Can a government fall after just three weeks of protests? People who were ignored when they predicted these things even a year ago look really wise today. While the future of Egypt is very uncertain, dramatic and unexpected changes have arrived.
Americans are already forgetting the "shock and awe" of October 2008, when the world was completely surprised by the unraveling of financial markets. Dramatic changes were made under the stress of the moment — actions that transferred trillions in bad bets to the unsuspecting American taxpayer. "What else could we do?", they lament. The term "moral hazard" was an understated way to describe the warped "means-to-an-end" mentality that was willing to do anything to keep powerful financial interests in charge.
America's song today is something like "forget the past, recovery is here". We have skyrocketing public debt with no changes in government or financial institution behavior, but "the recovery is underway" has been repeated as a powerful lullaby.
Dr. B. has described the "surprises" that are coming, only they need not take savvy "watchers" off guard. Read Dr. B's commentary from April 2009 — with these words that could have been written this week:
No one should assume that the upward trend in equity prices means that everything is going to be all right. To the contrary, the increasing sovereign debt of the United States is undermining the prospect for continuing economic sovereignty. Within the next few years we should expect a massive panic in financial markets as our nation’s credit worthiness is called into question. The panic will be managed (but not quelled) by the shuttering of financial markets by executive edict. The temporary closing of markets will produce an environment of fear sufficient to allow U.S. economic sovereignty to be bartered away for an extensive set of fixes to our economic system and the financial architecture of the world.
As I watch Egypt, I am reminded of Dr. B.'s warnings, and recognize that when they happen, they will be "unexpected" by most. If you will watch and share this site with others, then fewer Americans will be surprised.