Mitch hung up and put the Retreat’s communications officer on the line. “This is one, over.”
Mitch heard, “Go ahead, one.”
Mitch said, “Condition one, over. I repeat, condition one; this is not a drill, over.”
“Copy one, confirm condition one read 5 by 5, over,” the officer said.
“Copy, this is one, out,” Mitch said. With that announcement the Retreat just went on high alert and various contingency plans were automatically set and in motion. Mitch returned to his Bloomberg and the Olympus crew as they finished up Operation Broken Arrow. Broken Arrow was a military term used to describe the unauthorized use or transport of a nuclear device and Mitch used it as a signal to his traders. The Olympus traders, via computer, liquidated every trading position, regardless of price, in the entire Olympus portfolio. The trading and banks where Olympus had its funds immediately sent out funds to preselected non-US Government gold depositories within a 300-mile radius of the Retreat. Armored cars that Mitch paid to be on 24-hour alert were dispatched to the repositories and loaded with bullion where they were dispatched directly to the Retreat’s special, off the books commercial shipping centers and forwarded without a trail to the Retreat. The shipping center also dispatched some of the bullion to other off site hidden caches and vaults that the Retreat maintained. Mitch had literally just bought $10 billion worth of gold bricks. Mitch had to become liquid and into cash as fast as possible because the stock and bond markets had circuit breakers that would shut down trading in the market if certain thresholds were met, then he had to put every dime Olympus could raise into physical assets. Gold is the most widely recognized commodity and it is 100% fungible and malleable in that it can be made into different forms, like coins, and traded for a known value based on weight and purity. The entire world once operated on the gold standard where everything was bought and sold for gold; if there was a trade imbalance then the imbalance was paid in gold bricks literally sent from one country to another. The US gold depository in Fort Knox was where the US’s gold bricks were stored, it was the country’s treasury. Politicians didn’t like the gold standard because dollar bills could always be exchanged for gold, the value of the bills was known by everyone. You could only print as much money as you had gold in the bank. If you ever printed and spent more, then you would be in trouble if anyone ever wanted the physical gold in exchange. The politicians moved away from the gold standard so they could create a theoretical value of currency based on the GDP of a country which is the total value of all the goods and services that the population of a country could produce in a year. The theoretical value created a baseline and the GDP of the United States was the biggest in the world. The United States dollar was the world’s reserve currency so every global trade item was denominated in US dollars. The globe was in a world of hurt in the coming days. Uncle Sam was broke and the cat would soon be out of the bag. Nobody, including Mitch, knew what the wounded eagle would do but none of the solutions were good ones and the nation was now beholden to its unpaid creditors. Mitch was following the golden rule: he who had all the gold made all the rules.
The Retreat went on high alert; everyone at the Retreat was required to muster with their gear at designated rally points and stand for inspection by their commanding company officer within exactly one hour of an alert being given. The security staff was placed on high alert and were required to man their posts throughout the Retreat at various strategic locations. The Retreat regularly worked on this alert system and everyone was considered present and accounted for within fifteen minutes. The militia were all dismissed from muster under condition orange which meant they may go about their business but firearms needed to be on their person or within six feet of them and their go bags had to be within one hundred feet of their person. Commanding officers had to report the readiness of their troop to the battalion commanders. The Retreat was not planning for action but were ready at a moment’s notice to engage if necessary.
Mitch continued to monitor the market while Melanie, Duncan and the command staff prepared for a briefing from Mitch as to the nature of the alert and the possible threats posed to the Retreat. The Treasury volatility index was now hopping like a yo-yo. Treasuries were in play, big time, and there were too many sellers and no buyers. Mitch saw a few blips that looked like the Treasury was trying to stem the tide with purchases and the Fed was putting liquidity into the system as fast as possible and acting as the buyer of last resort but they could not, even with their bloated balance sheets, stem the onslaught. The yields on the ten-year note climbed from 1.75% to 9% in under an hour. The rout was on and buyers could not be coaxed off the sideline for any price.
