Egypt Is An Excuse

Even if the Egyptians overthrow their government I believe there will be little long term effect on world economies. Does that make today's beating a buying opportunity? Not necessarily. Whenever markets are this extended and sentiment is so lopsided, the market finds an excuse to correct. Can this be the excuse for a correction even if in the long term it means little? Its as good of an excuse for a correction as any.


Onlooker said...

Yep, and it also provides a great rationale for the talking heads as to why gold/silver are bottoming out of their correction (IMO). I don't listen to CNBC, etc., but I'm sure all the chatter is about the "flight to safety" trade being on due to this unrest.

Anonymous said...

The Egyptians are rioting because of food prices spiraling out of control. That is caused by commodities speculation which in turn is caused by Ben Bernanke.

This is where the printing press solution to the deleveraging process hits the wall.

revelo said...

It's not Bernanke. It's the Chinese who have inflation, not the US. These riots are a warning to the Chinese. Either they (a) give the workers enough of a pay raise to compensate for all the food price inflation, which would cause a wage-price spiral to blow out of control, or (b) they risk uprisings, or (c) they start to crack down on the inflation they are exporting, which will crush the Chinese speculators (many of whom have political ties). I think they'll for option (c), but compensate the more political connected speculators in some way or another while throwing the other speculators under the bus. If so, this will burst all sorts of remaining bubbles (commodities bubble, chinese housing bubble, Australian housing bubble, emerging stocks bubble) and send the world back towards deflation.

nicasurfer said...

I am in total agreement that inflation is not being felt in the united states and europe for that matter.

I can tell you first hand that it is being felt in nicaragua. The people are hungry and rice is at an all time high for these people.

A cow you could buy for $600 a year ago sells for $1500 now. This isn't really shown in futures pricing but this is a real price increase. Some of these people are selling thier farms to western investors.

It is only a matter of time until the world places the blame on the united states. We have decided to take the option of inflating our way out of this mess. I don't believe we can stop and the heads in place now don't really get it.

Stuff is gonna get a lot more expensive for us here. It is coming.

Anonymous said...

People always look for reasons..