First, you must sell allegedly “friendly” governments lots of weapons. You know, aircraft, missiles, guns, ammunition, that sort of stuff. It helps a lot if the governments have money, and it helps even more if you can convince them to peg their currencies in some way to yours, and they have something you want (think oil.)
Next, having accomplished the currency peg and sales of arms, you then allow your banks to engage in rampant speculation and fraud. You let them counterfeit your currency with impunity by issuing credit unbacked by anything (which spends exactly the same as does currency, and thus is an effective naked short upon it), so long as they bribe Congress sufficiently with “campaign contributions.” This is all legal, of course, and where it isn’t you change the law (such as through the CFMA) so it becomes legal.
Having done that, you let your Central Bank pontificate about how “rising stock prices” are good for the economy and “animal spirits.” You intentionally fail to mention, however, that speculative price and value are not the same thing, and that said companies are drowning in debt to the point that you now need to pay $12 for $1 worth of actual underlying assets, after debt is subtracted. This, incidentally, is three times the level of speculative premium you had in 2007, just before the market blew up.
In order to support this speculative bubble (which your President is dumb enough to crow about in his “State of the Union” speech) you intentionally flood the market with “liquidity” (that’s a fancy name for “cheap loans.”) Speculators figure this game out immediately and start driving up the price of everything – not just stocks. Cotton quadruples in price. Wheat, corn, oats, copper, oil – all have a rocket strapped to their ass and lit.
Of course producers and processors of food and other items can only pass through those price increases or eat them. They can’t eat them beyond their margin and remain in business, so this starts to leak into the real economy. The currency pegs mean that most of the inflationary pressure you’re creating doesn’t hit your nation, it’s exported to others. That exactly how you like it, because you can claim “inflation expectations are well-anchored.” Perhaps they are in your nation, but in other places they’re extremely unanchored and are not only expectations, they’re realized facts as the basic cost of life spirals up out of control.
This, in turn, provokes food riots in these less-well-endowed nations that you managed to dupe into participating in your outrageous scheme.
After all, there’s only one thing worse than a hungry man.
That’s a man who used to be well-fed and now he’s both hungry and pissed, along with being unemployed.
When his belly growls loudly enough, he riots.
And so do his similarly-situated neighbors.
That’s when you find out what the balance of power really looks like between government and the people. Even in a monstrously-repressive regime such as Egypt, the fact remains that when the people have had enough, the government is fooked.
We should send our entire banking and scamming apparatus – every one of the people responsible for the bubbles and asset-stripping over the previous 20 years and all the policy wonks who have allowed and even encouraged the currency pegs and similar intentional distortions – over to Cairo on a nice Air Force airplane and turn them over to the people.
Let them hold the trial and determine what justice might dictate. Put it on pay-per-view and have the proceeds go to paying down the national debt.
We won’t, of course. We’ll claim we’re not responsible in any way. The bankers will have none of this adhere to them, including Bernanke. Congress will, for its part, duck the responsibility that it has, in that it has continually allowed the bad debt to be hidden with outrageous actions like demanding that FASB change mark-to-market, bailing out insolvent banks, bailing out Fannie and Freddie and allowing Bernanke to claim that he “would not monetize the debt” – while he was doing so, and then allow him to do so – in the open, naked, without so much as a peep or legislation (or a contempt of Congress charge) to stop him.
This unrest is likely to spread, because unrest means disruption of supply lines, which in turn means prices go even higher. The same problems that caused this load of crap to happen are being made worse by it, and yet there’s not one peep in the mainstream media nor among Congress as to what actually caused all of this to occur, or any calls for those responsible to be forced to stop it.
There’s an implicit warning in what’s going on over in Egypt today, as if this spreads through the Middle East, and it very well may, and radical elements get their hands on all the nice weapons we sold these nations under the premise of being a “friend” to America, you might want to think about what happens if the Middle East oil conduits get shut down, and whether that might create some “interesting” dynamics HERE in the United States.