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Guest Post: The CIA On Egypt's Economy, Financial Deregulation And Protest

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Submitted by Nomi Prins

The CIA on Egypt's Economy, Financial Deregulation and Protest

The ongoing demonstrations in
Egypt are as much, if not more, about the mass deterioration of economic
conditions and the harsh result of years of financial deregulation,
than the political ideology that some of the media seems more focused
on. Plus, as Mark Engler cross-posted on
Alternet and Dissent yesterday, the notion that the protests in Cairo
are 'spontaneous uprisings' misses the mark. As he eloquently wrote,
"there are extraordinary moments when public demonstrations take on a
mass character and people who would otherwise not have dreamed of taking
part in an uprising rush onto the streets. But these protests are
typically built upon years of organizing and preparation on the part of
social movements."

That got me thinking about what else has
been building up in Egypt under Mubarak's 29-year as President, but
more specifically over the past decade, and in particular the years
leading up to the world economic crisis catalyzed by the US banking
system - and that would be, extreme financial deregulation and the
increased influx of foreign banks, capital, and "investment" which tends
to be a euphemism for "speculation" when it belies international funds
looking for hot prospects, no matter what the costs to the local
population.

According to the CIA's World Fact-book depiction of Egypt's economy,
"Cairo from 2004 to 2008 aggressively pursued economic reforms to
attract foreign investment and facilitate GDP growth." And, while that
was happening, "Despite the relatively high levels of economic growth
over the past few years, living conditions for the average Egyptian
remain poor."

Unemployment in Egypt is hovering just
below the 10% mark, like in the US, though similarly, this figure
grossly underestimates underemployment, quality of employment, prospects
for employment, and the growing youth population with a dismal job
future. Nearly 20% of the country live below the poverty line (compared
to 14% and growing in the US) and 10% of the population controls 28% of
household income (compared to 30% in the US). But, these figures, as in
the US, have been accelerating in ways that undermine financial security
of the majority of the population, and have been doing so for more than
have a decade.

Around 2005, Egypt decided to transform
its financial system in order to increase its appeal as a magnet for
foreign investment, notably banks and real estate speculators. Egypt
reduced cumbersome bureaucracy and regulations around foreign property
investment through decree (number 583.) International luxury property
firms depicted the country as a mecca (of the tax-haven variety) for property speculation, a country offering no capital gains taxes on real estate transactions, no stamp duty, and no inheritance tax.  

But, Egypt's more devastating economic
transformation centered around its decision to aggressively sell off its
national banks as a matter of foreign and financial policy between 2005
and early 2008 (around the time that US banks were stoking a global
sub-prime and other forms-of-debt and leverage oriented crisis). Having
opened its real estate to foreign investment and private equity
speculation, the next step in the deregulation of the country's banks
was spurring international bank takeovers complete with new bank
openings, where international banks could begin plowing Egyptians for
fees. Citigroup, for example, launched the first Cards reward program in 2005, followed by other banks.

According to an article in Executive Magazine in early 2007,
which touted the competitive bidding, acquistion and rebranding of
Egyptian banks by foreign banks and growth of foreign M&A action,
the biggest bank deal of 2006 was the sale of one of the four largest
state-run banks, Bank of Alexandria, to Italian bank, Gruppo Sanpaolo
IMI. This, a much larger deal than the 70% acquisition by Greek's
Piraeus Bank of the Egyptian Commercial Bank in 2005, one of the first
deals to be blessed by the Central Bank of Egypt and the Ministry of
Investment that unleashed the sale of Egypt's banking system to the
highest international bidders.

The greater the pace of foreign bank
influx and take-overs to 'modernize' Egypt's banking system, inevitably
the more short-term, "hot" money poured into Egypt. Pieces of Egypt, or
its companies, continued to be purchased by foreign conglomerates,
trickling off when the global financial crisis brewed full force in
2008, though not before Goldman Sachs Strategic Investments Limited in
the UK bought a $70 million chunk of Palm Hills Development SAE, a high-end real estate developer, in March, 2008.

