Will the Revolution Start in the Arab World?

I've been in a great mood and humming The Beatles, Revolution, all day today.  People have noticed and asked, "Why so happy?"

"The youth of the Arab world are finally waking up and fighting back against their oppressive systems!" I responded.  Probably not the response they were expecting.

Nothing warms the heart more than seeing fleeing politicians.  Politicians, after all, are by definition criminals.  Perhaps not by the laws they create but by natural law - the only law that matters.  All politicians use violence (force or coercion) to make others do as they want.  They smile and kiss babies and shake hands while they do it but they are no different than your local mafia.  In fact, they are worse, because the mafia does not attempt to lie and make you believe that they are doing it "for the greater good".

Looking back, I remember when the internet came out and first started to catch on in 1994.  I remember saying, "this will end all wars and oppression!".  I had already become disheartened by 1996.  The people did not seem to be using the internet to educate and free themselves.

Well, it may just be that it took longer than I expected for it to catch on.  Today, in 2011, many of these uprisings appear to have been driven by the internet.  First, as many of the people controlled under these very oppressive regimes use it to learn about the true nature of their governments and secondly, use sites such as Facebook and Twitter to organize themselves.

Those in the US, UK and Europe should be paying very close attention to places such as Egypt this week.  Why?  Because what is going on there will soon be happening closer to home.  Take particular note of the Egyptian Government's move to block the ENTIRE internet on the evening of January 27.  This is something we have warned gravely about in this space.

Barack Obama and many other US members of Congress have been lobbying heavily for an "internet kill switch".  They say it is to protect the country from attack.  Keep in mind that in their mind the "country" is them and the attack will be from "the people".  I have no doubt that if things were ever to begin to get out of control in the US in challenging of the dominance of the US Federal Government that they would attempt to do the same thing.

It is the same reason the US Government is trying to use the killing of a Congresswoman in Arizona to put in more gun regulation.  It isn't to protect the people.  It is to protect them!

Here at The Dollar Vigilante we cover every aspect of the ongoing collapse of the western fiat currency monetary system or, as we call it, TEOTMSAWKI (The End Of The Monetary System As We Know It).  However, as anyone knows, it is virtually impossible to predict exactly how the collapse will occur.  We never thought that the collapse would be started in the Arab world but with the fall of the Tunisian Government, the impending fall of the Egyptian Government and unrest and/or rallies now being scheduled in Tunisia, Albania, Algeria, Yemen, Egypt and the Kingdom of Jordan, who knows, perhaps the first major domino happens in the Middle East.

If so, the real key will be the American stronghold in Saudi Arabia.  This is where much of the US' power in the Middle East is centered and if we are going to see an end to the US Government's power in this region it will have to happen there.

Some who haven't connected the dots may ask, "How does the overthrow of dictatorships in the Middle East have anything to do with the collapse of the US dollar or the US Government?"

The politics and background of each of these countries are all unique and all have their own nuances so it isn't easy to say exactly how this could be the real first straw in the debt default and/or collapse of the US dollar.

But here is one plausible scenario.  As any of the thousands of young Arabs throwing rocks will tell you the US Government has used their fiat US dollar to control this entire region for decades.  The US Government, through the CIA in most cases, has killed or overthrown almost any unfriendly government in the region.  Just ask Saddam Hussein.

And so, if the US loses control of this region and the region, in effect, finally declares some sort of independence it will mean big changes to, as Barack Obama always likes to say, the "status quo".

Not all of these states are tied to oil.  Jordan has virtually no oil and Egypt's reserves have withered to the point where they are barely an exporter.  That is why Saudi Arabia is crucial to this.  If many of the neighboring Arab states begin to see massive social uprisings and governments are overthrown it could lead to the same thing happening in Saudi Arabia.

It has been obvious for decades that the US Government uses their power to help keep the regime in Saudi Arabia in power in return for the Saudi Regime rolling over most of their profits from oil sales back into the US in Treasury Bond purchases.  But if the Saudi government is overthrown this whole "oil for Treasuries" agreement may go out the window.

And it couldn't come at a worse time for the US Government.  The Federal Reserve has already had to step in and buy, virtually, all new Treasury issuances of the US Government (they already are the largest holder of Treasuries - see chart below).  China has definitely appeared to have slowed Treasury purchases and Hu Jintao was greeted as a hero in Washington, DC just for allowing the US dollar to even still exist.  And so, quite possibly, having the "oil arm" of the Treasury trade kicked out may be the beginning of TEOTMSAWKI.

Any further significant loss of demand for Treasuries would have one of two results:

1. The US Government would have to default on its debt bringing about countless numbers of potential results including, almost certainly, the loss of the US dollar as the reserve currency of the world and direct, serious impacts to the more than 150 million Americans who are dependent on the US Government for their incomes.  It is anyone's guess what happens then but the sky is the limit.  War.  Famines in the US (As Americans are thrown into abject poverty and the US dollar's value plummets due to all of the above and food becomes too expensive and/or dollars aren't even accepted internationally).  Virtually anything can happen - many of them not good in the short term.

2. The Federal Reserve enters the dollar into hyperinflation as it continues to buy up ALL Treasury issues into perpetuity until the rest of the world flatly just stops accepting dollars and the US dollar becomes worthless.

However, how all this plays out still remains to be seen.  There are an infinite number of variables at play.  But we can state one thing with confidence: The impending major changes to the political and financial world certainly all appear to now be well in motion.  The European Union is on the verge of collapse.  The Arab world appears to also be on the verge of significant change.  And as soon as the price increases of oil and food begin to hit the United State (the 's' left off intentionally) we may finally see the great American masses rise up and remove the shackles put on it by the Federal Reserve and the US Federal Government.

Subscribers to The Dollar Vigilante know that we've been very clear in how to protect yourself through what is to come.  Our holdings in precious metals, energy and agriculture have been an excellent source of profits and refuge.  As well, our advice to begin to protect yourself from your own government through moving assets outside of the financial system and to diversify geographically look more prescient than ever.  And for those who live in major population centers in the western world we continue to advise expatriation or preparation to protect yourself from the upheaval to come.

Many people look at these changes going on in the world as being "scary" or "bad".  People always seem to be scared of change but this change from a repressive, war enabling, financial elite controlled world is nothing but a good thing.  The people are finally rising up, thanks to access to information from the internet, to remove their own shackles.

The transition to a new world will be volatile, and that is why it is important to prepare properly, but once this is all said and done we will look back on this as the great awakening of freedom and the amount of peace, prosperity and human innovation it has the potential to unleash will surprise even the most optimistic of us.

There is still much to be played out here.  But if this quote from a young Egyptian demonstrator is any indication, this may just be the beginning.

"I can't believe our own police, our own government would keep beating up on us like this. I've been here for hours and gassed and keep going forward, and they keep gassing us, and I will keep going forward. This is a cowardly government and it has to fall. We're going to make sure of it." - Cairo protestor Ahmad Salah, 26

However, and it should be said, this region has been a mess for centuries - mostly due to it being a geopolitical chessboard that the US, UK, French and Russian Governments have used to try to control this area.

Hopefully the young Arabs continue to use the internet to read about freedom and liberty and how governments are incompatible with that.  If not, they may find, like many of us, that one of the only things worse than a corrupt, repressive dictator is a democratically elected President.

Comments

[ralph]

Fuck yeah TDV!!! Off with their heads!!! let Freedom reign.

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