Stagflation 2011: Why It Is Here And Why It Is Going To Be Very Painful

Are you ready for an economy that has high inflation and high unemployment at the same time? Well, welcome to “Stagflation 2011”.  Stagflation exists when inflation and unemployment are both at high levels at the same time.  Of course we all know about the high unemployment situation already.  Gallup’s daily tracking poll says that the U.S. unemployment rate has been hovering around 10 percent all year so far.  But now thanks to rapidly rising food prices and the exploding price of oil, rampant inflation is being added to the equation.  Normally inflation is a sign of increased economic activity, but when the basic commodities that we depend on to run our economy (such as oil) go up in price it actually causes a slowdown in economy activity.  When the price of oil goes up high enough, it fundamentally changes the behavior of individuals and businesses.  Suddenly certain types of economic activities that were feasible when oil was very cheap are not profitable any longer.  When the price of oil rises to a new level and it stays there, essentially what is happening is that more “blood” is being drained out of our economy.  Our economy will continue to function when there are higher oil prices, it will just be a lot more sluggish.

In some way, shape or form the price of oil factors into the production of most of our goods and services and it also factors into the transportation of most of our goods and services.  A significant rise in the price of oil changes the economic equation for almost every business in the United States.

Today, the price of WTI crude soared past 100 dollars a barrel before closing at $98.10.  The price of Brent crude increased 5.3 percent to $111.25.  The protests in Libya are certainly causing a lot of the price activity that we have seen over the past few days, but the truth is that oil has been going up for a number of months.  Right now we are only seeing an acceleration of the long-term trend.

Things are likely to get far worse if the “day of rage” planned for Saudi Arabia next month turns into a full-blown revolution.  Up to this point, the revolutions that have been sweeping the Middle East have been organized largely on Facebook, and now there are calls all over Facebook for the “Saudi revolution” to start on March 20th.

That date is less than 4 weeks away.  If Saudi Arabia plunges into chaos, the price of oil is going to go through the roof.

A rapidly rising price for oil is really bad news for the U.S. economy, because it is going to mean lots of inflation.  Unfortunately, this also comes at a time when the economy is also feeling the inflationary effects of more quantitative easing by the Federal Reserve.

So if rising oil prices are going to cause more inflation and if rising oil prices are also going to cause our economy to become even more sluggish, what does all of that add up to?

It adds up to stagflation.

Wikipedia defines stagflation in the following manner….

In economics, stagflation is the situation when both the inflation rate and the unemployment rate are persistently high.

This is going to rapidly become the “new normal” for America.  High oil prices are going to cause the cost of just about everything to go up, and high oil prices are also going to cause the economy to slow down thus making the unemployment numbers even worse.

It is going to be just like the 1970s all over again.

Only worse.

Economists differ as to how much rising oil prices affect U.S. GDP, but almost all of them agree that rising oil prices do cause a decline in U.S. GDP at least to some extent.

If American families have to spend $10 or $20 more each time they visit a gas station, that means that they are going to have less discretionary income.  They won’t be able to spend as much at the stores.

Not only that, but since the price of oil affects the price of almost everything else, Americans will find that their dollars have reduced purchasing power.

An oil crisis would force American families to stretch their already overburdened budgets even farther.

So where is the price of gasoline going from here?  Well, the average price of gasoline in the United States is rapidly sneaking up on the $3.20 a gallon mark.  Almost everyone believes that it is going to be going significantly higher.

Tom Kloza, the chief analyst for the Oil Price Information Service, was recently quoted in USA Today as saying that he believes that the average price for gasoline in the United States will reach somewhere between $3.50 and $3.75 a gallon by April.

As I wrote about yesterday, there are other analysts that believe that we are going to see $4.00 gasoline in the United States by the end of the year, and there are some that believe that we could see $5.00 gasoline if revolution sweeps Saudi Arabia.

If gasoline becomes that expensive and it stays there for a while, it is going to seriously start affecting the behavior of American businesses and American consumers.

Just remember what happened back in 2008.  Andrew Busch of BMO Capital Markets recently told CNBC the following….