The stock market kept climbing but equity pales in comparison to the size of debt and the bond market, it is like a fly on an elephant. Companies were gorging on debt during the post housing crash bubble. Corporate debt on large company’s balance sheets blossomed as interest rates were so low, they could borrow money at 1-2% and even a crap zombie company could make 4% on their money. The government kept pouring money into the market, financed by debt, so companies would take it and hopefully create some value, jobs and products. The CEOs said thank you, used the cheap debt to buyback stocks which raised the stock price so they could cash in on lucrative bonuses and stock options. The Federal Reserve was trying to use inflation to stop the deflationary negative feedback loop they were caught in. Their usual trick of paying people with two dollars that were really only worth one wasn’t working anymore. The world was clearly announcing that the Emperor had no clothes. The government had shot its wad at the market. Now the CEOs most on the government’s teat took their shot trying to sell their cheap debt at 1-2% and buy treasuries trading at 9%. Mitch was watching the entire dance on the screen and there was not a single announcement, press release, report or news story about what was happening. Duncan and Melanie came into the virtual office and saw Mitch gazing at the screens. Almost every news screen was active but all the stories were about the heroic work of Federal Pharmaceuticals.
“What’s up, Mitch?” Melanie asked.
“Federal Pharmaceuticals,” Mitch replied.
“Isn’t that good?” Duncan asked. “You called an alert to throw a party?”
“Nope. What you are seeing is Nero dancing while Rome burns.” Mitch laughed while pointing at the dancing US Treasury volatility index.
Melanie went to the terminal and pointed to the bond market screen with an unanswered question. Mitch knew every facial expression in his wife’s arsenal and nodded.
“How bad?” Melanie asked.
“End of the country as we know it,” Mitch said. “There was a battle, the world won and we lost. Nothing left but the crying. It looks like the media is in the government’s pocket but look,” Mitch pointed to a screen, “it’s going out online and the government will need to respond with some lies, propaganda and rhetoric; the blame game has to be played and then it is either the big lie or fight time.”
Duncan asked, “Which will they choose?”
Mitch replied with confidence, “It will be the big lie, it is in their nature and they don’t have the stomach, the fight or the support of the population. They will turn on the people to save their own skins. Ten to one they bug out before tomorrow leaving the President to hang in the wind. The President will cut a deal and dance with the devil.”
“How long will it take?” Melanie asked.
“Limit today in the markets, limit tomorrow, it’s over in three days. The President will tell his lies then he will capitulate and surrender within the week,” Mitch explained. “He might be able to hold out for a month if he had the people behind him or he could tell the world to pound sand and come get it if you can but he’s a draft dodger and will try and cut a deal. Here he comes now with the everything is OK speech.”
The President appeared on Mitch’s screen to make an announcement. “I hope you all noticed that the stock market closed today at another all-time high. The bond market an
d US Treasury bill auction had a few issues today, it looks like a computer glitch created an accidental movement in the market. The Treasury Secretary and Federal Reserve Chairman are fixing the problem and things will be back to normal tomorrow. The economy continues to expand at a record pace and unemployment has again fallen to its lowest spot in a decade. Thank you all and God bless America.”
Mitch turned to his partners. “He’s going with the big lie. We’d better get the crew together and come up with a plan. The Olympus crew will be here shortly so please don’t shoot them. We need to get into the turtle starting tomorrow and talk to the folks in Bovill. This will be a hostile takeover so we need to prepare.”
The management crew left the office to go get into their uniforms and prepare the Retreat for what was coming.
Chapter 8
The Retreat command staff and commanders met in the downstairs conference room with Mitch sitting at the head of the table still deep in thought. Finally, he looked up and stood.
“OK, folks,” Mitch began, “the United States is on the ropes and looks like it is going down. First, I’ll start with the facts; the United States is broke and owes the international market trillions of dollars and it can’t pay it back. Second, the US Dollar is now worthless, like worse than peso worthless. Third, the international community wants its money back and every United States citizen owes part of that debt. The goods and services of the United States is the guarantor of that debt. Even if the US Government liquidated everything it owned and seized every dollar in every person and companies’ bank accounts, there is not enough money to pay the debt.
