There's a great hunger in the land—the people have Facebook access and the faces they see increase their rage. They see generals, unnamed and anonymous, promising to give them bread and democracy. But they also see that the truth is otherwise. Unlike us, they're well aware the Egyptian military runs beach resorts, banks and bread factories. Its subsidiaries manufacture cars, TVs, furniture, washing machines and other myriad necessities. They even have the hubris to control the bottled-water industry. The brand is named "SAFI" after one of the general's daughters. From this gigantic conglomeration of businesses, the generals pay no taxes, use drafted workers and buy real estate on advantageous terms. They're not responsible to report anything to the Egyptian people or the legislature. The ouster of Mubarek was merely a placebo—an attempt to cover up the fact that the generals have been the power behind the government. Their names are unknown save the leader, Field Marshall Tantawi, who's often referred to as "Mubarek's poodle." They've established Marshall law, dissolved Parliament and cleared Tahrir Square with the carrot stick of eventually permitting democratic elections.
Still unanswered are the protestors with the release of thousands of political prisoners. Such brazen exercise of authority might be justifiably interpreted as a conflict of interest. However, the masses in Egypt and the rest of the Middle East are growing increasingly restive. The old games of propping up despots like Baptista and Trujillo in this age with the Internet accessible to men on the street and students in universities is growing increasingly thin. Revolutions have never played out according to script.
In Russia, the czar was overthrown only to be replaced by a small minority party, the Bolsheviks. In Germany it was the Nazis that replaced the Weimar Republic. The Iranian revolution gave us the Mullahs instead of the Shah. The recent elections in Lebanon gave us the terroristic Hezbollah. What will be the future role of a military that for the past 30 years has played a crucial behind-the-scenes role in preserving its own vast business interests? With Iran moving ships through the Suez, the situation remains in flux. This is a test of the Egyptian military. The cards have been dealt and Egypt allowing the Iranian boats through the Suez will show Israel the military's hand and whose side they're truly on.
Recently, newspapers said that the military has already "begun taking steps to protect the privileges of its gated economy, discouraging changes. . .that are crucial if Egypt is to emerge as a stable and prosperous country. Protecting its businesses from scrutiny and accountability is a red line that the military will draw—and that means there can be no meaningful civilian oversight."
Some other disturbing headlines in today's papers include:
- "Battle Lines Harden Across the Mideast as Rulers Dig in"
- "Dozens Reported Killed in Libyan Crackdown"
- "Yemen Protestors Face off for the 8th Day"
- "The Committee Formed to Protect Journalists Fights Attacks"
- "Egypt Disappearances Raise Concerns About the Military"
Silver has broken out of a six-week consolidation into new highs and is currently showing incredible relative strength. This morning SLV made an ascending triple-top breakout on the point and figure chart at $31. I believe we may start seeing another major leg higher and acceleration of the trend in PMs. Physical demand for silver is increasing and could continue its rapid rise higher in its new high territory.
Gold is showing similar strength, as it broke the 50-day moving average to the upside. In January, gold and miners reached oversold levels not seen in over a year. Now many of the bears who sold out and expected a steeper correction will be returning pushing gold, silver and mining stocks into new high territory. This is the perfect storm for precious metal investors. Our buy signal on January 25th has proven a short-term turning point, and the break into new highs may look like one of the best buying opportunities in years. To see the article I wrote in the middle of the panic, click here. Investors who did not trust the two-year trendline, made a major mistake and sold out into the fear. Those times when fear reaches an extreme offer the best opportunities.
Do not waste any time and sign up for a free 30-day trial of my daily intelligence report where I discuss market timing, stock selections and macroeconomic intelligence not found anywhere else.
Gold Stock Trades