“Remember when oil was last at $140 (a barrel), Americans reacted and cut the amount of miles they drove.”

Can you imagine what it would do to the economy if millions of Americans start sitting in their homes instead of doing their normal amounts of driving and flying?

In addition, one of the biggest problems with a higher price for oil is that it would cause our trade deficit to explode.  According to the U.S. government, more than half of the oil that we use is imported.  So every month we send the rest of the world billions and billions of our dollars and they send us massive amounts of oil.  We rapidly consume all of the oil they send us and we continually need more.  So we keep sending larger and larger amounts of money overseas and they keep sending us larger amounts of oil.  In the process, our national wealth is being drained at an astounding rate.  It is one of the greatest transfers of wealth the world has ever seen.

When the price of oil rises substantially, the transfer of wealth accelerates.  This is a very bad thing for the U.S. economy.  For example, when oil prices were above $100 a barrel back in 2008 our trade deficit for the year was almost 700 billion dollars.

It would be great if the Middle East would settle down and oil prices would start declining because that would really help out the U.S. economy.  Unfortunately, it does not look like that is going to happen.  Instead, it appears that we are steamrolling directly towards stagflation.  Anyone that lived through the stagflation of the 1970s knows that it is not a lot of fun.

The cold, hard reality of the matter is that without cheap oil our lifestyles are going to change.  Our economy was not set up to run on expensive oil.  If oil moves well above $100 a barrel and it stays there it is going to bring about significant societal changes.

For the rest of 2011, the price of oil will be the number one economic indicator to watch.  If it gets too high it is going to be an absolute disaster for the U.S. economy.

5 Dollar Gas? Get Ready To Pay An Arm And A Leg For Gasoline

One of the quickest ways to bring down the U.S. economy would be to dramatically increase the price of oil. Oil is the lifeblood of our economic system. Without it, our entire economy would come to a grinding halt. Almost every type of economic activity in this country depends on oil, and even a small rise in the price of oil can have a dramatic impact on economic growth.  That is why so many economists are incredibly alarmed about what is happening in the Middle East right now.  The revolution in Libya caused the price of WTI crude to soar more than 7 dollars on Tuesday alone.  It closed at $93.57 on Tuesday and Brent crude actually hit $108.57 a barrel before settling back to $105.78 at the end of the day.  Some analysts are warning that we could even see 5 dollar gas in the United States by the end of the year if rioting spreads to other oil producing nations such as Saudi Arabia.  With the Middle East in such a state of chaos right now it is hard to know exactly what is going to happen, but almost everyone agrees that if oil prices continue to rise at a rapid pace over the next several months it is going to have a devastating impact on economic growth all over the globe.

Right now the eyes of the world are on Libya.  Libya is the 17th largest oil producer on the globe and it has the biggest proven oil reserves on the continent of Africa.

Libya only produces 2 percent of the oil in the world, but with global supplies so tight at the moment even a minor production disruption can have a dramatic impact on the price of oil.

Before this crisis, Libya was producing approximately 1.6 million barrels of oil per day.  Now the rest of the world is wondering what may happen if revolution spreads to other major oil producing nations such as Kuwait (2.5 million barrels of oil per day) or Saudi Arabia.

Saudi Arabia produces 8.4 million barrels of oil a day.  It produces more oil than anyone else in OPEC.

If revolution strikes in Saudi Arabia and a major production disruption happens it could be catastrophic for the global economy.

David Rosenberg, the chief economist at Gluskin Sheff & Associates, is warning that if there is major civil unrest in Saudi Arabia we could end up seeing oil go up to $200 a barrel….

“If Libya can spark a $10-a-barrel response, imagine what a similar uprising in Saudi Arabia could unleash. Do the math: we’d be talking about $200 oil.”

200 dollar oil?

Don’t laugh – it could happen.

In fact, if it does happen the global economy would probably go into cardiac arrest.

The truth is that if the flow of oil from Saudi Arabia gets disrupted there is not enough spare capacity from the rest of the globe to make up for it.

