Egypt is collapsing!

[American Patriot]

Yeah, but there was supposed to be an announcement (that's what I was referring to) at 10 PM on Saturday????

[vector7]

Egypt Rapidly Running Out Of Food

Submitted by Tyler Durden on 01/31/2011 07:20 -0500

Forget Egypt ATMs running out of cash. A far bigger problem for the country is starting to materialize, one which would promptly shift the revolution into overdrive: the disappearance of all staples.

CNN reports:

"While discontent, resentment and nationalism continue to fuel demonstrations, one vital staple is in short supply: food. Many families in Egypt are fast running out of staples such as bread, beans and rice and are often unable or unwilling to shop for groceries.

Everything is running out. I have three children, and I only have enough to feed them for maybe two more days. After that I do not know what we will do." school administrator Gamalat Gadalla told CNN." And while the world is merely concerned about whether the Suez canal is still open, perhaps it is time for a little food paradropping exercise, because if the 80+ million strong population realizes there is nothing to eat, we may just see the kind of Somali ship piracy in the Red Sea we have all grown to love, move just a little bit inland.

More from CNN:

The unrest has paralyzed daily life in Egypt with many grocers closing shop and spotty food shipments.

"With the curfew, there are no restaurants, food or gas. Basic goods will soon be in shortage," Sandmonkey, an Egyptian blogger said via Twitter.

Egyptian President Hosni Mubarak has ordered a curfew in Egypt to be extended from 3 p.m. to 8 a.m. on Monday, further stifling normal life in the embattled nation.

Egyptian state-run Nile TV has set up a hotline for citizens to call in and report bread shortages. There has been no other indication of what the Egyptian government is doing to address the crisis.

Unfortunately for Egyptians they seem blissfully unaware that they can't eat E-minis, which have resumed their algo driven melt up this morning as the revolutionary margin and bottom line appears to have blown out analyst expectations.

h/t Morten

[American Patriot]

Seven days into a crisis.

Almost out of food.

Well... it can't happen HERE!

(LOL!)

[BRVoice]

http://www.worldthreats.com/?p=5659


Tribes Threaten to Attack Suez Canal if Mubarak Does Not Step Down

Posted by Matthew Avitabile on January 29th, 2011
Bedouin tribesman have reportedly taken control of two towns in the Sinai Peninsula. These two towns are the closest to the Gaza Strip and right next to the border with Israel. There were reports yesterday that Bedouin tribes had besieged a police station in Suez and it appears that these riots have spread. This would effectively end the Mubarak dictatorship’s control of the region. There are no reports of the Egyptian military stepping in here.
The more disturbing news is a threat that has been made by the tribes if Mubarak does not step down. According to one report coming from Time Magazine, they are willing to attack the Suez Canal if Mubarak does not leave. The Suez Canal currently is where a third of the world’s oil and six percent of all products passes through. A seizure of the Canal could spike oil prices beyond the current $90 level, perhaps over $110. This could come to pass despite the fact that Egypt is not a major oil producer.



It has been speculated that the Egyptian army would not allow the Canal, perhaps Egypt’s most important economic element, to be attacked. However, there appears to be little to no protection and one report states that at least one ship has been attacked there. Others have reported fear of passing through due to the unrest.

And a prominent Bedouin smuggler in the Sinai peninsula told TIME that Bedouin are now in control of the two towns closest to the Gaza Strip, and that they planned to press on to attack the Suez Canal if Mubarak does not step down. He also said that police stations in the south Sinai would be attacked if Bedouin prisoners were not released.

If the Egyptian army was to attempt a defense of the Canal, they could likely succeed, even against heavily armed tribesmen. However, if the army is tied down in Alexandria and Cairo or have been ordered to stand down, then access to the Canal could be cut off as soon as tomorrow.


If there is a credible threat to the Suez Canal or actual stoppage by force, the 1956 invasion comes to mind. When Egyptian dictator Gamel Nasser nationalized the Canal, the combined forces of Britain, France, and Israel took it by force. It is possible that the United States or European powers would consider to retain control of this important waterway.


The White House or Downing Street have not commented on this breaking story. It is unknown if the Obama Administration has put in place a contingency plan in case of the seizure of the canal. The US military regularly travels through the waterway.

