In Egypt they are calling it a day of rage as discontent rages across North Africa and the Middle East. Discontent that is being driven due in part by poor economic conditions, soaring food prices, lack of freedom and government reform. This outpouring of rage began over the Martin Luther King Jr. holiday weekend as protesters overturned the government in Tunisia. Now with the success of the ouster of Tunisian President Zine al-Abidine Ben Ali, hungry, frustrated people are rising up against tyranny and high food prices. When food prices go up and people get hungry, they get cranky are ready to topple governments.
This is not being lost on Tunisia's neighbors. Algeria, Tunisia's neighbor to the north, watched the unfolding events with abhorrence and quickly moved to the market place, dipping into the government coffers to buy massive amounts of grain. Algeria purchased 600,000 metric tons of wheat in a desperate attempt to cool food prices and hot tempers. It's clear that governments will sell gold in favor of food because you cannot feed your people gold and its better you spend it on food or see how much you can fit into your suitcase before you flee the country. Egypt, the world largest wheat importer, apparently did not buy enough. Egypt's poverty and repressive government, not to mention a new government in Tunisia, has given hope to the hungry masses that change is possible. Now you can't say that Egypt wasn't warned. While Egypt has been a staunch ally of the United States, President Bush scolded Hosni Mubarak about the lack of freedom in his country. He warned that it would come to no good. Now as Egypt cuts off the internet, the best tool of free speech, the world now prepares for an event that may change the face of the Middle East forever. Other leaders across the Middle East and North Africa are sweating this out and preparing to buy more food to try to keep prices down. US friends and foes are at risk, particularly our staunch ally King Abdullah the second of Jordan. Jordan bought 150,000 metric tons of wheat yesterday and is in the market for more. The outcome of the events in Egypt will be on his mind. King Abdullah has promised reforms in government and has opened the door for more freedom yet it may be too little too late. The mood of the people may be best expressed by a Jordanian that spoke to the AP who said, The government buys cars and spends lavishly on its parties and travel, while many Jordanians are jobless or can barely put food on their tables to feed their hungry children. Other countries are taking drastic steps to get their hands on food to keep prices down. Bloomberg News reported that Bangladesh, South Asia's biggest rice buyer, doubled its import target for this year to cool domestic prices that surged to a record in December as consumers and farmers hoarded supplies. The import target was raised to 1.2 million metric tons for the year ending June 30, from 600,000 tons set in November. That's triple the U.S. Department of Agriculture's estimate of 400,000 tons. The reason for the increase is panic-buying, Hasan said in a phone interview from Dhaka yesterday. There's a sense of insecurity among the public. People who usually need 10 kilos buy more than 20 kilos. When farmers need to sell, they withhold their stocks expecting a windfall as prices advance, he said. Libya is also worried. Not only did they buy 100,000 tons of wheat they set up a 24 billon dollar fund that will focus on providing housing to cool home prices and find shelter for its growing population. For oil the market is taking a wait and sees approach to these events. Obviously change can be good or it may end up being bad. If militant governments unfriendly to the U.S. take over then it may become a nightmare. Yet if true democracy takes hold it could be a God send to the world. If democracy takes hold in these countries in this part of the world, it will be a major victory on the war on terror. Terror is born of ignorance and repression and freedom for all is the best weapon we have in this on-going battle. The calls for $100.00 barrel oil have been silenced for the moment. Now the market is wondering if we can hold $85.00. The global dynamic for oil is changing as well as Brent crude trading at a record premium over West Texas Intermediate widening to a record $11.86 a barrel. As Asia grows as fast as supply at Cushing Oklahoma it seems WTI is in the back seat. Record cold in Europe as well as North Sea production problems are exasperating the situation. May sure you are getting the best in business news on the Fox Business Network where yu can see me every day! Also sign up for a trial to my trade levels for options and all the major commodities. Just call me at 800-935-6487 or email me at firstname.lastname@example.org.
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