Paul Horsnell, the head of oil research at Barclays Capital, recently said that the world does not currently have enough spare capacity to be able to guarantee that an oil “price shock” will not happen….

“The world has only 4.5m barrels-per-day (bpd) of spare capacity, which is not comfortable.”

Horsnell also said that even in the midst of potential supply problems, the global demand for oil continues to grow at a very robust pace….

“In just two years, the world has grown so fast as to consume additional volume equal to the output of Iraq and Kuwait combined.”

For now, Saudi officials are saying all the right things.  They say that there will be no revolution in Saudi Arabia and that there are not going to be any supply problems.

For example, Saudi Arabian Oil Minister Ali al-Naimi recently announced that the rest of the world should not worry because his country is definitely going to be able to make up for any shortage in the global supply of oil….

“What I would like you to convey to the market: right now there is absolutely no shortage of supply.”

But what happens if revolution comes to Saudi Arabia?

Suddenly the whole game would change.

But even with a peaceful Saudi Arabia the price of gasoline in the United States is already rising to alarming levels.

The average price of gasoline in the United States reached $3.14 a gallon last week.  This closely mirrors what happened back in 2008.  Three years ago at this time the average price of gasoline was right around $3.13 a gallon.

Let’s certainly hope that we don’t see a repeat of what happened to oil prices back in mid-2008.  The price of oil reached an all-time record of $147 a barrel and gas prices in the United States absolutely skyrocketed.

So how high will the price of gas in the U.S. go in 2011?

We haven’t even come close to 4 dollar gas yet, but a large number of analysts believe that it is coming this summer.

Is there even a possibility that we could see 5 dollar gas in America at some point in the next couple of years?

Well, there are some in the oil industry that are convinced that it could actually happen.  Just consider the following quotes….

Darin Newsom, senior analyst at energy tracker DTN….

“If this thing escalates and there’s a good chance that there’d be a shift in supplies, $5 gas isn’t out of the question.”

Peter Beutel, president of energy adviser Cameron Hanover….

“If you are looking at the disruption of movement and production in countries such as Saudi Arabia and the UAE, you’re easily talking $5 gas.”

John Hofmeister, the former president of Shell Oil, on his belief that we could see 5 dollar gas by 2012….

“I’m predicting actually the worst outcome over the next two years which takes us to 2012 with higher gasoline prices.”

So why is everyone so concerned about gas prices?

Well, because it affects the price of almost everything else in the economy.

David Wyss, the chief economist at Standard & Poor’s, says that every extra dollar that is spent on gasoline is a dollar that will not be spent somewhere else….

“The money that you spend filling up your car is money you don’t have to spend at the shopping mall.”

Not only that, but when gasoline costs more it has a negative effect on economic growth.  Almost all economic activities involve the use of oil in one form or another.  When the price of oil starts getting really high it motivates people to start cutting back on many of those activities.

The truth is that our whole economic system is based on the ability to use massive amounts of very cheap oil.  Now that the price of oil is rapidly rising again, many economists are becoming very alarmed.

Nobuo Tanaka, the Executive Director of the International Energy Agency, recently told CNBC that his organization is extremely concerned about what high oil prices could do to the global economy….

“That is our concern, regardless of the margins of disruption, if the $100 per barrel of oil is continued in 2011, the burden of oil to the global economy is as bad as 2008.”

So what was so bad about 2008?  Well, the price of oil soared to $147 a barrel in mid-2008 and this was a huge factor in the financial collapse that happened a few months later.  Now oil prices are returning to levels that we have not seen since 2008….

So if the price of oil breaks the all-time record this year will we see another global financial crisis?

It is hard to say.  But what almost everyone agrees on is that it will not be good for the global economy at all.

In addition, a higher price for oil will also have a huge impact on the trade deficit.  Because oil prices were at such a high level back in 2008, oil imports actually made up almost 50 percent of the U.S. trade deficit that year.

In 2010, the U.S. trade deficit was just a whisker under $500 billion.  If the price of oil gets up to 140 or 150 dollars a barrel we could easily see the U.S. trade deficit explode to 700 or 800 billion dollars in 2011.