[American Patriot]

Jordan, Egypt, Algeria, Yemen.... even Syria to some extent. Breaking down internally.

Israel is "terrified" that Egypt will become "another Iran on our southern border"..... they are worried about the 1979 peace treaty with Egypt.

Gaza strip is in an uproar at the moment.

Men are walking across the border from Gaza into Egypt... Hamas, armed men.

[American Patriot]

People who are from Hamas are trying to shut down the gas pipe lines to Israel from Egypt and has "warned Egypt" to "prepare to war with Israel".

Oh oh.

[American Patriot]

I just heard that some people are planning to attack ports in Suez...???

[American Patriot]

Oh, missed it. Sorry Vector, thanks. you were posting while I was.

[BRVoice]

Al Jazeera reporter is being interviewed. She is saying that the concrete wall that has been put up is worrying the people as it is cutting off any way of escape from the square if something happens. It appears that the walls are put up around and behind the people and almost penning them in. That is worrisome.

[BRVoice]

http://english.aljazeera.net/news/mi...341644600.html


Egyptian financial crisis looms
Investors transferred hundreds of millions of dollars out of the country since the start of the protests a week ago.
Last Modified: 31 Jan 2011 10:42 GMT

Economists are warning that if Egypt's turmoil continues much longer, the country will not have enough currency reserves to avoid a long term financial crisis.

Currency traders said on Monday that investors have transferred hundreds of millions of dollars out of the country since the start of the protests six days ago.

Banks are still closed throughout Egypt and markets are suspended. Many fear that once they open, millions of dollars will be withdrawn additionally.

The government had $36bn in foreign reserves at the end of December, central bank figures showed, which suggest there is no immediate danger of a balance of payments crisis, however; scenes of chaos at Cairo's main airport, as both foreigners and Egyptians try to get flights out of the country, indicated outflows of money could reach damaging levels over the medium term.


'Running out of basics'

Robin Amlot, managing editor of Banker Middle East, says people are starting to "run out of the basics, which will feed into inflation".

"The banks say they are very liquid at the moment, but it's a question of not just what happens in Egypt, but also elsewhere in the region," Amlot told Al Jazeera.

"All you have to do is look at the stock markets in the rest of the Middle East and in the Gulf, and see what an impact that the turmoil in Egypt has had. It is damaging business all around the region."

Egypt has a financial war chest, "but the war chest is going to be depleted if this situation continues for several weeks rather than a few days," John Sfakianakis, chief economist at Banque Saudi Fransi, said.

"When markets begin to make bets against (the Egyptian pound), it will have a severe impact. The whole fiscal position of the Egyptian economy is going to be put to a very hard test if the violence, rioting continues for several weeks," Sfakianakis said.

Egypt also faces a dilemma over reopening its banks. It will probably need to reopen them within days to avoid serious damage to the economy, and to continue funding itself.

"People are running out of money, this is clear. We expect that when banks do reopen, there will be quite a run," said one Cairo banker.

It is also unclear whether banks will continue do to business as usual with each other during the turmoil.

Oil prices extended gains above $89 a barrel on Monday in Asia as the Egyptian protests threatened to spread unrest across the oil-rich Middle East.

Amid the instability in Egypt, jittery traders pulled money from stocks to buy oil, gold and the dollar, which are considered less risky in uncertain times.


Egypt downgraded

Moody's Investors Service has downgraded Egypt's government bond ratings to Ba2 from Ba1 on Monday and has changed the outlook to negative from stable. It also downgraded the country ceiling for foreign currency bonds and foreign currency bank deposits.

Moody's notes that Egypt suffers from deep-seated political and socio-economic challenges, including a chronic high rate of unemployment, elevated inflation and widespread poverty.

In Moody's opinion, there is a strong possibility that fiscal policy will be loosened as part of the government's efforts to contain discontent.

Meanwhile, Nissan Motor Co. has temporarily stopped production in Egypt for one week starting on Sunday following the protests in Cairo, a spokesman said.

Japan's second-biggest automaker assembles the X-Trail, Sunny and Pickup models at the knock-down factory in Giza, near the capital.

Economists also worry about how the protests will affect Egypt's Suez Canal, a crucial artery that processes 10 per cent of world trade. So far the canal has been operating as usual during the protests.