When a country, among other
shortcomings, relinquishes its financial system and its population's
well-being to the pursuit of 'good deals', there is going to be
substantial fallout. The citizens protesting in the streets of Greece,
England, Tunisia, Egypt and anywhere else, may be revolting on a
national basis against individual leaderships that have shafted them,
but they have a common bond; they are revolting against a world besotted
with benefiting the powerful and the deal-makers at the expense of
ordinary people.

 


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Sun, 01/30/2011 - 20:26 | Link to Comment Missing_Link
Missing_Link's picture

Egypt's population has grown while its economy has not.  It's that simple.

Yes, that's caused in large part by the failures of Mubarak's regime  ...  but nearly all of the Middle East is in exactly the same sinking ship.

You simply can't have prosperity if your GDP-per-capita ratio gets too low.  As the numerator declines and the denominator grows, the number gets smaller, and just a tiny bit of inflation is enough to push people across the looting-and-rioting threshold.

This is not a new phenomenon by any stretch of the imagination, nor is it caused by external factors.

Look at the French Revolution, Bolsheviks vs Mensheviks in Russia, endless food riots in ancient Greece and Rome and Judea.  Population grows and outpaces GDP, and people go crazy until enough of them die to bring the GDP-per-capita ratio back in line.

Sun, 01/30/2011 - 20:31 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Yup. But unlike some countries, Egyptians don't have the facility to print endless IOUs and use them to cover a giant negative trade balance. 

Sun, 01/30/2011 - 20:39 | Link to Comment topcallingtroll
topcallingtroll's picture

Its good to be an American!

Sun, 01/30/2011 - 20:44 | Link to Comment yabyum
yabyum's picture

Happy meal and Idol, it's all good.

Sun, 01/30/2011 - 20:45 | Link to Comment snowball777
snowball777's picture

US: 11.1 suicides per 100k people

Egypt: 6.5 per 100k

Sun, 01/30/2011 - 20:51 | Link to Comment topcallingtroll
topcallingtroll's picture

There are other parameters to compare and contrast quality of life in egypt versus the usa.

Sun, 01/30/2011 - 21:10 | Link to Comment snowball777
snowball777's picture

Ratio of Charlie Sheens to Suez Canals?

Sun, 01/30/2011 - 22:04 | Link to Comment Quackking
Quackking's picture

The best metric I have seen this year. +1!

Sun, 01/30/2011 - 22:15 | Link to Comment Hephasteus
Hephasteus's picture

Which costs more to dredge?

Mon, 01/31/2011 - 05:44 | Link to Comment Sudden Debt
Sudden Debt's picture

Anybody who survives a sex orgy with 3 pornstars for 36 hours is a hero and should run for president!!

 

CHARLIE SHEEN FOR PRESIDENT!! HE'LL FUCK YOU ALL!!

Mon, 01/31/2011 - 07:14 | Link to Comment unky
unky's picture

i bet he didnt even have any sex as he took so much kokain

Sun, 01/30/2011 - 21:09 | Link to Comment Missing_Link
Missing_Link's picture

I wasn't defending the US, nor any US policies.  I just felt that among all the finger-pointing about inflationary policies and so on and all the various silly rants by certain individuals that the Egyptian revolution is the USA's fault for supporting Mubarak  ...

...  it would be a good idea to keep it in the perspective of countries that grow beyond their means of supporting their population.  That's the core of the problem across the Middle East (along with religious fundamentalism which, among other things, encourages unsustainable population growth).

Sun, 01/30/2011 - 20:31 | Link to Comment MacHoolahan
MacHoolahan's picture

Depressingly true but *please* tell me that we get to shoot the ex-leaders (however irrelevant to the outcome that it might be) in some sqaulid basement somewhere along the way.

 

Here in the UK we've just had to watch Blair doing his "God told him" routine about Iraq again.

Sun, 01/30/2011 - 22:18 | Link to Comment vxpatel
vxpatel's picture

Blair blows Jesus to? I thought that was an American politician thing...W!

PALIN/QUAYLE 2012

For a dumber fatter more Jesus Amerika!

Sun, 01/30/2011 - 23:08 | Link to Comment Blankman
Blankman's picture

"For a dumber fatter more Jesus Amerika!"