“Now onto opinions and threats to the Retreat,” Mitch continued. “The US Government will choose fight or flight, I do not know which. They can tell the lenders to get lost and come get your money if you can or they will capitulate and sell all their assets and essentially place the American public into slavery until the debt is repaid. They will say it will take a year and then the country can rebuild. I believe the government will sell us out to save their own skins but I do not know which way they will go. The Retreat is on nobody’s radar so there is no imminent threat. We have the supplies and means of production we need. Not a single thing will change here unless challenged by outside forces. We prepared for this, we were the ant and not the grasshopper, but please remember we chose freedom and the ant never gloated to the grasshopper. We have the ability, skills and will to fight to defend what we all created here; you will never be sold out. Questions?”
“When the government rolls over, bends over and drops its drawers, what is next?” one of the commanders said.
“That is a great question and I don’t know the answer,” Mitch replied. “I guess I would turn the question over to our war gamer and international specialist to speculate; and again, this is speculation.”
The fiction author of the group stood up. “Thanks, Mitch. I believe that the foreign governments will force the President’s hand and knows they have to neuter the military. They know colonization will not work and that subjugation is their only possible solution. I think an international coalition under the guise of the UN will be sent to America but it will really be under the leadership of the Chinese and the Russians. The Chinese will probably take the West Coast and the Russians will take the East Coast. They will send troops to take over the American continental military equipment and armaments, nukes will be taken off the table. We are on the Left Coast so I would expect the Chinese to move into the cities and create a defensive perimeter around the industrial centers like Boeing. The Chinese think all Americans are the same but they will have an easy time with the prominent liberal unarmed enclaves of the West Coast. An armed man is a citizen and an unarmed man is a subject. The Chinese will seek to plan the economy, shut down the internet and communication and control the means of production. They will have to cross the cascade mountains to get to where the food is though. There are enough big agricultural farm businesses in Eastern Washington and Oregon to feed the left coast along with access to the left coast fisheries. Most of the West Coast Grid can be run with the Columbia River hydroelectric dams. If I was the Chinese, I would not advance into Eastern Washington, there are too many people with guns there. Japanese Admiral Yamamoto once said he would never invade America because there was a gun behind every blade of grass. If I was wargaming the Chinese strategy, I would advise them to seize the grid and use power to get the people to capitulate. Most of the oil refining capacity is also on the coast so I would cut off petroleum and only send it to compliant areas. I would also set up a small quota system equal to what taxes used to be where a share of food had to be donated. Eventually everyone complies and figures who cares, the new boss is exactly like the old boss. If people do not comply then the Chinese will sit behind their walls and defensive perimeter and cut the power, communications and fuel. They will let the population tear itself apart then come mop up what is left. The Chinese will play the long game. They count time in ages and will take the boiling frog approach of slowly turning up the heat a few degrees a day so the frog doesn’t notice and gets used to the heat each time, until eventually the frog boils and dies.”
Duncan asked, “How do we defeat them in that strategy?”
The author replied, “We don’t. We have to convince them that they want to leave. They will have an armament edge in every category, air, land and sea. Any organized force will be wiped out. They will have the full power of the NSA to find dissidents and prosecute offenders with overwhelming force. Americans have always fought force against force with every enemy, pure stupidity in my belief to have gone toe to toe with the British Red Coats during the revolution. We need to become the Viet Cong, the Mujahadeen or the Dutch Resistance, denying the enemy transportation like rail lines, and freeways, cutting communications and organizing small resistance cells that are not in coordination with any others, like terrorist cells. We need to cockroach the Chinese while winning the hearts and minds of the heartland to resist and fight. The Viet Cong did not win the Vietnam War, they just denied the US forces a victory and made it untenable for the Americans to stay. It is the classic how do you eat an elephant joke; the answer is one bite at a time.”
Mitch asked, “So what do we do at the Retreat?”
