Welcome new reader!

Financial news I consider important, with my opinion, which is worth as much as you paid for it.
Please click HERE to read a synopsis of my view of the financial situation.

Tuesday, January 19, 2010

2010, year world destabilization begins

Unfortunately, during severe economic downturns countries try to gain support from it's citizens by diverting attention to global politics. Frequently these political topics are really over-hyped trumped up topics that push hot buttons on citizens. In the USA, we experienced it by targeting Iraq after 9/11 which by the Bush Administrations own reports stated Iraq had nothing to do with 9/11.

There are countless examples through time. Individual events happen all the time, however when the world experiences pressures on multiple governments world wide, the result can be unexpected. Iceland already collapsed. Venezuela, Argentina, Ireland, Greece, Dubai, Hungary, Romania, Bulgaria and the Baltic states of Latvia, Lithuania, Estonia, with Spain, Portugal and Italy right behind them. (I'm leaving out the many countries typically teetering on brink of disaster like North Korea, and obviously Haiti.)

As Argentina destabilizes, to redirect attention away from the government Argentina passed a new law declaring part of the Falkan Islands as theirs. For those of you over 30 years old, you may remember Argentina tried this years ago, and England came in and retook the province back quickly.

This will unfortunately start protectionism to escalate and more demonization of other countries. I fear at some point the US will be the target of wider range of demonization as the crisis unfolds.

America is already starting to demonize China. Granted much of it probably has merit, but the right time to deal with these issues was when trade was opened up. To go back now and take actions against China after trade is flowing freely will be reacted to with a stiff response. The US is calling for tariffs added to Glass, Steel, Tires, Pollution, and many other items. Of course China will retaliate with their own tariffs and the escalation will continue.

As the financial pressure builds, so will political spin. Look past the topic at what always matters, what is going on with the money flow in that government, and the answers will become clear on the real issues that should be focused on.

Depending on how this law is attempted to be enforced, we may quickly see Britain have to use military force once again. Argentina has no chance to just quietly annex the Falkans. So why do this? It is obvious to create an enemy outside of the government, to mis-direct. This may work with it's citizens in the short run, but in the long run the government will need to face it's issues.

No comments:

Post a Comment