That would be really, really bad for the U.S. economy.

So where are oil prices going next?

Well, if you could predict that with 100 percent certainty you could make a whole lot of money.  Nobody knows for sure.

But almost everyone believes that the price of oil is going to go up.  In fact, a lot number of investors have been making some very large bets that the price of oil is going to go up very significantly this year.

Recently, large numbers of investors have been betting that the price of oil will rise to $125 a barrel by May.  Shockingly, some investors have even been betting that the price of oil will rise to $250 a barrel by next December.

Let us hope that the price of oil does not rise that rapidly, but as the past couple of months have demonstrated, the world is becoming a very unstable place.   Just about anything is possible at this point.

If the price of oil rises significantly above $100 a barrel and it stays there for an extended period of time, it is going to be absolutely devastating for the U.S. economy.

So what do you all think is going to happen to the price of oil in 2011?  Please feel free to leave a comment with your thoughts below….

Shortages! Is The World Really Running Out Of Food, Water And Oil?

Everywhere you look today the mainstream news is talking about shortages. Authorities all over the globe are boldly proclaiming that the world is rapidly running out of food, water and oil. So are these doomsayers right? Well, it must be noted that some of the most famous “prophets of doom” of the past several decades have seen their predictions fail spectacularly. For example, in his infamous 1968 book entitled “The Population Bomb“, Paul Ehrlich made the following statement: “I don’t see how India could possibly feed two hundred million more people by 1980.”  Well, India is now feeding well over twice the number of people than they had when Ehrlich originally wrote his book.  But that doesn’t mean that major shortages won’t happen in the future.  It just means that we should be careful not to look incredibly ridiculous like Ehrlich did.  The truth is that there are good reasons why we should be watching global supplies of food, water and oil very closely.  Life as we know it would cease to exist if we had severe shortages of any of them.

So will we actually be facing serious shortages of food, water or oil in the coming years?

Well, let’s take a look at oil first.

Oil Shortage?

Right now oil is absolutely essential to almost everything that we do.  We require oil to drive our cars, we require oil to produce our food, a large percentage of our homes use energy that is derived from oil and most of what we buy at the stores comes in packaging that is made up at least partly of oil.

So if we run out of oil that is going to be a really huge deal.

So are we going to run out of oil?

Well, right now advocates of the “peak oil” hypothesis are getting a lot of attention in the mainstream media.

Basically the idea behind “peak oil” is that the world has reached (or almost reached) the maximum amount of oil that it can produce and that from here on out the amount of oil that will be produced will begin to decline.  Meanwhile, the demand for oil is only going to continue to increase.

So is there evidence that this is actually happening?

Well, it depends on who you ask.  But what is undeniable is that there are some very powerful interests that are doing their best to hype a coming oil shortage.

In recently released report entitled “Signals & Signposts“, Shell Oil warns that global demand for energy is going to be three times as large in 2050 as it was in 2000.

So where will all of that extra energy come from?

Can the world possibly produce two or three times as much oil as it does today?

The Shell Oil report forecasts that the global supply of oil will continue to rise but that the rise in supply will not be fast enough to keep up with the rise in demand.  According to Shell, this is going to cause rapidly rising oil prices which will cause the gross domestic products of all nations to fall.

So just how high could oil prices go?

Well, the truth is that the price of oil is very highly manipulated.  The market for oil is not exactly what you would call a “free market”.

However, it is alarming that almost everyone is forecasting much higher oil prices at this point.

For example, Weeden & Co. oil analyst Charles Maxwell recently stated that he believes that the price of oil will eventually hit $300 a barrel by the end of this decade.

If that were to happen, it would be absolutely disastrous for the global economy.  Yeah, those in the oil industry would make a killing, but for the rest of the world it would be a complete and utter nightmare.

Unfortunately, what most Americans don’t understand is that there are lots of alternative energy technologies out there that have been repressed by the big oil companies and by the big oil producing nations because they threaten hundreds of billions of dollars in profits.

For example, did you know that it is possible to run a car entirely on water?  One Japanese company hopes to start mass marketing them….