I like the slogan.

Mon, 01/31/2011 - 00:43 | Link to Comment vxpatel
vxpatel's picture

Yes we can!

Mon, 01/31/2011 - 02:42 | Link to Comment Moonrajah
Moonrajah's picture

Actually, with the current education it should read as:

'yes wee kan +1 omg'

Mon, 01/31/2011 - 00:21 | Link to Comment sushi
sushi's picture

A potatoe in every pot and free caribou hunting licenses for everyone!

Mon, 01/31/2011 - 02:48 | Link to Comment Dave
Dave's picture

That's a ticket that would assure Obama's re-election. I like the slogan too.

Sun, 01/30/2011 - 20:59 | Link to Comment Missing_Link
Missing_Link's picture

Yes, all of that data actually supports my point.

Compare Egypt's population growth rate with the US, the UK, or Israel.  Egypt's population has been growing at DOUBLE the rate, which is unsustainable.

Then compare its seemingly "growing" GDP with what's actually required to support such a population, or the GDP oof the US, the UK, or Israel. 

Nice try, though.

Mon, 01/31/2011 - 11:53 | Link to Comment Doomer_Marx
Doomer_Marx's picture

I think what's missing in the charts is the inflation rate: http://www.indexmundi.com/g/g.aspx?v=71&c=eg&l=en and per capita GDP: http://www.indexmundi.com/g/g.aspx?v=67&c=eg&l=en. It looks like per capita GDP (or rather PPP) is going slightly down while inflation is going way up - 18.3% for 2009. I think PPP is suppose to include some inflation since it is compared against other currencies but if there's world wide inflation, would it capture that? Numbers for 2010 would be interesting.

Inequality compounds the problem but the underlying problem is popluation growth without enough resource growth and is world wide. But at this point, I'd say the inequality is causing more problems than popluation/resource pressure alone. Societies tend to allow some measure of inequality as long as there is enough to keep everyone in bread and a circus here and there, so the top can skim off the rest of the cream. When there's less cream and the top is skimming off more and more, problems appear.

Sun, 01/30/2011 - 21:52 | Link to Comment palmereldritch
palmereldritch's picture

Another parameter to consider for the volatility index:

Egypt

Egypt does not fluoridate water, although a pilot study commenced in Alexandria.[4]
http://en.wikipedia.org/wiki/Fluoridation_by_country

http://organichealthadviser.com/archives/fluoride-dangers

http://futurestorm.blogspot.com/2009/01/fluoride-and-aspartame-numbing-d...

Sun, 01/30/2011 - 20:53 | Link to Comment YHC-FTSE
YHC-FTSE's picture

Sorry, GDP per capita ratio for determining the point at which civil disobedience starts wrongly assumes that wealth is evenly spread across the population sectors, and not disproportionately in the hands of the deal makers and the powerful as this article suggests. Population is always a factor, but the determining driver for social unrest is inequity. 

(ps I do not junk)

Sun, 01/30/2011 - 21:07 | Link to Comment Missing_Link
Missing_Link's picture

Well, I didn't mean to imply that it was the only factor.

Certainly inequality matters.

But it matters much more in a country like Egypt, where the GDP-per-capita ratio puts the citizens that much closer to abject poverty in the first place, than a country like the US, where we haven't reached that point just yet.

Our "poor" are still able to get food stamps, and a lot of them live in homes they actually own, thanks to subprime lending.

Look at the French Revolution.  Yes, there was inequality.  But the peasants didn't revolt because of Versailles; they revolted because they had been made desperately poor and could no longer feed themselves.

Ultimately, it wasn't class resentment that made the French revolt.  If the French had been able to feed themselves and live comfortably, they'd have been able to happily point at Versailles and say, "Oh, who cares if King Louis has such a nice palace?  Really, we've all got food on the table, we shouldn't harbor resentment."

Mon, 01/31/2011 - 01:15 | Link to Comment Aristarchan
Aristarchan's picture

You are very correct.

