EGYPT - dithering.

[A-Four]

its almost five years now that Egypt made an initial application to the I.M.F. for a loan, this was when Mubarak first announced the property tax and a freeze on civil service pay. Such new laws were not ratified , so the loan was not given. Although since then we have often seen Madam Lagarde, head of the I.M.F. smiling with who ever has been in power in Egypt no such applications for loans have been achieved.

We have to ask why this is so. A president of Egypt has a sort of respect from his people, as though he is the father of the nation, we only have to remember the very long televised speeches by Mubarak to realise that. He took the blame for nothing, it was always his government that caused the problems for HIS people. In effect no real financial laws have been past. The present financial situation in Egypt is a disaster waiting to happen, it has dithered along for so long now that one can only feel sorry for the Finance Minister, when a new government take its seats in parliament, for it is HE and his government that will be blamed for such changes, and certainly not President Sisi.

A good example of Egypt's fiscal problems today is the LE fix to the £,$,€, and ¥, the so called hard currencies, in August the Bank of Egypt sent wheel barrows of $ to the exchange rate market to prop up the LE each day, that cost it £500,000,000. .In September, they were sending in shed loads that totalled £2, Billion.It's reserves stand at $16 Billion.The I.M.F. have made it quite clear to President Sisi that no loan will come Egypt's way until new laws are ratified by parliament to bring in new money to its exchequer, the trouble is the nation might be bankrupt by then.

With regards to how this will effect Luxor, is quite complicated, the LE will certainly have to crash to a level of at least 15LE to £, this will encourage 'on hold' and new foreign investment into Egypt, but I fear this will not come to Luxor, being that organised tourism to that town has now moved on. It can not, and will not ever attract the same amount of organised tourism as we have seen in the past.

Austerity in Luxor and Egypt will become much worse, before it improves for the average Egyptian.

[Who2]

Iv'e watched it go from 15le down to 5le and back up again, I'm investing in gold and fine art currently...
Ps: I hold Warren Buffet on a permanent retainer, as my financial advisor.

[carrie]

If the President of Egypt is seen as Father by his people why did the Egyptians rise up against "Father Mubarak"? If anything is respected and revered here it is the Army not the politicians.

[A-Four]

If the President of Egypt is seen as Father by his people why did the Egyptians rise up against "Father Mubarak"? If anything is respected and revered here it is the Army not the politicians.

A very good incisive question Carrie, and will do my best to answer.

When the children of Egypt first enter school life, they are taught that the president, who ever he is, to be the father of the nation, the national anthem along with the portrait of the president, becomes as familiar to them as much as their own parents. Where their parents become older, that portrait seems to stay, oh so ever youthful.

Looking through the eyes of a young Egyptian man, now aged 25 to 30 years old, throughout his life, he learnt that his new school, new college and new university were built by Mubarak, he would have served a period of time in the army, which taught them that their nation is more important than even their own families, and that their Field Marshall was Hosni Mubarak,......the president.

The reason the so called revolution occurred came about was because 'the father of the nation' at the age of 80+, had become the grandfather, and as you would expect, was certainly out of touch regarding the aspirations of the young. It was also obvious that much of his power was delegated to a power vacuum between Mubarak's son and Mubarak's deputy, the dreaded Omar Suliman aged 75. The uprising came about by the young qualified people that Mubarak had failed to find work for, after promising them so much.

When Morsi became president he made many mistakes, but his biggest was to retire his deputy, General Tantawi aged 70+, in August 2012. When you have an institution that is responsible for 40% of gross domestic product (G.D.P.) in a nation, it would not be long before that institution engineered your down fall, and it did.

Set aside all this, it becomes obvious the army must find a new younger man, enter stage left, a classic example of national further, (as General Napolian Bonaparte entered the streets of Paris, and discharge a 'whiff of grape-shot', ....the rest is history.) a man who has very limited military experience, was head of Military Intelligence, trained, unlike his predecessors in Russia.( who knows, he could have been in the same class room as President Putin.)