But I wouldn’t count on seeing water-powered cars sold on every street corner any time soon.

Why?

Because of greed.

Our entire system of energy is based on making as much money as possible for those who have all the oil.

So if the world has a shortage of energy in the coming years, it is not because that is how it inevitably had to be.

Rather, it will be all about pure, unadulterated greed.

There are plenty of alternative energy technologies out there that are incredibly promising, but those that are getting incredibly wealthy off of our oil-based society are not going to quietly step aside for the good of mankind.

Food Shortage?

So what about food?

Is the world running out of food?

Well, as we have seen so many times in the past, the earth can support far more people than most of the “experts” ever imagined.

In fact, if weather patterns were perfectly stable and we removed human greed out of the picture, the earth could most likely support a whole lot more people.

Unfortunately, weather patterns are becoming increasingly bizarre and human greed is always a problem.

In particular, this year extreme weather all over the globe is causing many to be concerned that we may soon see some very serious food shortages.  In Australia and Brazil, flooding of Biblical proportions has absolutely devastated crops.  Some of China’s most important agricultural areas are experiencing the worst droughts that they have seen in 200 years.  Authorities are warning that two-thirds of China’s wheat crop could be in danger.  A recent cold snap that hit northern Mexico wiped out entire harvests and has sent prices for many fresh produce items in the United States soaring.

But these bizarre weather patterns will hopefully settle down eventually.

What is of even greater concern is that we have been seeing a long-term trend of rapidly rising food prices over the last couple of years that is putting an extreme amount of strain on the 3 billion people in the world that are trying to survive on the equivalent of 2 dollars or less per day.

Most Americans can still handle rising food prices, but for millions upon millions of poor people all over the world a significant increase in the cost of food can mean the difference between life and death.

That is why the sudden rise in price of so many agricultural commodities is so disturbing.  Just consider some of the shocking price increases that we have seen over the past year or two….

*The price of corn has doubled over the last six months and recently hit a new all-time high.

*The price of wheat has more than doubled over the past year and hit a 30-month high on Monday.

*The price of soybeans is up about 50% since last June.

*The price of cotton has more than doubled over the past year.

*The commodity price of orange juice has doubled since 2009.

*The price of sugar is the highest it has been in 30 years.

If prices continue to go up like this we are going to see a lot more food riots all over the globe.

But perhaps that is what those in positions of power actually want.  The truth is that the global elite don’t always have the best interests of the rest of us at heart.

Water Shortage?

So what about water?

Is the world running out of water?

Well, yes, many areas of the world are rapidly running out of fresh water and this is perhaps one of the biggest problems we are facing.

Without oil, most of us could survive for quite some time.

Without food, most of us could survive for a number of weeks.

Without water, most of us would die within a matter of days.

Fortunately North America still has a decent supply of fresh water, but as I have written about previously, in many areas of the globe the situation is quickly becoming absolutely dire….

*Worldwide demand for fresh water tripled during the last century, and is now doubling every 21 years.

*According to USAID, one-third of all humans will face severe or chronic water shortages by the year 2025.

*Of the 60 million people added to the world’s cities every year, the vast majority of them live in impoverished slums and shanty-towns with no sanitation facilities whatsoever.

*It is estimated that 75 percent of India’s surface water is now contaminated by human and agricultural waste.

*Not only that, but according to a UN study on sanitation, far more people in India have access to a mobile phone than to a toilet.

*In northern China, the water table is dropping one meter per year due to overpumping.

*But there are few places where the water shortage is as severe as it is in the Middle East.  Saudi Arabia had been producing enough wheat to be self-sufficient for most of the past 30 years, but in 2008 authorities there realized that the non-replenishable aquifer they had been pumping for irrigation purposes was nearly depleted.  So in response Saudi Arabia made the decision to reduce their wheat harvest by one-eighth every year thereafter.  Wheat production in Saudi Arabia is scheduled to cease entirely in 2016.

In some of the most populated areas of the planet the water situation can only be described as catastrophic.

For example, did you know that a new desert the size of Rhode Island is created in China because of drought every single year?