The author replied, “It depends. If the State of Idaho declares independence, which it is likely to do, then we will probably become a logistics, propaganda and communications hub for the resistance. The Chinese will cut power and fuel to Idaho and wait for the people of Idaho to kill each other over food and resources for them, while they hide behind their great wall. We need to stop that from happening by becoming a communication and logistics hub. The people of Idaho know how to survive and they will be underestimated. The Chinese will use Stryker brigades out of Fort Lewis to control transportation lanes. They need our food to keep their population compliant; we need to deny them access to that resource. The Viet Cong moved artillery shells on bicycles for goodness sakes and the population dug tunnels to hide in. I believe that thermite will be this war’s most potent weapon. I do not think we will see a single Chinese person for the next two years. What we really need is an unbreakable communication system across the state that even the NSA can’t break and somehow get everyone on the same communications hub.”
“How the hell do we do that?” Duncan asked.
“There are three ways,” the author said. “There is a dedicated hard line that goes between points without any automatic switching gears in between, a dead language or cultural language that only a few people speak, like the World War Two Wind-talkers, or one-time single use cipher pad codes. If the internet stays up, which is unlikely, then we could use that.”
Mitch stood up. “Thank you, everyone. We will have daily briefings from here on out at 0700. Tell your people about the imminent financial crash but leave the opinions and hypotheticals out of the equation.”
Mitch returned to his condo, gave his two kids, a boy of four named Aiden and girl of two named Cassie,
a kiss. He gaveDuke, their Scottish deerhound, a pat. Duke came with Mitch and Melanie into the field whenever they were outside the wire but stayed within two feet of the kids whenever the two were at the Retreat. Duke knew where free food came from.
Mitch returned to the virtual office and kept watching the news feeds and the pundits’ commentary on what was happening in the financial markets. Mitch knew and he knew that every bank and trading house knew that this wasn’t just the beginning of the end, it was the end of the end of his beloved financial market. The people running the government had chosen personal power over service to the people. They were the new monarchs and were about to follow the fall like so many other monarchs around the world throughout history whether it be the Romanov Tsars, the Emperor Kaiser, the Chinese Emperor dynasties or the Emperors of Japan. Mitch thought the French did it best and the guillotine was too good for the monarchs of Washington D.C.
The next day saw the Stock Exchange limit down within three minutes of opening. There was a classic run on the banks as depositors sought to withdraw their money but banks never opened. Large cities had riots and looting and many banks were burned to the ground. Police officers stopped showing up for work because they were not getting paid and America lost its collective mind. The nanny state was over. On the fourth day the President threw in the towel. Mitch, Melanie and Duncan watched the speech with Amy, Duncan’s new wife.
“My fellow Americans,” the President said, “it is a sad day for America as I have to inform you that our country is bankrupt. We do not have the money to pay our debts that have come due. We have decided to work with our creditors and they are being very generous with their terms. The Government is officially declaring martial law and the Constitution has been temporarily suspended. The Government is invoking the War Powers Act and all businesses and bank accounts have been seized to pay our creditors. The Government has also sold all its military hardware and bases to its creditors, America has disabled its land based nuclear weapons and all nuclear submarines have been given free passage to international waters. If any country uses nuclear or biological weapons on the United States then the submarines are authorized to return fire; they are there to ensure the safety of Americans. All Americans are required to return to work for their regular shifts and curfews have been put in place in all areas. There will be no warnings; if you loot, riot, protest or are out after curfew you will be shot. All rights of Habeus Corpus and citizen legal rights are hereby suspended. All regular military personnel are hereby relieved of duty and will exit their bases immediately. All reserve military units are hereby disbanded. We have asked the UN to provide security services to appointed district managers. We have made a substantial dent in our nation’s debts by enacting these policies. If the economy continues on its current path then we will have fully paid our debt in six-months’ time. We need to pull together as Americans and honor our commitments to our creditors. The sooner they are paid in full, the sooner we can return to normal. That is all, good day and God bless America.”
The Retreat Page 8