So, now we have President Sisi, no real idea of political life, and therefore is 'above' it, so it is vital that a government is formed as soon as possible to carry out the reforms needed to bring Egypt forward, but don't worry Sisi will be in the background holding on to that 40% of G.D.P.,.............after all, HE is the head of the army and HE is the new 'father' of the nation.

[Dusak]

[carrie]

El Sisi, A Four trained at Sandhurst in Britain and also attended the USA Staff college he made very interesting speeches whilst there, worth reading.
Not all Egyptian men are called to serve in the Army but there is an over whelming respect and trust in the Army that I as an outsider often fail to understand but the Army is seen as the protector of the Egyptian people and they believe would never turn against them. I don't think it has anything to do with having served or not.
I remember when the people were revolting against Mubarak and they were marching forward into the guns of the tanks, I was terrified for them thought there was going to be a massacre, suddenly the guns were turned sideways away from the people and an Egyptian friend said to me "I knew that would happen, the Army will never hurt the people, we have won the revolution."
Now El Sisi has taken over and I for one don't envy him his job but he seems to remain popular with the people I speak to but never described as "Father of the Nation."

[A-Four]

El Sisi, A Four trained at Sandhurst in Britain and also attended the USA Staff college he made very interesting speeches whilst there, worth reading.

Yes you are correct here Carrie, unfortunately I was thinking of Mubarak's deputy Omar Suilman who managed to get out of Egypt, and ending his days in the U.S.,..........well we all make mistakes sometime. .

[A-Four]

Now El Sisi has taken over and I for one don't envy him his job but he seems to remain popular with the people I speak to but never described as "Father of the Nation."

He will not become 'the Father' yet, he has only just changed out of his uniform into a brand new suit, it takes a little time. Even the likes of Augustus and Napoleon were the 'reluctant' emperors, until THEIR time was right.

Personally, I see President Sisi as the man of the moment, who was in the right place, at the right time, and at the right age. He will still be in his job long after many prime ministers will have lost theirs, but none of their faults of administration will be placed at the door of 'the Father', that is of course until he lives long enough to become 'the Grandfather'.

Nothing has changed, there has been no revolution, just a very messy juggling of the cards.

[Glyphdoctor]

Mubarak trained in the Soviet Union.

[newcastle]

A major advantage Sisi has over Mubarak is one of age.

In the last two decades of Mubarak's reign the corrupt and self-serving elements of his administration took over. He was no longer in control. He himself and his family were complicit in the corruption.

Another important change was the advent of social media. It was no longer possible to control what people, particularly the young and educated, knew. And they now had the means to mobilise.

Sisi appears to have the energy and drive to take Egypt in a new direction. Hopefully his moral compass is in order.

Egypt will need a lot of support from friendly nations and a lot of luck.

How long the people give him to effect a positive improvement is anyone's guess. They are a remarkably tolerant society.

The current economic situation seems dire with food prices soaring and any benefits, if there are any, from the canal extension, new gas finds, etc. a long way off.

The young Egyptians I talk to are well aware of the issues of a poor education and health system and the vagaries of the justice system. For the time being the majority of them seem prepared to moan and chatter amongst themselves, in relatively good humour.

I wonder how long it will last. .....

[A-Four]

Mubarak trained in the Soviet Union.

Yes this is true, but unlike Mubarak, he studied the careful workings of the secret service there, then after with the CIA, a sort of modern day Edward Snowden. Although initially a military man, he quickly got rid of the uniform after a short period when he became head of the Amdowla, and even then his position was secret until around the year 2000.

When in later years an attempt to assassinate Mubarak was made, Suliman warned him before hand, one has to ask, at this point did Mubarak become the Tiberius to the Sajanus of the Twelve Caesars. Come the so called revolution we see Suliman suddenly as deputy president, a post that previously Mubarak never made available to anyone.

At his age, Suliman thought his time had come, but he was too late, and he made one vital mistake, he sent a message on his Vodaphone mobile to his thugs to get them down to a certain square in Downtown Cairo, big mistake, the CIA, and G.C.H.Q. also picked up on that call,..........he was doomed.

We learnt recently from Edward Snowden that cellphones can be switched on, hear any one conversation and then switched off without the owner even knowing, that knowledge has in fact been known for years.

