Sunday, October 25, 2009

Poltical stability & middle class: an update

After my recent post political stability and the middle class, some distubing items have appeared:

  • The debtors' revolt continues. A story in the New York Times reports that the courts are taking a dim view of lenders who try to foreclose without proper documentation. If this trend continues, chaos will ensue.
  • There is more backlash against Wall Street. Speaking about bankers' bonuses, the vice-chairman at Goldman Sachs stated that the public must "tolerate the inequality as a way to achieve greater prosperity for all" - an unfortunate remark picked up by The Guardian. Meanwhile, a headline in the alternative press reads After the Billionaires Plundered Alabama Town, Troops Were Called in ... Illegally.

Watch out for the pitchforks. Down that road is turmoil, political disintegration, and chaos.

Simon Johnson is proving to be prescient. These stories sound like the sorts of things that might happen in an emerging market country in financial trouble. Is there any wonder why there is downward pressure on the US Dollar?

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