Originally Posted by Bucking Bar

One thing the news outlets and most economists miss is that crazy dictators and unstable governments tend to under sell the market and lower prices.

The crazier and more unstable the regime, the more likely they are to need cash. They'll run to the first cash cow the have, natural resources, and dump them for the money to fix whatever problem they're in. It is a fact of life until the disruption gets so bad that the infrastructure no longer exists to produce the good that is sold. (Africa mostly)

An easy, recent, example of this cycle is Iraq. Saddam never played nice with the Arab cartel, he sold oil undercutting the prices of the Saudis and Iranians. IMHO a contributing reason we went to war was the pressure from the Saudi's to take him out of the market. The price of oil reacted to the disruption, the loss of supply and market manipulations making people in the oil business very, VERY rich for a time until the market corrected. The 2008 rise in the price of oil was a more severe economic shock than the effect of a doubling of tax rates here in the US (in really rough terms).

Smart politicians know who ever is in power in Egypt will run the canal, profitably generating cash for their administration and friends.

The US needs to learn that we do not necessarily need to play king maker. We need to play deal maker and let people run their own damn affairs.