"Traffic has been running normally, with 45 to 50 ships passing through the canal per day," Ahmed al-Manakhi,a member of the Suez Canal Authority's board of directors who is also responsible for traffic, said.

"The Suez has not come under any attacks, and the canal is able to manage navigation," he said.


Source: Al Jazeera and agencies

[BRVoice]

http://twitter.com/NicRobertsonCNN

Mood on #Alexandria streets more determined than ever, now calling for #Mubarak execution not just his ouster #egypt #jan25 about 4 hours ago via web

[BRVoice]

http://www.tradearabia.com/news/OGN_192726.html


Firms stop Egypt drilling, evacuate staff
Cairo: 1 hour and 43 minutes ago

Several European energy companies have suspended drilling and evacuated some staff in Egypt due to political unrest, but they said on Monday that gas and liquefied natural gas (LNG) production had not been affected.

Britain's BP, which produces a large share of the North African country's oil and gas, and Spain's Gas Natural, operator of an LNG plant, said they were evacuating some employees but that their operations were unaffected.

Egypt is one of the world's top 10 exporters of LNG, which is gas cooled to liquid form for transport by tanker, but it consumes a lot of the gas it produces.

Norway's Statoil also evacuated some staff, and along with Britain's BG Group, suspended drilling activities, but BG-operated gas and LNG production continued as normal.

"We have decided to stop the drilling operations for the moment to be on the safe side," a Statoil spokesman said, adding that the company had let some staff leave the country as the uprising against Egyptian President Hosni Mubarak's 30-year-rule intensified.

"They left during the weekend as a precautionary measure as the situation is unstable and we don't know how it is going to develop," he said.

Protesters intensified their campaign on Monday to force Mubarak to quit as world leaders struggled to find a solution to a crisis that has torn up the Middle East political map.

BG, which produces about a third of Egypt's gas and holds a similar share of the Egypt LNG export project, has stopped drilling, but production from its West Delta Deep Marine offshore field -- a 50/50 joint venture with Malaysia's Petronas -- continued as normal.

"Drilling activities have been temporarily suspended," a BG spokesman he said.

"Gas production continues unaffected and LNG operations continue unaffected ... All our employees, contractors and their families are accounted for and safe."

A spokeswoman for Spain's Gas Natural, which operates the Damietta LNG export plant on the north coast, said it had started evacuating non-essential staff and their families. - Reuters

[vector7]

Who Lost Egypt?

Sunday, 30 Jan 2011 10:36 AM
Article Font Size

By Dick Morris

In the 1950s, the accusation "who lost China" resonated throughout American politics and led to the defeat of the Democratic Party in the presidential elections of 1952. Unless President Barack Obama reverses field and strongly opposes letting the Muslim Brotherhood take over Egypt, he will be hit with the modern equivalent of the 1952 question:

Who Lost Egypt?

The Iranian government is waiting for Egypt to fall into its lap. The Muslim Brotherhood, dominated by Iranian Islamic fundamentalism, will doubtless emerge as the winner should the government of Egypt fall. The Obama administration, in failing to throw its weight against an Islamic takeover, is guilty of the same mistake that led former President Jimmy Carter to fail to support the shah, opening the door for the Ayatollah Khomeini to take over Iran.

The United States has enormous leverage in Egypt -- far more than it had in Iran. We provide Egypt with upwards of $2 billion a year in foreign aid under the provisos of the Camp David accords orchestrated by Carter. The Egyptian military, in particular, receives $1.3 billion of this money. The United States, as the pay master, needs to send a signal to the military that it will be supportive of its efforts to keep Egypt out of the hands of the Islamic fundamentalists. Instead, Obama has put our military aid to Egypt "under review" to pressure Mubarak to mute his response to the demonstrators and has given top priority to "preventing the loss of human life."

Obama should say that Egypt has always been a friend of the United States. He should point out that it was the first Arab country to make peace with Israel. He should recall that President Anwar Sadat, who signed the peace accords, paid for doing so with his life and that President Hosni Mubarak has carried on in his footsteps. He should condemn the efforts of the Muslim Brotherhood extremists to take over the country and indicate that America stands by her longtime ally. He should address the need for reform and urge Mubarak to enact needed changes. But his emphasis should be on standing with our ally.

