Addison Wiggin

“My impression of Egypt,” writes Byron King, editor of Outstanding Investments, “is a land of a few very wealthy, well-connected people and a whole lot of poor and very poor folk.”

Thus, if 1 million people are demonstrating today in Cairo, guess where most of them fall on the income scale.

Protests in Cairo

“I spent some memorable time in Egypt, back in my days in the Navy, particularly in the mid-1990s as a Navy Reservist. During one military exercise called Bright Star, I saw a lot of Egypt up close. In the company of an Egyptian military driver-translator-minder-handler, I traveled all over the place: Cairo, Alexandria, El Alamein, Suez and more.

“All in all, I spent quite a bit of time with members of the Egyptian military. I got into both the slums and the rural outback – as well as into the upper (and I mean upper) echelons of power and privilege. As to that power and privilege thing, hey…it’s nice work if you can get it, and that’s one part of the problem.

“There’s not much middle class. And the slums of the large cities stretch for mile after mile. It’s an urban squalor, the likes of which most North Americans cannot conceive. You have to see it to believe it. The poverty in some areas is stunning, staggering – as is the indifference of the elites.”

Hence, the following Tweet that just made it out of Egypt: “The government is spreading rumors of fear and of burglary and of violence. The only incidence of theft and burglary are done by the police themselves.”

Of course, Egypt has shut down Internet access. But Google is offering an ingenious workaround: People can dial a phone number and leave a voice message that’s automatically translated into a Twitter message using the identifying tag #egypt.

“Jobs are scarce in Egypt,” says Byron, assessing the economy. “Unemployment is easily north of 20%, and underemployment is doubtless another 20% or so.

“It hasn’t helped Egypt that in the past 20 years, many of the world’s low-end factory jobs migrated to China. The Egyptian ‘working’ class has been left to toil at the truly local low-wage jobs, where they can’t be out-competed by cheap imports from China. Think about the low economic bar that sets.

“As Egyptian factories closed (or never even opened, due to the China sucking sound), much of the Egyptian working poor stopped working and became poorer. It created an opening for the Muslim Brotherhood to grow, because of its charitable work in distributing food and fuel to the urban masses – along with other messages, if you get my drift.”

As we write, the military has issued a statement ruling out attacks on civilian protesters. Meanwhile, the government has shut down all the mobile phone networks. How long can Hosni Mubarak hang on? We shall see…

Addison Wiggin
for The Daily Reckoning

Addison Wiggin

Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He's the creator and editorial director of Agora Financial's daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar, and Why it's Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.

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