Sun, 01/30/2011 - 21:24 | Link to Comment dearth vader
dearth vader's picture

A clip from today's Spiegel article, part 3: http://www.spiegel.de/international/world/0,1518,742458,00.html

The Egyptian economy has grown in recent years, and prices on Egypt's stock exchange, which fell by 17 percent last week, have almost tripled since 2005. Many business owners have benefited from this development, which attracted foreign capital to the country. Nevertheless, even as the rich were raking in profits, ordinary people became increasingly frustrated when economic growth failed to improve conditions in the labor market. Some 40 percent of the population live on less than $2 a day, and even members of the educated middle class, whose sons and daughters took to the streets last week, see no improvements in their situation, with real unemployment likely hovering around 20 percent.
Mubarak has built up his army, thanks in part to the $1.3 billion (€955 million) in annual military aid he receives from Washington. Meanwhile, he has forgotten his people. "I have no problem with Mubarak running our country," says a protester in Cairo. "But I need a job!"

Sun, 01/30/2011 - 22:45 | Link to Comment puckles
puckles's picture

Quite frankly, there's not too much difference in terms of population growing, while the economy is not, here in the good old USA.  Denninger had a piece yesterday about this, and deconstructed the well-spun "good news" into really bad news, i.e., that we have actually had negative growth for quite some time.  

Oh, and by the way, we have also not only built up our army, but also increased defense numbers of all varieties spectacularly, ever since the Patriot Acts, as renewed incessantly, got rid of Posse Comitatus. Once the troops come home from Iraq and Afghanistan, it is unlikely that they will end up unemployed.

Sun, 01/30/2011 - 23:37 | Link to Comment Triggernometry
Triggernometry's picture

Speaking of Bolsheviks, let's hope we don't see another Dzerzhinsky.

Sun, 01/30/2011 - 20:27 | Link to Comment tickhound
tickhound's picture

C'mon europe... your turn again. America needs a louder wake up call. Now back to Ice Road Truckers...

Sun, 01/30/2011 - 20:27 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

kill the banks now.

Sun, 01/30/2011 - 20:51 | Link to Comment bunkermeatheadp...
bunkermeatheadprogeny's picture

They're already dead. Bernanke is having his weekend at Bernie's.

Sun, 01/30/2011 - 21:26 | Link to Comment snowball777
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+pun

Mon, 01/31/2011 - 00:24 | Link to Comment RockyRacoon
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That's funny.

Sun, 01/30/2011 - 20:28 | Link to Comment Caviar Emptor
Caviar Emptor's picture

Distressing tweets coming out of Suez: gov troops shutting off electricity and water, hospitals without current, injured people in the streets, troops have besieged the city

Sun, 01/30/2011 - 20:37 | Link to Comment Walcott14
Walcott14's picture

In relation to the protests in Egypt, a wonderful documentary has just been released a couple of days ago that speaks exactly about the true problems of the current socioeconomic monetary paradigm which governs the entire world society. 

Check out http://www.imdb.com/title/tt1781069/ for more info.

You can watch a short teaser here http://www.youtube.com/watch?v=qxpvyMsRvkw

I highly reccomend it to all ZeroHedge followers and I would also like to point out that this documentary has absolutely NOTHING to do with religion, NWO, Marxism or other propaganda that might get attached to it 

Sun, 01/30/2011 - 22:24 | Link to Comment DavidPierre
DavidPierre's picture

ZEITGEIST: MOVING FORWARD | OFFICIAL RELEASE | 2011

http://www.youtube.com/watch?v=4Z9WVZddH9w

Sun, 01/30/2011 - 23:53 | Link to Comment Walcott14
Walcott14's picture

After a rather lengthy intro about human nature, Max Keiser and dr. John McMurtyr are exposing the global ponzi derivative scheme, discussing how cyclical consumption is currently driving the markets, Goldman Sachs, HFT, inflation, unemployment crysis caused by work outsourcing and many other thought-provoking topics unknown to the general public.

The main aim of the Film is to raise awareness and present a possible solution by introducing a radically new concept of "Resource Based Economy".

The authors also predict that we will be seeing many more world-wide protests, similar to what is currently going on in Egypt. 

Mon, 01/31/2011 - 03:11 | Link to Comment Dave
Dave's picture

I hope it is received better than the movie about Wal Mart. But I seriously doubt it will be.