The return of Nobel laureate Dr. Mohamed ElBaradei, the former head of the International Atomic Energy Agency (IAEA) has to Egypt as the presumptive heir to Mubarak tells us where this revolution is headed. Carolyn Glick, a columnist for the Jerusalem Post, explains how dangerous ElBaradei is. "As IAEA head," she writes, "Elbaradei shielded Iran's nuclear weapons program from the Security Council. He [has] continued to lobby against significant UN Security Council sanctions or other actions against Iran...Last week, he dismissed the threat of a nuclear armed Iran [saying] 'there is a lot of hype in this debate'."

As for the Muslim Brotherhood, Glick notes that "it forms the largest and best organized opposition to the Mubarak regime and [is] the progenitor of Hamas and al-Qaida. It seeks Egypt's transformation into an Islamic regime that will stand at the forefront of the global jihad."

Now is the time for Republicans and conservatives to start asking the question: Who is losing Egypt? We need to debunk the starry eyed idealistic yearning for reform and the fantasy that a liberal democracy will come from these demonstrations. It won't. Iranian domination will.

Egypt, with 80 million people, is the largest country in the Middle East or North Africa. Combined with Iran's 75 million (the second largest) they have 155 million people. By contrast the entire rest of the region -- Algeria, Morocco, Libya, Iraq, Saudi Arabia, Yemen, Syria, Tunisia, Jordan, UAE, Lebanon, Kuwait, Oman, and Qatar combined -- have only 200 million.

We must not let the two most populous and powerful nations in the region fall under the sway of Muslim extremism, the one through the weakness of Jimmy Carter and the other through the weakness of Barack Obama.

© Dick Morris & Eileen McGann

[BRVoice]

http://tweetgrid.com/search?q=%23egypt+%23jan25


nasry: dear #israel : if u like #mubarak that much,why dont u host him? he can win the israeli elections if he moved to Tel Aviv #egypt #jan25
segunda-feira, 31 de janeiro de 2011 15:35:37 [Reply] [ReTweet] [Favorite]

bieberle: RT @Farrah3m: People are trying to get to CAIRO, to join the MILLION MARCH, but they have LOCKED DOWN ALL ENTRANCES TO CAIRO! #jan25 #egypt
segunda-feira, 31 de janeiro de 2011 15:35:37 [Reply] [ReTweet] [Favorite]


amykishek: Leading Egyptian Feminist, Nawal El Saadawi: "Women and girls are, beside the boys, are in the streets" http://t.co/qQQJpMG #egypt #jan25
segunda-feira, 31 de janeiro de 2011 15:35:37 [Reply] [ReTweet] [Favorite]


rattlecans: Superb! Mubarak', your ticket is ready http://twitpic.com/3uw7tn #jan25 #egypt via @SubMedina
segunda-feira, 31 de janeiro de 2011 15:35:36 [Reply] [ReTweet] [Favorite]



amreldib: RT @AJArabic: المدير السابق لمكتب مبارك : الرئيس لم يكن يهتم بالتقارير الخاصة بأوضاع المواطنين المصريين #jan25 #Egypt #aljazeera
segunda-feira, 31 de janeiro de 2011 15:35:35 [Reply] [ReTweet] [Favorite]


ismaielo: RT @AmoonaE: Posted it earlier, but worth watch it AGAIN: Incredible footage from Cairo's Friday demo. http://bit.ly/eVuL9C #egypt #jan25 AMAZING.
segunda-feira, 31 de janeiro de 2011 15:35:35 [Reply] [ReTweet] [Favorite]


hamzimed: RT @alarabiya_ar: غادة عبد الرازق للعربية:طالبت بأن ننزل للمتظاهرين ونفهمهم أن ما يطلبونه سيؤدي لكارثة #alarabiya #egypt #cairo #jan25 #jan28 #Internet #25jan
segunda-feira, 31 de janeiro de 2011 15:35:31 [Reply] [ReTweet] [Favorite]


fubarista: RT @nolanjazeera: Unsure if arrested or about to be deported. 6 of us held at army checkpoint outside Hilton hotel. Equipment seized too. #Egypt #jan25
segunda-feira, 31 de janeiro de 2011 15:35:30 [Reply] [ReTweet] [Favorite]