Did you know that in China 80% of the major rivers are so polluted that they don’t support aquatic life at all?

Did you know that the women of South Africa collectively walk the equivalent distance to the moon and back 16 times a day for water?

Thankfully the water situation in the United States has not gotten that bad yet, but the truth is that even we could be facing serious water shortages in the years ahead.

According to a recent report released by the Natural Resources Defense Council, more than one-third of all counties in the lower 48 states will likely be facing very serious water shortages by the year 2050.

So, yes, there are some really good reasons to be concerned about earth’s dwindling resources.

If the global elite were not so incredibly greedy and if we managed our planet better we would not have problems to this degree.

But here we are.

So what is the solution?

Well, it would be really great if the global elite would just share some of their wealth.  A study by the World Institute for Development Economics Research discovered that the bottom half of the world population owns approximately 1 percent of all global wealth.

But the global elite aren’t about to change the rules of the global economy.  After all, they spent a whole lot of time and effort rigging the game so that virtually all wealth eventually gets funneled into their hands.

Rather, most among the global elite seem to believe that radical population control is the answer.

After all, they argue, if there are half as many people around then we will only be using half as many resources, right?

Well, as alluring as that may sound, the truth is that the world has always had a huge problem with poverty.  Even when the global population was down around 100 million people there was rampant poverty.

The number of people is not the problem.

The problem is the insatiable greed of the elite.

The global elite have systematically exploited the poor all over the planet, they have gobbled up the resources of the world wherever they have found them and now they are hoarding their wealth as millions upon millions suffer desperately.

Well, in the end the global elite will have to answer to a higher power.  In the book of James it talks about those who hoard wealth on this earth….

Now listen, you rich people, weep and wail because of the misery that is coming on you. Your wealth has rotted, and moths have eaten your clothes. Your gold and silver are corroded. Their corrosion will testify against you and eat your flesh like fire. You have hoarded wealth in the last days. Look! The wages you failed to pay the workers who mowed your fields are crying out against you. The cries of the harvesters have reached the ears of the Lord Almighty.

According to the most recent “Global Wealth Report” by Credit Suisse, the wealthiest 0.5% control over 35% of the wealth of the world.

That qualifies as hoarding wealth.

Other estimates put the concentration of wealth at the very top of the food chain much higher than that.

But sadly, the problem of greed is not going to be solved any time soon.

Global supplies of food and fresh water are going to continue to diminish.

The world economy is going to continue to become increasingly unstable.

If it was always your desire to live in “interesting times”, then you are about to get your wish.  Things are about to get extremely “interesting” on this planet.

So what do you think?  Do you believe that the world will be facing shortages of food, water and oil in the years ahead?  Feel free to leave a comment with your opinion below….

The Riots In Egypt And The Price Of Oil

As if the world economy did not have enough problems already, now the riots in Egypt threaten to send the price of oil soaring into the stratosphere.  On Friday, the price of U.S. crude soared 4 percent.  A 4 percent rise in a single day is pretty staggering.  The price of Brent crude in London closed just under the magic $100 a barrel mark at $99.42.  The incredibly violent riots in Egypt have financial markets all over the globe on edge right now.  Any time there is violence or war in the Middle East it has a dramatic impact on financial markets, but this time things seem even more serious than usual.  Many believe that we could see an entirely new Egyptian government emerge out of this crisis, and the uncertainty that would bring would make investors all around the globe nervous.  Financial markets like predictability, peace and security.  If Egyptian President Hosni Mubarak’s 30 year reign is brought to an end, it will severely shake up the entire region, and that will not be good news for the global economy.

Have you seen how violent these protests have become?  Cars and buildings are on fire all over the place.  Even the headquarters of Hosni Mubarak’s political party was burned down.  The Egyptian military has been deployed on the streets of Cairo.  Protesters have been showering government forces with stones, firebombs and anything else that they can find to throw.  Security forces have been using rubber bullets, water cannons and tear gas to try to disperse the protesters but those efforts seem to be doing little good.  Deaths and injuries are being reported all over the place.  There are even rumors that the wife and son of Hosni Mubarak have already left the country.