Mon, 01/31/2011 - 06:50 | Link to Comment Walcott14
Walcott14's picture

I have no doubt about that... "Zeitgeist: Moving Forward (2011)" is skyrocketing on YouTube's Top Rated and Most Popular charts...

Sun, 01/30/2011 - 20:43 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

i give you my dream ticket for 2012 to fix the country

chris whalen/nomi prins. 

Mon, 01/31/2011 - 00:32 | Link to Comment sushi
sushi's picture

Was Regan embalmed? Is that process reversible?

Mon, 01/31/2011 - 03:30 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

 

i have been a fan since i saw nomi on "democracy now", that day of infamy when hank & nancy pushed thru the bailout bill, after it failed the first time and the lobbyists had had a chance to call THEIR congresswhores and get this straightened out!

amy g:  what would have happened if this bill had not been passed?

nomi p: the gamblers would all be broke.

 

this is a nice piece of the puzzle.  ty!

i'm such a dumbass that when those guys fron nigeria e-mailed me about getting in on the ground floor of taking over the egyptian national banks, i thought it was a scam!

Sun, 01/30/2011 - 20:47 | Link to Comment Downtoolong
Downtoolong's picture

The ongoing demonstrations in Egypt are as much, if not more, about the mass deterioration of economic conditions and the harsh result of years of financial deregulation, than the political ideology that some of the media seems more focused on.

 

No doubt, and disparity in wealth too.

 

What would piss you off more, that you can’t speak at your city council meeting, or that your rent has tripled and your real income has fallen while your president’s wife (the hairdresser who used to work down the street) bought herself 30 Ferraris?

Sun, 01/30/2011 - 20:47 | Link to Comment AUD
AUD's picture

they have a common bond; they are revolting against a world besotted with benefiting the powerful and the deal-makers at the expense of ordinary people.

Or in simpler terms, they are revolting against the bad credit of the government, which is being forced on them by the government.

Sun, 01/30/2011 - 20:47 | Link to Comment topcallingtroll
topcallingtroll's picture

The comments about egyptian population growth are on the mark. Nothing can change unless they address it. They will be 50 percent soylent green in their diet in 50 years unless the west allows massive immigration or the cornucopians are correct. Personally if i were an egyptian i would do anything to get out. Your posterity is totally fucked if you stay in egypt. It doesnt matter who the new boss is, they are in desperate trouble because their population is set to just about double before it supposedly plateaus once they have an educated female population and higher standard of living. Those last two assumptions for stable population leveling off versus blow off parabolic top and massive die off are highly suspect to me.

Sun, 01/30/2011 - 20:49 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Y'all are overthinking it all again and worshipping at the altar of normalcy.

Things are not normal and never will be again.

Egypt's oil production is down from 900+K barrels per day to its present 703K barrels per day in about 20 yrs.  That's 200K X $90 X 365 = $6.57 BILLION dollars per year they are not getting because their oil production fell 22% in 20 years.

What is that?  3X the US foreign aid sent to them?

If they had not depleted, if they had bigger fields, there would be no riots there.  This isn't about politics.  It's about money.

Sun, 01/30/2011 - 20:55 | Link to Comment bunkermeatheadp...
bunkermeatheadprogeny's picture

Or was production ordered downward by corrupt Egyptian politicians because the U.S. told them to?

Sun, 01/30/2011 - 20:58 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Ya, they obeyed orders that prevented them from getting a piece of $6 BILLION a year.  

How about a different explanation -- a radical one -- like . . . they drained their reservoirs and they don't have enough left to maintain previous production levels.  

Wow, imagine that.

Sun, 01/30/2011 - 21:03 | Link to Comment bunkermeatheadp...
bunkermeatheadprogeny's picture

Your math is off. You are not subtracting production costs.

Sun, 01/30/2011 - 21:30 | Link to Comment CrashisOptimistic
CrashisOptimistic's picture

Legit point.  But that's really easy/cheap oil over there.  Maybe $15/barrel?  They would have rec'd $75 rather than 90, or $85 rather than 100 soon.

