Saturday, January 29, 2011
"On Friday, the price of U.S. crude soared 4 percent. A 4 percent rise in a single day is pretty staggering."
As if the world economy did not have enough problems already, now the riots in Egypt threaten to send the price of oil soaring into the stratosphere. On Friday, the price of U.S. crude soared 4 percent. A 4 percent rise in a single day is pretty staggering. The price of Brent crude in London closed just under the magic $100 a barrel mark at $99.42. The incredibly violent riots in Egypt have financial markets all over the globe on edge right now. Any time there is violence or war in the Middle East it has a dramatic impact on financial markets, but this time things seem even more serious than usual. Many believe that we could see an entirely new Egyptian government emerge out of this crisis, and the uncertainty that would bring would make investors all around the globe nervous. Financial markets like predictability, peace and security. If Egyptian President Hosni Mubarak's 30 year reign is brought to an end, it will severely shake up the entire region, and that will not be good news for the global economy.
Have you seen how violent these protests have become? Cars and buildings are on fire all over the place. Even the headquarters of Hosni Mubarak's political party was burned down. The Egyptian military has been deployed on the streets of Cairo. Protesters have been showering government forces with stones, firebombs and anything else that they can find to throw. Security forces have been using rubber bullets, water cannons and tear gas to try to disperse the protesters but those efforts seem to be doing little good. Deaths and injuries are being reported all over the place. There are even rumors that the wife and son of Hosni Mubarak have already left the country.
At this point, Mubarak has gone on national television and has announced that he has asked his cabinet to resign. That is an absolutely stunning move, but it is doubtful that the protesters will be satisfied. All over Cairo protesters continue to chant for Mubarak to resign.