fledged armed rebellion like what occurred during the American Revolution, the French at that time came to the aid of Americans. This noble act must be replicated today! Benjamin Franklin must be replaced with Mohamed El-Baradei and weapons must be replaced with patient democracy...

Finally, with respect for one of history's greatest African civilizations, I will part with a few cherished words from antiquity: "Out of the ashes, rose the Phoenix..."

"Globe-trotting" With the Boys of Berkshire...

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North Korean Straw Breaks Southern Camel's Back!!!

Ladies and Gentlemen...North Korea has just launched a missile offensive on our South Korean comrades, backchannel sources say 60 to 70 homes are burning. Standby...The Southern Dragon is stirring.........................

A Leading Indicator?

"Our English Cousins"

Above: Student activist rioters break into the foyer of the Conservative Party headquarters building during a protest in central London November 10, 2010.

Takeaway: The people's anger swells in central London. What's next? Washington, D.C. ??? If our English cousins are capable of such actions, then you can bet that such events could easily take place on American soil. Hmm...I'm taking notes for now.

AS Exclusive!!! 1st Draft of A Letter Sent via FedEx to 1600 Pennsylvania Avenue...The White House

The Best Offense Is A Good Defense

I said I'd write on some solutions today, but I have chosen to actually write a short post in regards to President Obama's piece in the NYT. I think he wrote this article keeping in mind that none of these ideas are far enough evolved to be implemented, but it's a start. I will say, though, that the best solution would be to shut the media up and put aside politics, and only then will you realize what does and doesn't work economically. That'll be the day.

President Obama wrote an article for the Op-Ed of the New York Times this weekend; it's just him cleaning up in the shower after the elections, sure. The article is about how growing our exports will lead us to economic stability. The President names a few markets that we would want to grow in, including places like South Korea.

What are we exporting that they want at this point, though? The President never points that out, he just names some markets and says exporting to them would be good. Yes, getting an amount of money from them that is worth less to us than what we receive, would be great. Unfortunately a place like South Korea now has their own cars, they have their own food, and Boeing and Cessna don't really have a whole ton to offer right now amidst delays and union strikes. Luckily the President does mention that he is interested in working with the countries that don't have strong trade channels for trade agreements worth billions.

China wants our cars, GM is HUGE in China right now. China wants our food, we have a ton of it, and they have a ton of people. China somewhat wants our manufactured goods, but they can make it themselves cheaper. General Motors sells two times more cars in China than they do in the United States right now. The President doesn't name China as a target market, though. Oh well, politics are fun!

The article also mentions expanding our trade efforts in the Trans-Pacific Partnership(s). This is a great idea because the entire purpose of the strategy is to get rid of 90% of tariffs, therefore opening up more capital for trade. The countries within the pact should also consider expanding to allow other countries in. Not all of the current members such as Brunei are huge trade markets for us, but countries like New Zealand and Australia may have a bit more to offer as far as straight-trade goes considering labor is about the same costs.

I think, finally, I agree with Obama's efforts that are mentioned in this article. Exporting is the best way to get money you didn't have before. The next question is once we get that money, how do we use it to really give that boost. Tax cuts, perhaps? We shall see.

If the “crisis” led us into the Superbowl, we're still in the 1st quarter-- there's still a lot to be done.

Enjoy your Sunday evening,
-Colin

References and Articles:
Exporting Our Way to Stability / President Barack Obama (New York Times) http://www.nytimes.com/2010/11/06/opinion/06obama.html?_r=1
Trans-Pacific Strategic Partnership (PDF)
http://www.mfat.govt.nz/downloads/trade-agreement/transpacific/main-agreement.pdf

The Light at the End of the Tunnel? The Shining.

Stephen King himself couldn't make it more horrifying. It's coming. It's going to get you. There is nothing you can do.

Forget keeping or getting rid of the Bush tax-cuts. This is the “cruelest” tax. It is inflation.

This past week, Ben Bernanke ('Head of the Fed' if you will) moved forward with a decision to drop another $600b into the bond market. That is a total of $1.6t in 52-weeks. This movement is known as “Quantitative Easing II” or “QEII”. The first stuffing, QEI, was the first stimulus package we saw about a year ago.

The markets had a party on Thursday over the Fed's monetary injection, and it was all hot air.

Wall Street can be as happy as they want, but it's going to hurt them in the long run (don't worry, they know about it this time). As inflation creeps in we are going to see our savings accounts and paychecks eaten away. Ask anyone alive during the Weimar Republic and they will tell you about how they made 1,000,000,000 Mark in a day, but it did them little good because a loaf of bread costs 500,000. Good thing we have plastic now because back then it took a barrel-full of bank notes to get that loaf. In a short span of two years the Mark went from under 100 Mark to the USD, to about 4 trillion Mark to the USD.

I'm not say that will happen here, it won't, the Weimar Republic is an extreme example of hyperinflation after London demanded their loans of gold be paid back. We do, however, have to be worried about our overall value(s).

'Hey Colin, you said that it will hurt Wall Street. How?'

I'll do a simple map for this:

Your dollar value lessens heavily >

You essentially have less money (although the amount hasn't changed) >

You have less to spend at Macy's (because sweaters are more expensive) >

M (NYSE) drops because of it

We will easily see this across the board, if something isn't done.

'You gave us an example in history, but what's happening here? What can be done?'

Don't get me wrong, a little inflation in our predicament can be a good thing. It's a matter of control. I'm concocting ideas still, have been for weeks, will polish them and write on this tomorrow.

'Why is this article on only inflation, isn't deflation a risk too?'

Absolutely. Will write on deflation next week. I've heard this week that we could be seeing up to 25% deflation from where we are now.

This is my first post, I hope you enjoyed it and got a snippet of what I wanted to put up. Any questions? Go ahead and ask. If I can't get you an efficient and effective answer, my colleague Kyle will.

Until then, watch some Charlie Rose and take care,

-Colin

References and Articles:

Fed's Bond Purchases, Deflation - http://www.realclearmarkets.com/articles/2010/11/04/bernanke_is_taking_a_risk_with_qeii_98743.html

Weimar Republic (and statistics) - http://www.pbs.org/wgbh/commandingheights/shared/minitext/ess_germanhyperinflation.html