Sun, 01/30/2011 - 20:59 | Link to Comment Dollar Bill Hiccup
Dollar Bill Hiccup's picture

I've read that Gamal Mubarak, heir apparent and apparently no longer (t)here, was practicing to be a modern Oligarch, along with his buddies who would have sold the pyramids if they could have. He was deregulation. Hence, the deluge. The Army was not so happy with the little snot. Maybe he can get a job w/ GS in London after the smoke clears.

Now that it's hotting up, I say bring on the locusts, let's get biblical.

Sun, 01/30/2011 - 21:30 | Link to Comment brodix
brodix's picture

That explains a lot.

Mon, 01/31/2011 - 00:50 | Link to Comment Nikao7
Nikao7's picture

+1000

Sun, 01/30/2011 - 21:27 | Link to Comment ebworthen
ebworthen's picture

Honestly, watching the people of Egypt makes me feel that we in the U.S.A. have lost our guts, spirit, or both.

Sun, 01/30/2011 - 21:28 | Link to Comment gwar5
gwar5's picture

Bankers are setting the world on fire because they are toast and trying to land butter side up.

Sun, 01/30/2011 - 21:54 | Link to Comment brodix
brodix's picture

Capitalism is setting the world on fire because capital is subject to the law of supply and demand, but supply has political leverage over demand/borrowers. So after sucking out whatever value they can, those supplying the capital have to keep finding new borrowers. After thirty years of explicit supply side capitalism, the world is overrun by liquidity and out of solvency.

 Money that is publicly guaranteed is a form of public utility, or contract and has to be treated as such. As economic medium, it is conceptually similar to a public road system. We own our houses, car, businesses, etc, but not the roads connecting them and no one cries socialism over that. If people understood money as a form of public commons, they would be much more careful what value they take from personal resources and relations to convert into money. This would reduce the influence the banks and governments have over every aspect of our lives. We all like having roads, but their is little inclination to pave more than is necessary. If we applied the same principle to money, we might have a healthier society and more stable economy.

 The fact is that is doesn't work to treat money as a private store of wealth, because that promote far more money being created than there are goods to trade for it and the system is bound to collapse. Money is a tool, not a god. You can curse a god and nothing happens, but you screw up the tools and you can get your hand cut off.

If you really think that piece of paper in your wallet is yours, just try running it through a copy machine and see who holds the copyright.

 Free markets and capitalism are not synonymous, because a market needs a medium of exchange in order to function and when a private party provides that medium, the rest of the economy is domestic to that party. The money and management of it, has to be a public function, just like the courts and cops.

Mon, 01/31/2011 - 00:20 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

 

are you married?

Mon, 01/31/2011 - 03:00 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

 

i'm a wharf rat.

pisces.

taurus?

what you said sent a lot of blood to my ears!

Mon, 01/31/2011 - 07:33 | Link to Comment brodix
brodix's picture

Yes.

Pisces. 

I'm a farm rat.

Mon, 01/31/2011 - 00:55 | Link to Comment Nikao7
Nikao7's picture

Well said! That comment is email material;)

Mon, 01/31/2011 - 07:55 | Link to Comment brodix
brodix's picture

Money as a public function does have a bad history, as leaving the politicians in charge of it tends to let them print to fill wishes and promises. 

 As a biological analogy, government is the central nervous system while finance is the circulatory system and in plants they are effectively the same, but in animals, they are separate, so it would likely work better to have banking as a fairly distinct branch of government. As well as making it bottom up, with local public banks, who know their customers, doing the ground level savings and lending and using profits as local income. Then state banks supporting them and serving as boards to regional and or national banks.

 The fact is that our federal budgeting process is designed to overspend, since they simply put together these enormous bills, then tack on enough extras to buy enough votes and the president can only pass or veto it. Actual budgeting is to draw up a list of priorities, then draw a line at what can be afforded. To do this the legislature could break the bill into its various "line items," then have each legislator assign a percentage to each one and re-assemble the bill in order of preference. The president then draws the line. As the few items on the line would have a smaller constituency than those asked to pay for them, there would be little inclination to overspend. This effectively divides responsibility, with the legislature prioritizing and the president setting the limits.