At this point, Mubarak has gone on national television and has announced that he has asked his cabinet to resign.  That is an absolutely stunning move, but it is doubtful that the protesters will be satisfied.  All over Cairo protesters continue to chant for Mubarak to resign.

The following is a short compilation of some raw video from the riots in Egypt….

These riots in Egypt come on the heels of violent uprisings in Algeria and Tunisia.  In fact, it seems like virtually the entire Middle East is in a very foul mood right now.  Riots have been reported in Lebanon, in Jordan and in Yemen over the past few days.

Some of the rioting has been motivated by economic factors, but unfortunately all of this rioting is only going to make the global economic situation even worse.  Concern over all of these riots is driving up the price of oil and driving up the prices of agricultural commodities.  These higher prices are going to make it even harder for the poor people in the Middle East to afford food.

But also it must be acknowledged that much of this rioting is being done for very deep political and religious reasons as well.  Many westerners are cheering the protests in Egypt because they envision the protesters to be some sort of “freedom fighters”.  But the vast majority of these protesters do not desire “American-style democracy”.  The Muslim Brotherhood is one of the groups at the heart of these protests.  The government that they intend to set up would not give “liberty and freedom for all”.  Rather, it would be a hardline Islamic government based on Shariah law.  According to Wikipedia, the Muslim Brotherhood bills itself as the “world’s most influential Islamist movement”, and their goal is to impose their version of Islam on society….

The Brotherhood’s stated goal is to instill the Qur’an and Sunnah as the “sole reference point for … ordering the life of the Muslim family, individual, community … and state”

So unless your version of “freedom” includes being forced to live like the Taliban, then you probably would not enjoy the “liberty” that the Muslim Brotherhood wishes to impose on you.

Coptic Christians all over Egypt are already being slaughtered even with a relatively pro-western president in power.  On New Year’s Day, an attack on a Coptic Christian church in Egypt killed 21 people.  The following is how one eyewitness described the scene to a reporter from the New York Times….

“There were bodies on the streets,” said Sherif Ibrahim, who saw the blast’s aftermath. “Hands, legs, stomachs. Girls, women and men.”

Once a radical Islamic government is installed in Egypt it will be open season on all Christians.

Yes, there is a whole lot of blame to be passed around to other nations, organizations and individuals in the Middle East for things they have done as well, but that does not excuse the horrific persecution of the Coptic Christians in Egypt.

We have to call a spade a spade.  We cannot condemn some forms of tyranny and persecution and then make excuses for other forms of tyranny and persecution just because those doing it are on “our side”.

Replacing one form of tyranny (Mubarak) with an even more repressive form of tyranny (The Muslim Brotherhood) is not something that those who love liberty and freedom should be celebrating.

In any event, everyone should be able to agree that these events are going to severely rattle world financial markets that were already very nervous about 2011.

If these violent riots in Egypt and other countries in the Middle East keep going on, the global price of oil and the global price of food will continue to soar.

Not that oil and food were not going to be heading in that direction anyway.  Yesterday I wrote about the warning signs for the global economy that we are starting to see.  Wheat and corn have absolutely skyrocketed in price over the past 6 months.  The UN had already been projecting that we would see a 30 percent increase in the global price of food in 2011 even before these riots.

If you add rampant political instability into the mix, there is no telling how bad food inflation could get this year.

Many experts have already been forecasting substantial food shortages throughout the world this year based on all the extreme weather we have been having.  So what is going to happen if something causes those food shortages to be even worse than anticipated?

We live in very interesting times my friends.  The globe is becoming an increasingly unstable place.  Even nations that seemed perfectly stable just a few months ago can erupt in rioting at almost any moment.

People around the world are getting angry.  Thanks to the Internet, people are able to circumvent official government propaganda more easily than ever before.  This is making it harder and harder for governments to control people.

Egypt tried to regain some of that control during the riots by shutting down cell phones and by shutting down the Internet but it did not work.

Let’s just hope that Egypt can soon find peace and that the changes that are made in the Egyptian government are good for freedom and liberty.

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