There are three big themes that could dominate the investment landscape the next couple of years: (1) the food shortage; (2) the oil shortage; and (3) the silver shortage. The Egyptian earthquake could be a foreshock of two of these three (food and oil).
At the end of my article on the fractal condition of gold, I said "...there have been a lot of trustworthy indicators pointing to some agri drama coming soon." That was January 15th - and it looks like the food problem is already bursting onto the stage. This wasn't supposed to be until the spring, and we're not even out of January yet. But the climb in food prices touched off the revolution in Tunisia. Now in Egypt, high food costs hurting their poor, nonruling class is touching off what looks like a contagion of revolutionary fervor against inept Arab regimes that may seriously compound with the geological shortage of oil, all of which naturally compounds with gold and silver demand. The term "perfect storm" comes to mind.
Hosni Mubarak seems to be handing Egypt over to other leadership, which is worrisome considering that this territory is a grand geopolitical prize with the Suez, the proximity to Israel, and so on. Remember how critical a role Egypt played in the 1967 Six Day War - back when Egypt was not so friendly with the West ? The Muslim Brotherhood has been threatening to take over the reins in Egypt with the specter of religious zealots running the show, as they do now in Iran.
This is an overblown fear according to many experts, held up by Mubarak to scare support his way. This group is mainly just people wanting a better government, but who knows which way their passions could be inflamed. An offshoot of the Brotherhood, the Al-Wasat Party, is disallowed to field candidates in Egyptian "elections" and is headed by Abou Elela Mady. They can't field candidates, but they have been fielding the violence of the last week. When asked about Saudi Arabia's leader declaring their support to Mubarak, Mady had this to say as reported by a time.com article (1/29/11 Egypt In Turmoil):
All the Arab regimes, they are terrified. They know that if Mubarak falls, they will be next. Tunis gave us a push, but Egypt is the beginning of the end for the Arab world's dictatorial regimes. They should all be afraid now.
"Very afraid" would seem to sum up the other Arab states - certainly not a celebration of higher oil prices or democracy. These stock markets look only slightly better than that of Egypt itself (EGPT). As the shortages in food and oil grip the recovering global economy, geopolitical stability will certainly become a shortage as well.
Disclosure: I am long DBA, AGRI and gold holdings
