-- Posted Friday, 4 February 2011 | | Source: GoldSeek.com
By James West
Watching 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.
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