In Angry Jobless Indians: Social Contracts I warned of the pending social unrest that will sweep the globe as the economic situation continues to deteriorate:“10 million unemployed you men make for a 'volatile' political environment in the world's largest, messiest democracy where an election goes well if only a few small bombs go off.
Other major export economies are in just as much trouble. In China: “The figures are horrifying.” I wrote:
“The social contract is that the government creates widespread economic prosperity. In return, the plebs won’t make trouble for the ruling patricians. They also won’t demand political liberty. Export jobs in China are disappearing as fast as in India and the social contract is about to be severely stressed.”
In Hyperinflation Then Global War I discussed the book The War of the World by Nial Ferguson:
“Ferguson develops a theory to explain the brutal violence of the 20th century. He postulates that ethnic unrest is prone to break out during periods of economic volatility and uncertainty. Severe economic distress has the tendency to suddenly unravel even advanced processes of ethnic assimilation which then rapidly escalate into full-scale conflict. The catalyst for catastrophe is always the decline of great economic and political powers and more importantly the emergence of new powers.”
Protests are popping up all over the world now. They’re small and they’re being ‘managed’. However, the global economy will continue to deteriorate and somewhere some government will fail under the stress. If the governments that fall are in an ethnically homogenous country, any transition will be fairly uneventful. If the governments that fall are in an ethnically diverse country, expect trouble.
The trade is to go long violence and short tranquility some how. Despite my deflationary stance, gold springs to mind… but not quite yet.
Gold is still making lower highs and the down trend holds. Watch the $900 level and watch the news. Real geopolitical developments will occur quickly.
FACTBOX-European governments face protests over economy: “Protests against governments and banks have increased in some European countries as the global economy has deteriorated.
Here are details of some of the protests around Europe:
* ICELAND:
-- Police used teargas against anti-government protesters when a demonstration outside parliament turned violent on Thursday.
-- The parliament building has become the focus of anger against Prime Minister Geir Haarde's coalition government's handling of the financial crisis. Demonstrators have called for the prime minister and other senior officials to resign and his limousine was pelted with eggs by demonstrators on Wednesday.
* BULGARIA:
-- Hundreds of Bulgarians demanded economic and social reforms in the face of a global slowdown on Wednesday in a second week of anti-government protests.
-- Students, teachers, green activists, doctors and public servants took part in the rally in front of parliament in Sofia, calling on the Socialist-led government to take action or step down. Many shouted "Mafia" and "Resign".
-- Last week hundreds of protesters clashed with police, smashed windows and damaged cars in Sofia when a rally against corruption and slow reforms in the face of the economic crisis turned into a riot.
* GREECE:
-- High youth unemployment was a main driver for unrest in Greece, initially sparked by the police shooting of a youth in an Athens suburb. General unemployment runs just above the EU average at 7.4 percent but the figure is 21.2 percent for the 15-24 age group and 10.5 percent for those aged 25-34. The protest forced a government reshuffle.
* LATVIA:
-- Last week, a 10,000-strong protest in Latvia descended into a riot, some protesters trying to storm parliament before going on the rampage. Government steps to cut wages, as part of an austerity plan to win international aid, have angered people.
* LITHUANIA:
-- Police fired teargas last week to disperse demonstrators who pelted parliament with stones in protest at government cuts in social spending to offset an economic slowdown. Police said 80 people were detained and 20 injured during the violence.
-- Prime Minister Andrius Kubilius, who was only sworn in in December, said the violence would not stop an austerity plan launched after a slide in output and revenues.
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5 comments:
You think the markets are free ? HoHoHo ! In gold once everyone gets sucked in by TA, then they lose their shirts !
Yesterday was classic price capping action. $900 is the line in the sand
On July 24, 1998, before the House Banking Committee, and six days later before the Senate Agricultural Committee, Chairman Greenspan made the following statement: "Central banks stand ready to lease gold in increasing quantities should the price rise."
Volcker. “We failed to deal with the gold price. That was a mistake”
We now have different clowns dressed up in the same costumes
Geithner, Rubin, Volcker, and Summers.
Geithner was Rubin’s protégé in the “Strong Dollar Policy” Ask yourself what that was if not manipulation of the gold price.
I noticed once or twice you expressed surprise that the gold price did not react to some appalling economic news. There is a wealth of the best information on the gold price suppression scheme right here
http://www.lemetropolecafe.com/library.cfm?FID=12
Right now there is a major battle going on between gold and the fiat, paper, debt backed by nothing US Dollar for which is cash and which isn’t. The inevitable outcome is already in the cards. There is very little gold left to continue the price suppression. JPM, GS, BAC, C, HSBC if they had to repay the gold they have borrowed would cause a massive short squeeze. They won’t, but the gold is now all but gone anyway. Fort Knox empty.
http://www.lemetropolecafe.com/pfv.cfm?pfvID=1525
Josh
"“The social contract is that the government creates widespread economic prosperity. In return, the plebs won’t make trouble for the ruling patricians. They also won’t demand political liberty".
...Oh, sh**, I thought I was the only person in the U.S. at least that sees things this way. What a relief that I might have some brain power left after all the TV! Not only do I see things that way, I do not under any circumstances believe for a moment that this is the first time in humanity this condition has existed. No, the MSNBC, CNN and others are WRONG, the world is in a very familiar place in human history, just on a larger scale than before due to larger population and it's a dark road for us if we don't wake up!
Funny for many years increased trade with China was justified thus: "Increasing prosperity and living standards will lead to more calls for political liberty."
So which is it? Does poverty lead to democracy or does wealth? Or, is it a question of the evenness of distribution, or rather, the perceived fairness of the distribution, which leads to unrest, regardless of the political system in place?
Does not rather the political system in place limit the response of the Authorities to unrest caused IMO less by the difficult economy, and more by the perception that a society's resources (to be more specific, government resources) are being given/diverted to a chosen few?
In other words, they won't be protesting for political freedom, they will be protesting as an exercise of their political freedom. More interesting is what they're protesting ( which is/will be the bad leadership from their Governments, without exception).
The State response to the protests will show the true colors of the respective Governments under such pressure.
Have you read this?: U.S. Mint Actions Discourage Gold Ownership
"Whether or not it was the US Mint’s intention, every significant action they have taken since August has either limited gold availability, eliminated gold product options, or increased the cost of acquiring gold. Has it all just been a consequence of surging global demand for gold, supply chain mismanagement, and bad timing for policy decisions? Or is there something else going on here?"
So which is it? Does poverty lead to democracy or does wealth? Or, is it a question of the evenness of distribution, or rather, the perceived fairness of the distribution, which leads to unrest, regardless of the political system in place?
The perceived fairness is the deciding factor, IMO.
Most people won't even care if Genghis Khan or Vlad Dracul was The Government as long as they can walk the streets in safety, feed their family and get to meet the opposite sex!
Switzerland ignored: What influence do the plebs really have in a democracy??
None! Anything important is decided in secrecy by "the people who matter" voting is far too risky!
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