As The World Burns…
It’s amazing how the world works. I’ve been saying for years now that massive uncertainty is looming and that we’re in for some interesting world events. The crazy thing is that it’s nearly impossible to imagine what exactly that will look like. Nobody anticipated that Egyptian protests would be the possible spark, but indeed it was.
With Egypt toppled, protesters are moving on to other countries. Libya is close to falling, and now the eyes of the world will turn to places like Saudi Arabia where an effective uprising would really throw the world off – mostly due to the flow of oil to the global markets.
Commodities are already responding with crude oil closing in on $100 (Brent is already well above), gold back over $1400 and silver pushing toward the mid-30s.
Without a doubt, the rule that every government intervention into the economy will have an unintended consequence elsewhere holds fast. It’s just impossible to predict what those consequences will be.
The global government and central bank intervention in world economies has indeed started to come full circle with worldwide inflation and increasing unrest. This unrest is now even in America as Unions throw their hissy fit up in Wisconsin.
As an aside… I’m not against all Unions, but I’m definitely against Public Unions. Why? Because public unions can band together and elect leaders and affect public poilcy that has a direct influence on their compensation. It is a ridiculous conflict of interest. I recognize the good that unions have performed in the past, but these unions need to be confined to the private sector. When a union is in the private sector, that union is essentially a partner with management on the success of that company. Now in a free market, if the union is overbearing, it can potentially bring down that company. This isn’t a bad thing. It keeps unions in check in a free market manner. This has been the case as companies like General Motors have essentially “gone under” – however, the end result was avoided since the government came in and propped up the company.
If Unions are confined to the private sector, and then not bailed out in the case of a company going bankrupt, unions will be kept in check naturally without the need for political action. This should be the goal.
But, back to the world burning…. welcome to the global economic recovery Ben Bernanke style.