Why Egypt Could Affect the US Real Estate

There is no doubt, the strife in Egypt inevitably will have an impact on the United States. It already has affected the US economy. Oil prices have been increasing in the past two weeks, and that will raise some prices and retard a portion of our economic growth.

But why unrest in Egypt matters a lot to all real estate owners and investors in the US?

First is the incredible uncertainty of where all of this is going. Nobody knows yet. It could be good if there is an orderly transition to democratic governments and economic opportunity. Bad if the Islamists get control of the country.Uncertainty does not bode well for investment generally, until the future is somewhat more clear. There are tens of billions of dollars from the Mideast that is moving out rapidly, even more than it has, and that money needs to go somewhere.

Secondly, Egypt is one of those overwhelming black swan events we all have wondered about, and this is a whole flock of them. Tunisia, Lebanon, Egypt, and now maybe Jordan, Yemen, and even Libya. This could be as disruptive as Lehman depending on how it unfolds. The old dictatorial regimes of the Mideast are coming to an end. A completely new era in the area is dawning. Social media and the internet changed everything. The pressures have been building for several decades, but now the young and the middle classes are able to see what they have endured and what is possible in the western world and they want their share.

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