AmrReda: RT @NahrainAM: Made in the USA: Tear Gas, Tanks, Helicopters, Rifles & Fighter Planes Used in #Egypt Protests. http://ow.ly/3NmSv #jan25 (Democracy Now)
segunda-feira, 31 de janeiro de 2011 15:35:29 [Reply] [ReTweet] [Favorite]


Linkin_Earth: RT @eacusa: #jan25 #egypt Mosque microphones are used to coordinate work among the different neighborhood watches.
segunda-feira, 31 de janeiro de 2011 15:35:28 [Reply] [ReTweet] [Favorite]


kinnghusso: RT @Jnoubiyeh: The "new government" appointed by #Mubarak looks exactly like the old government. It is an insult to the Egyptian people. #Egypt #Jan25
segunda-feira, 31 de janeiro de 2011 15:35:28 [Reply] [ReTweet] [Favorite]


kinnghusso: RT @Jnoubiyeh: The "new government" appointed by #Mubarak looks exactly like the old government. It is an insult to the Egyptian people. #Egypt #Jan25
segunda-feira, 31 de janeiro de 2011 15:35:28 [Reply] [ReTweet] [Favorite]


AlishaSanchez: RT @yasminhamidi: Incredible footage frm Cairo's Fri demo. I am in awe of the pple's courage. http://bit.ly/eVuL9C #egypt #jan25
segunda-feira, 31 de janeiro de 2011 15:35:26 [Reply] [ReTweet] [Favorite]


LinkeNews: RT @Jnoubiyeh: The "new government" appointed by #Mubarak looks exactly like the old government. It is an insult to the Egyptian people. #Egypt #Jan25
segunda-feira, 31 de janeiro de 2011 15:35:26 [Reply] [ReTweet] [Favorite]


sahoura: RT @Jnoubiyeh: The "new government" appointed by #Mubarak looks exactly like the old government. It is an insult to the Egyptian people. #Egypt #Jan25
segunda-feira, 31 de janeiro de 2011 15:35:25 [Reply] [ReTweet] [Favorite]


kerryabel: RT @broadleft: Defend Al Jazeera in Egypt – the revolution MUST be televised! @jodymcintyre @kevin_ovenden http://bit.ly/hOvkbW #Egypt #jan25
segunda-feira, 31 de janeiro de 2011 15:35:23 [Reply] [ReTweet] [Favorite]


abo_mazen: RT @mns_q: الدستور: شاشات عملاقه تعرض قناه الجزيره في ميدان التحرير ليتابعها المتظاهرون #JAN25 #Egypt #EGYPT #Cairo #jan25
segunda-feira, 31 de janeiro de 2011 15:35:23 [Reply] [ReTweet] [Favorite]


Nefermaat: @Dima_Khatib not surprising !! Just wanted to hear more about the direct reactions ! Mubarak still doesn't get it I guess... #Egypt #jan25
segunda-feira, 31 de janeiro de 2011 15:35:23 [Reply] [ReTweet] [Favorite]


JassimQ: غادة عبدالرازق على العربية تتفلسف، والنبي خليكي في "الهنس ف الدانس" #Jan25 #Egypt
segunda-feira, 31 de janeiro de 2011 15:35:22 [Reply] [ReTweet] [Favorite]


ismaielo: RT @AmoonaE: People in their shrouds ready to defend #Egypt. #Jan25 #Tahrir #1M #Feb1 http://yfrog.com/hsv3whvj (via @ShawkattRaghib)
segunda-feira, 31 de janeiro de 2011 15:35:22 [Reply] [ReTweet] [Favorite]


Tamer_Said: RT @madkentdragon: RT @TheNewsBlotter: CAIRO, Jan. 31 (UPI) -- Protesters prod army to ditch Mubarak http://bit.ly/fkweLc #Jan25 #Egypt
segunda-feira, 31 de janeiro de 2011 15:35:20 [Reply] [ReTweet] [Favorite]


