Suddenly the clatter of the busy restaurant ceased. An eerie silence descended. From outside came chanting, shouting and the strange slapping sound of hundreds of slippered feet.

I looked out the window and there they were - the marching monks. The notion that this might happen had been the talk of the city for days.

Seeing a demonstration in Rangoon is a surreal sight, something I had never witnessed. What was even more surprising than the marching monks was their retinue of ordinary people, many holdings hands, their faces screwed up in anguish. This was open defiance, unprecedented in recent Burmese history.

It took almost an hour for the parade to pass the restaurant. When they were gone I hailed a cab and headed to the Myanmar Times office, where other taxi drivers were arriving to report that demonstrations had started all over the city.

The paper's veteran reporter, Chit Thein Oo, bustled into the office of the editor-in-chief, Ross Dunkley, noting ominously that now the protests had begun they would build and last a long time.

There was a discussion of whether staff photographers should be sent out, but Dunkley said it was a waste of time. "They'll only get arrested, like last time," he said. Agence France-Presse had local photographers and reporters on the ground who seemed immune from arrest.

After leaving the office I toured the city by cab and saw knots of demonstrators in many of the streets. When I returned to my hotel a longyi-clad man in a white collarless shirt, who had arrived the day before, was still sitting on an old wooden chair by the lift - just watching.

Presumably he was secret police. "Who is that man?" I later asked one of hotel's management staff. She smiled, rolled her eyes, and said: "Government guy."

I had arrived in Rangoon days earlier for the launch of Burma's first trendy young women's magazine, Now!. I had immediately noticed that the mood in the city had changed dramatically since my previous visits.

Usually people are fearful of saying anything derogatory about the Government to strangers, especially foreigners, but on this trip that reserve had gone.

People immediately launched into unprompted diatribes about how bad things were, especially about how hard it was to get by financially. The local currency, the kyat, was going off the rails - in recent years it had hovered between 800 and 1000 kyat per $US1, but moneychangers in the market were offering me 1450 kyat to the $US1 before serious bargaining even began.

The price of petrol had almost doubled. Bus fares had increased so much that some workers could no longer afford to travel to work. Drinking water was hard to get.

The electricity supply was more erratic than usual. In the days leading up to the demonstrations the Yangon City Electricity Supply Board had announced that what it optimistically called "24-hour power" would end in November because "when the rainy season ends we lose a lot of our hydropower".

Burma's bountiful natural gas supplies have been sold off by the generals for a handsome profit to neighbouring countries such as India. Rice was expensive, everything was expensive, and the Government was busy sinking millions of dollars into Naypyidaw, the new capital city far from Rangoon.

As seasoned Burma watchers know, it is not freedom or democracy that tips the balance in this dysfunctional pariah nation - it is the hip-pocket nerve that triggers the uprisings. When the people cannot eat they get angry.

Even after my arrival at Rangoon's expensive new airport, I began worrying about my taxi driver, Zaw. He was drawing the attention of other drivers, and one thing I knew from experience in Rangoon was that it does not pay to draw attention. Not only did he tell me how bad things were the moment I climbed into his cab, but he became excited, banging his fist on the steering wheel, shouting and spraying spittle on the windscreen. He shouted that it was all "f ---ing shit", that the Government was "f---ing shit", giving me examples of the Government's excesses.

He told me that many people had gone broke after buying cars the generals had arranged to have smuggled in from the Thai border, then sold for absurd prices of $12,000 to $15,000 for a 15-year-old Toyota. The generals then declared the smuggled cars illegal and seized them, giving the buyers no compensation.

He then drove me past the mansion belonging to one of Burma's richest industrialists, Tay Zar. He slowed down and pointed up the driveway at the two Ferraris, one red, one yellow, plus a new Mini Cooper, shaking his head in rage.

Owning two Ferraris seems a stupid show of ostentation because the roads are so dilapidated it is doubtful a car could ever go beyond 50kmh.

Tay Zar's ostentation is also known in Singapore. A recent report by Teo See Tuck in the Irrawaddy Journal said: "He [Tay Zar] has registered several companies in Singapore to operate businesses for the junta. He owns many black luxury cars, such as a Mercedes, a BMW and a Lexus with the cars' plate numbers 2727. They move in and out of the Meritus Mandarin Hotel to chauffeur the junta's VIPs and families to medical check-ups at Mount Elizabeth and sightseeing in Singapore.

"When the VIPs arrive in Singapore, he arranges transportation and pays for medical bills, all expenses paid by his company, Pavo Trading. The company has a special import licence to send goods to Myanmar and the Myanmar Port Authority gives the goods special consideration."

Tay Zar now operates his own airline, Air Bagan. But it is widely known that his service to Bangkok has lost a fortune. Taxi driver Zaw's final complaint was that he had just got a hefty parking fine and yet none of the cars belonging to the rich - also illegally parked - were booked. But such is the daily inequity of life in Rangoon.

Peter Olszewski worked in Rangoon for the English-language Myanmar Times in 2004 and is the author of Land of a Thousand Eyes (Allen & Unwin).