Lessons From Egypt For The American People
By Charles Kadlec
02/15/11 “Cairo, US Blindsided by Revolt” was The Wall Street Journal’s headline on its analysis of what led up to the Egyptian crisis.
“We were caught by surprise.” Israeli Finance Minister Yval Steinitz told the same newspaper in a separate interview.
As I reflected on the demonstrations in Egypt and followed the news of the events that followed, it occurred to me there were two vital lessons for the American people that have been overlooked.
The first is that the entire notion the United States can pursue an independent monetary policy is a dangerous and erroneous conceit.
The surge in food prices that has contributed directly to the uprisings in Tunisia, Egypt and other countries throughout the Middle East can be traced directly to the Fed’s parochial effort to stimulate the domestic economy with an inflationary monetary policy.
Food prices as reflected on the CRB food index are up 36% in the past year – including an 8% advance in the month of January. The UN’s FAO Food Price Index rose 3.4% in January alone, and now stands at its highest in real and nominal terms since 1990. Rising food prices are not given much weight in the calculation of the US consumer price index, but they’ve created havoc in the lives of millions of people throughout the world.