CineversityTV: #Egypt: 250.000+ in Cairo http://ht.ly/3Nr8B, 120000 Mansoura, 50000 Beni Suef, 200000 in Mahalla Protest of 2 million tomorrow #Jan25
segunda-feira, 31 de janeiro de 2011 15:35:19 [Reply] [ReTweet] [Favorite]


tamaraehawk: RT @AlMasryAlYoum_E: Christians and Muslims work to provide security in Alexandria http://ow.ly/3NovQ #Jan25 #Egypt
segunda-feira, 31 de janeiro de 2011 15:35:19 [Reply] [ReTweet] [Favorite]


Ann0ula: Message to the ignorant: if you can't understand why "democratic" Israel doesn't support a democratic #Egypt, wake the hell up #jan25
segunda-feira, 31 de janeiro de 2011 15:35:18 [Reply] [ReTweet] [Favorite]


4tea2pub: @NickKristof @pmingram The US is criticized when they step in & when they don't. An unenviable predicament, I'm sure. #Egypt #Jan25
segunda-feira, 31 de janeiro de 2011 15:35:17 [Reply] [ReTweet] [Favorite]


4tea2pub: @NickKristof @pmingram The US is criticized when they step in & when they don't. An unenviable predicament, I'm sure. #Egypt #Jan25
segunda-feira, 31 de janeiro de 2011 15:35:17 [Reply] [ReTweet] [Favorite]


SovietUnit: RT @glcarlstrom: Protests slowly beginning to take an economic toll on ordinary Egyptians: http://ow.ly/3NqO1 #jan25 #egypt

[vector7]

Will Egypt Rock Our Economy?



Will the chaos in Egypt reverberate here financially? Charlie Gasparino on how some economists fear a return of 1970s-style "stagflation," and how Chinese policy helps stoke it.

All the signs have been pointing to a robust economy in 2011, from the president's pump-priming cave on Bush-era tax cuts (as well as accompanying extension benefits) to business openness to turning cash stockpiles into expansion. The stock market has cracked the 12000 level, and Republicans have been privately worrying that, in prodding Obama into adopting more free-market principles, they inadvertently saved his presidency.

Now comes the political crisis in Egypt and you can almost feel the markets fret. Oil prices have been edging up, the markets recorded their largest decline since November, and even worse, the chatter among many economists has raised the specter of global "stagflation," the economic disorder that made the late 1970s and early 1980s among the worst years for the economy since the Great Depression.

Of course, there are many reasons to be worried about Egypt's instability aside from its economic impact. Egypt is possibly our most important Arab ally, and a friend—or at least not an enemy—one of America's bedrock partners, its next-door neighbor Israel. In recent years, Egypt has seen a rise in Islamic fundamentalism, and the crisis that has stunned Mubarak, a despot with pro-U.S. leanings, has eerie parallels with the late 1970s, and the shah of Iran. You know how that turned out.

But the economic impact of Egypt's political unrest shouldn't be underestimated—and certainly not ignored by investors and economic policymakers. The markets, of course, are always looking for reasons to trade up or trade down, and after cranking out gains over the past eight weeks, looting and rioting in the Middle East was as good as a reason as any for traders to take some profits.

Still, what happened Friday wasn't a mere hiccup for a market poised for Dow 12000 and above; rather it's the realization that a government potentially hostile to the U.S. and its interests could control the Suez Canal, a vital shipping lane for oil coming from the Middle East and to the West; it is a recalculation of the risk of severe economic turmoil if Egypt is swept into a radical Islamic frenzy and if oil prices double or even triple as a result; it's the recognition that for all the positive forces influencing the economy now, there's also a strong undercurrent of weakness, a structural imbalance that makes stagflation—where a economy suffers from both high unemployment and high inflation—a very real possibility.

There are many reasons to avoid anything to do with the 1970s—stagflation trumps them all.

There are, of course, many reasons to avoid anything to do with the 1970s—bad hairstyles, platform shoes, Watergate, and Jimmy Carter's presidency, to name just a few. But for my money, stagflation trumps them all. Inflation normally occurs when economies become "overheated," i.e., too many people making money chasing too few goods and services. Prices then begin to rise, to reflect this scarcity.

• Peter Beinart: Obama’s Mideast Moment of Truth
• Howard Kurtz: Al Jazeera’s Big Moment

With stagflation, inflation occurs when the economy is already weak.

