Hosni Mubarak, who has been president (dictator) of Egypt for almost 30 years, says he will step down and hold elections. This could be several months away, but it is not all that likely that he will make it through the weekend. Protesters are demanding that he step down now. Mubarak, of course, is claiming that he was going to step down anyway (yeah, right).
This blog is usually about the economy and investments, but it also has a libertarian theme. The situation in Egypt is too important to ignore right now and it will likely have an impact on our investments too. We are seeing a revolution take place, much like the demise of the Soviet Empire in the last 80's and early 90's.
This situation is not just in Egypt. It started in Tunisia where the dictator of 23 years there was ousted. We are seeing protests in Jordan and Yemen. All of the Arab states, particularly those with U.S. government backed dictators, are in jeopardy. Courageousness can spread quickly.
The biggest news would be if Saudi Arabia started stirring. Just like Egypt, Saudi Arabia receives billions of dollars in U.S. welfare and most of it goes to support the totalitarian government. Considering how much U.S. politicians like to talk about spreading democracy, they sure do support a lot of dictators.
If the House of Saud were to topple, it will have a lot implications on the rest of the world. Overall, it would be a good thing, especially if it moves the people towards liberty. It might drive the price of oil to the sky in the short-term because of uncertainty. In fact, I think a small speculation on an ETF or stock that is correlated to the price of oil would not be a bad bet right now. I could certainly be wrong, but there seems to be a lot more reward potential than risk right now.
Unless there is an all-out war, I don't think the oil supplies will be interrupted for long. For whoever is in control of the oil supplies, it is in their best interest to sell it. So if you do speculate on an oil play, it would also be wise to take some profits if they come. Oil and gold both went up big last Friday, but by Monday morning they had settled down. Once people get more comfortable with the situation (like in Egypt), the market tends to settle down. The same could happen in Saudi Arabia if there end up being protests there.
This is an historic time we live in. This all shows that there is hope for liberty in our future. Technology is getting the truth out like never before. We should embrace this technology and encourage others to do so. We should spread the word of liberty. We should help others see how much better their lives would be with more liberty and less government. This goes for everywhere.