I wonder if the true story will ever come out.

P.S. - By the way Glyphdoctor, .....................Sunnat Jadidat Saeida.

[A-Four]

A good example of Egypt's fiscal problems today is the LE fix to the £,$,€, and ¥, the so called hard currencies, in August the Bank of Egypt sent wheel barrows of $ to the exchange rate market to prop up the LE each day, that cost it £500,000,000. .In September, they were sending in shed loads that totalled £2, Billion.It's reserves stand at $16 Billion.The I.M.F. have made it quite clear to President Sisi that no loan will come Egypt's way until new laws are ratified by parliament to bring in new money to its exchequer, the trouble is the nation might be bankrupt by then..

Some rather strange happenings have occurred at the Bank of Egypt during this week. We discover that instead of expecting the reserves to diminish by at least £500,000,000 this past month, instead to all amazement the bank actually held its own, which in its self is a miracle, and a great credit to its relatively new governor. However, we learn today that with immediate effect he is to be replaced by his deputy.

Seems to me, someone has been frying the books, it's quicker than cooking,............so I am told.

[A-Four]

Now we learn why the previous governor of the Bank of Egypt made a very quick exit through the back door.

From now on you are able to buy bonds through all Egyptian banks at a rate of 12.5% interest per annum on a basic five year term. Who in their right would put themselves forward to be a member of parliament in Egypt,............only fools dash in, and I don't just mean into a bank.

[A-Four]

Latest news coming out of Cairo is that another national bank in Egypt, that is more than 80% publicly owned is now offering 12.75% on a LE fixed three year bond. This balloon seems to get bigger by the day, let's hope it don't burst before the end of the elections.

I am sure some will remember what happened to the Icelandic banks that offered £ and $ account bonds in 2007.

[Glyphdoctor]

Who in their right would put themselves forward to be a member of parliament in Egypt,............only fools dash in, and I don't just mean into a bank.

What's that supposed to mean?

[newcastle]

You beat me to it

[newcastle]

Ive just returned from watching " Spectre".

The plot, such as it was, was less dificult to decipher than much of the above.

I fell asleep half way through. ....and the same in the cinema.

P.S. if you haven't seen it....save your money. Underwhelming

[A-Four]

Who in their right would put themselves forward to be a member of parliament in Egypt,............only fools dash in, and I don't just mean into a bank.

What's that supposed to mean?

Sometimes it can be difficult to explain how world finance can seriously effect politics, and visa versa. Then there is the problem interpretation of language, for example in the U.S. and Canada you all know what a Ponzi scheme is, but in the U.K. and perhaps Australia it's known as Pyramid selling.

I have to find away to explain how what happened in the West in 2007-08 in the 'Too Big to Fail' disaster, is now going to happen in Egypt, if nothing is done immediately to rectify the situation, admittedly on a smaller scale, but the suffering of the poor in Egypt, for there are many, will be equal to that or worse than that as being played out throughout Europe today. For those who think their problems are over, very soon we shall here from Portugal, where a new left wing government has just been elected, their attitude is very clear,.....car'nt pay - won't pay,.............I wonder how the Bundersbank will deal with that one. Perhaps you may see here what I mean how a similar situation that is unfolding in Egypt now will seriously effect its future, though the people in power don't seem to care.

At the moment I am away from London, but on my journey home tomorrow I will write up how I see the joint political - financial situation in Egypt,.....then ask, ....Would you put yourself forward as a M.P. in Egypt now ?

[Glyphdoctor]

Even if it is a sinking ship, someone has to be MP. I'd just like to know why you think the MPs we just elected are fools.

[A-Four]

No disrespect to you here Glyph but, you was brought up in the States where things are quite different to attitude regarding finance v politics.

If you have a mortgage in the U.S. and you bought during a boom (or bull) period then suddenly recession sets in, interest rates go through the roof, you are allowed to simply walk away from the property, or even remain and pay a rent at a vastly reduced rate, then at a later date take out a new mortgage on the same property at again lower market rate. In the U.K. that simply don't happen. In the States you would blame the banks for your problem. In the U.K. people blame the government in power at that moment, although it was not to blame for the financial recession.