This would crash our current debt based financial system though, as government debt is the primary investment vehicle. A public banking system would cover much of the local spending that now goes through federal channels though.

Mon, 01/31/2011 - 08:42 | Link to Comment snowball777
snowball777's picture

The problem with capitalism is that you eventually run out of other people's labor.

Sun, 01/30/2011 - 21:42 | Link to Comment omi
omi's picture

Llybia should be ok, Russia has control.

Sun, 01/30/2011 - 21:42 | Link to Comment samsara
samsara's picture

Again,  this is around stage 3 or 4 in the IMFs game plan according to person from the inside. 

Give a read, this interview was from 2001, see if it rings true for Tunisia, and Egypt and the rest.  Something like SA 20 -30 years ago.

 ======

<Snip>

Each nation's economy is individually analyzed, then, says Stiglitz, the Bank hands every minister the same exact four-step program......

<SNIP>

After briberization, Step Two of the IMF/World Bank one-size-fits-all rescue-your-economy plan is 'Capital Market Liberalization.....

At this point, the IMF drags the gasping nation to Step Three: Market-Based Pricing, a fancy term for raising prices on food, water and cooking gas. This leads, predictably, to Step-Three-and-a-Half: what Stiglitz calls, "The IMF riot.".....

<SNIP>

The IMF riot is painfully predictable. When a nation is, "down and out, [the IMF] takes advantage and squeezes the last pound of blood out of them. They turn up the heat until, finally, the whole cauldron blows up," as when the IMF eliminated food and fuel subsidies for the poor in Indonesia in 1998. Indonesia exploded into riots, but there are other examples - the Bolivian riots over water prices last year and this February, the riots in Ecuador over the rise in cooking gas prices imposed by the World Bank. You'd almost get the impression that the riot is written into the plan.

<SNIP>

http://www.gregpalast.com/the-globalizer-who-came-in-from-the-cold/

Sun, 01/30/2011 - 22:17 | Link to Comment Hephasteus
Hephasteus's picture

Good read. Good read.

Sun, 01/30/2011 - 23:07 | Link to Comment snowball777
snowball777's picture

Too bad Lenihan and Cowen didn't.

Mon, 01/31/2011 - 06:34 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

 

joe's not bad, for a nobel laureate

Mon, 01/31/2011 - 06:14 | Link to Comment Hephasteus
Hephasteus's picture

Ok. I been thinking over the gameplan and IMF likes to stir up trouble.

It looks they like to

A. Make people poor

B. Piss them off

C. Make them fight government to survive.

D. Make participants in government hate those they govern.

E. Increase cruelty and force as means of control.

F. Try to maintain illusions and confusions about what is going on as they slowly iterate through the hardening of governing and force portions of the society.

G. Train government to quickly and cruely take action at any sign of revolt.

These motherfuckers just absolutely postively have to go.

Sun, 01/30/2011 - 21:46 | Link to Comment gigeze787
gigeze787's picture

The Twin Laws of 'Unintended Consequences' and 'Be Careful What You Preach About' by Moralizing, Dumb-F-ing US Politicians: http://www.ned.org/george-w-bush/remarks-by-president-george-w-bush-at-the-20th-anniversary G.W. Bush, Nov 6, 2003: "...Many Middle Eastern governments now understand that military dictatorship and theocratic rule are a straight, smooth highway to nowhere. But some governments still cling to the old habits of central control. There are governments that still fear and repress independent thought and creativity, and private enterprise... Instead of dwelling on past wrongs and blaming others, governments in the Middle East need to confront real problems, and serve the true interests of their nations. The good and capable people of the Middle East all deserve responsible leadership. For too long, many people in that region have been victims and subjects -- they deserve to be active citizens.

Governments across the Middle East and North Africa are beginning to see the need for change.... The great and proud nation of Egypt has shown the way toward peace in the Middle East, and now should show the way toward democracy in the Middle East. (Applause.) Champions of democracy in the region understand that democracy is not perfect, it is not the path to utopia, but it's the only path to national success and dignity."

Sun, 01/30/2011 - 22:09 | Link to Comment sellstop
sellstop's picture

Brodix, well said....

gh

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