Welcome to Capital Account. Egypt’s President Mohamed Morsi struggles to resolve a political crisis created after he granted himself new powers by decree on Thursday. The edicts sent tens of thousands of protesters and supporters into the streets, and today Morsi may have prolonged the showdown as he told the country’s top judges he stands within his rights. This turmoil has also sent the Egyptian stock market plunging, with the largest drop since the Arab Spring uprisings in Egypt began. The benchmark stock market index plunged 9.6 percent, according to Bloomberg. Until recent events, the Egyptian market was the world’s best performing exchange this year. We talk to Mohamed Hawary, a managing director at an Egyptian investment firm, about how instability in Egypt has affected foreign investment.
And is there any connection between protests in Egypt and a secession movement in Catalonia? The Catalan drive for independence from Spain grew as separatists saw gains in regional elections over the weekend. Is there a common economic theme underpinning unrest in Egypt, Spain, and the US? We ask Michael Krieger of Liberty Blitzkrieg if we are going to see more of this unrest in 2013.
Plus Cyber Monday sales are expected to break records today and it seems money is changing hands at a record pace, fueled by Black Friday deals. But don’t be fooled, the velocity of money in the economy is at historic lows. We break it down in “Word of the Day.”
Also, as Iranian sanctions have devalued the rial, Iran has found a way around transaction bans by using gold as money. After many banks have blocked Turkey from facilitating payments to Iran for natural gas, Turkey has decided to use gold as a way to finance its Iranian purchases. Lauren and Demetri discuss gold as a monetary metal in today’s “Loose Change.”