It begins with an exogenous event—a "price shock" that lights the inflationary fuse, and causes a weak economy to now grow weaker as businesses cut costs to remain profitable by shedding jobs.

One of the few ways to deal with stagflation is to make a bad economic situation even worse and squeeze the economy even more—as former Fed Chairman Paul Volcker did during late 1970s and early 1980s when he raised interest rates and the country suffered massive unemployment.

That, combined with tax cuts enacted by President Reagan, quashed inflation and restored economic growth—but only after nearly a decade of chaos.

In the 1970s, the exogenous event that started it all was the Arab oil embargo of the U.S. and many of our Western allies because of our support of Israel. It set off the inflationary cycle in everything oil-related, from gasoline to food and it's the possibility of high oil prices, triggered by Egypt, that has reintroduced stagflation into the current economic debate.

Consider the similarities: Egypt isn't a big oil producer, but it does play a role in the distribution of oil to the West, so unrest and instability there could result in oil shortages, or even worse.

The possibility of fundamentalism sweeping not just Egypt but other oil-producing Arab states (think Saudi Arabia) is often on the minds of traders in the futures markets, who continuously wager on oil prices, but even more so when the Egypt chaos began to fester last week.

Moreover, the 1970s was a decade of weak economic growth, similar to the current momentum, so any shock to the system could send the economy into a tailspin, as it did back then.

"Higher oil prices could result in inflation and this could result in some developing countries trying to slow their economies," says Sandy Leeds, a former money manager and now a professor of finance at the University of Texas at Austin. Leeds calls higher oil prices "a tax on the consumer" that's even worse than regular taxes because the U.S. government doesn't get any of the revenue—the foreign oil producers do.

On top of that, he says that "by some estimates, developing countries will account for half of the global GDP growth this year. As a result, if these countries try to slow their economy it could affect us all."

Economist Peter Morici of the University of Maryland takes the stagflation debate a step further. He makes a good case that stagflation has already begun in places outside the U.S., and the events in Egypt could kindle it here, if it hasn't already begun. He points to burgeoning Chinese economy's thirst for everything from oil to food, driving up commodity prices in ways that don't necessarily register with superficial measurements of inflation such as the CPI and PPI, but have a real impact on consumers worldwide.

Morici blames the return of stagflation on "Chinese mercantilism" as its government fixes oil prices at home at low levels. The Chinese, he says, are "subsidizing gasoline consumption, which is galloping," and "sucking up" commodities across the planet; in the U.S., the impact of China's command-control brand of capitalism has been muted by other factors at least so far, but in places like Egypt where jobs are scarce, the impact is devastating.

"If you want to know why there are riots in Egypt, it's because of Chinese mercantilism," he says.

Moody's Investors Service economist John Lonksi calls it a "bit of a stretch" to say the U.S. is now suffering from stagflation, since inflation has remained relatively even with the Federal Reserve aggressively printing money following the 2009 banking collapse; oil prices, he points out, are still relatively low, trading below $90 a barrel (and falling before the Egyptian crisis), so gasoline prices have remained stable.

Yet Lonki remains worried, less about Egypt than the nuclear threat coming from Iran, and a possibile war with Israel that could shut down oil supply, leading to a cataclysmic spike in oil prices—the "price shock" needed to ignite stagflation.

Of course, cooler heads may well prevail: The Mubarak government may give up power and embrace democracy; the Egyptian military might play grownup and support a transitional government that better reflects the will of the people; the Suez Canal may remain open to one and all; and the radical Islamists, namely the Muslim Brotherhood, may be less radical there and in neighboring Arab states.

Maybe all this will happen, but there's a good chance it won't—and if so, it could be 1978 all over again.

[vector7]

Israel agrees to some Egyptian troops in Sinai

A
P – People walk past a burned police station in Cairo, Egypt, Monday Jan. 31, 2011. Police and garbage …

• Play Video Mideast Video:Political Crisis Rocks Lebanon FOX News
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• Play Video Mideast Video:Sparks fly for Turkey's celluloid super spy AFP

By JOSEF FEDERMAN, Associated Press Josef Federman, Associated Press – 1 hr 4 mins ago

JERUSALEM – Israeli officials said Monday that they have agreed to let Egypt move several hundred troops into the Sinai peninsula for the first time since the countries reached peace three decades ago.

With street protests threatening the Egyptian regime, the officials say that Israel allowed the Egyptian army to move two battalions — about 800 soldiers — into Sinai on Sunday. The officials said the troops were based in the Sharm el-Sheikh area on Sinai's southern tip, far from Israel.

Under the 1979 peace treaty, Israel returned the captured Sinai to Egypt. In return, Egypt agreed to leave the area, which borders southern Israel, demilitarized. The arid peninsula lies between Egypt's mainland and Israel, and Israel was worried about an Egyptian invasion then.

Now, as the unrest in Egypt has spread, Israeli officials have grown increasingly concerned about the stability of their southern neighbor.

They are especially worried that Palestinian militants could take advantage of the unrest to smuggle weapons into the Gaza Strip through tunnels under the Egypt-Gaza border.

The Israeli officials spoke Monday about the troop movements on condition of anonymity because Prime Minister Benjamin Netanyahu has banned the government from discussing the situation in Egypt.

There was no confirmation from Egypt, and David Satterfield, the director general of an independent 12-nation monitoring force in Sinai, refused to comment.

Shmuel Zakai, a retired general who once commanded the Israeli military's Gaza division, said the arrival of Egyptian troops in Sinai was a positive development.

"I think it's an encouraging sign that they are doing it in coordination and not in a one-sided step," he told Israel's Army Radio station. He predicted in the future that Egyptian forces would move deeper into the Sinai to control "high concentrations of armed Bedouin gangs."

Netanyahu said Sunday that Israel is "anxiously following" the developments in Egypt — reflecting Israel's concern that Egyptian President Hosni Mubarak's days in power could be limited. Mubarak has been a key ally for Israel, strictly honoring the peace treaty during his 30 years in power and frequently acting as a bridge between Israel and the Palestinians to the broader Arab world.

Israeli President Shimon Peres said "we always have had and still have a great respect" for Mubarak. "I don't say everything that he did was right, but he did one thing for which all of us are thankful to him: He kept the peace in the Middle East," Peres said Monday.

In an interview, international Mideast envoy Tony Blair said Monday that a change in Egypt's leadership appears inevitable. "Change will happen. You can't put the genie back in the bottle now," he said.

The former British prime minister did not say explicitly whether Mubarak should step down. He said it's important that Egypt holds proper elections and that any transition be peaceful.

"People want to get to a position where the Egyptian people are able to express their will in free and fair elections," he said. "But I think the watchword is change with care, because at the same time we have to make sure any change occurs with stability and order."

In particular, he said he was concerned that unrest in Egypt could disrupt the Israeli-Palestinian peace process.

Blair represents the international "Quartet" of Mideast peacemakers — the U.S., the European Union, Russia and the United Nations — which is set to gather next week to discuss stalled peace efforts between Israel and the Palestinians.

He acknowledged the unrest in Egypt has put Western powers, especially the U.S., in the difficult position of choosing between a longtime ally and a grass roots protest movement demanding more freedom.

"I think when people criticize America over this, they're being a bit unfair," Blair said, adding that President Barack Obama has handled the crisis in "the only way he can."

"That's why the sensible thing to do is to partner the process of change and make sure we get the right change, with order," he said.

Blair said the focus of the upcoming Quartet meeting would be to get the sides talking again, a task he acknowledged has become more difficult by the situation in Egypt.

Negotiations have been stalled for more than three months because of disagreements over Israeli settlement construction in areas claimed by the Palestinians.

"I think there's one key issue really that is necessary to revive direct negotiations and get this process back under way, and that is to give credibility to the notion that we want a Palestinian state," Blair said.

Meanwhile, Israel's flagship carrier, El Al, said it has expanded its capacity to fly Israelis out of Egypt. The airline said 400 Israelis arrived from Cairo early Monday, and another flight was expected later in the evening.

[Ryan Ruck]

Dated Brent oil flirting heavily with $100/bbl.

[American Patriot]

The Donald thinks this will be good for oil prices. haha

[Ryan Ruck]

FNC saying that museums have had things damaged and looted. Good thing the western nations gave so many artifacts back to Egypt.

That is really sad...

[American Patriot]

Some day, if I come across them and have time, I'll scan the photos of some stuff I took over there.