by James Rosone
The President surveyed the room for a minute, gauging the mood and response thus far to this extraordinary legislative agenda being discussed. For the first time in who knows how long, the leaders of America were talking civilly about how to address the problems facing the country and coming together with solutions to fix them.
“Monty will hand out the next set of folders; I would like to discuss the new monetary policy.” He motioned to a new player in the room. “Joyce Gibbs, our new Treasury Secretary, will lead the next discussion and explain how we are going to restructure our debt and rebuild our currency. Before we begin, let’s take a short 30-minute break. We have some sandwiches and drinks being brought in as well.” The President nodded towards an aide just outside the door. As the group began to stand and stretch, the President stood up and walked into the hallway to talk briefly with Secretary Gibbs.
“Joyce it’s good to see you. Everything is still ready on your end, correct?” asked the President nervously.
“Yes, Mr. President. The markets will be closed tomorrow and will remain closed until Tuesday. This will be more than enough time for us to have the initial batches of the New American Dollars (NADs) ready for circulation. Within two weeks the banks will only have NADs for distribution to the general public. We anticipate it will take us about six months to fully convert all of the world’s dollars to the NAD,” Joyce said with excitement in her voice.
“Do we really have the needed gold to cover the currency? I heard that part might be a bit iffy,” the President said.
“We just secured the last order of gold needed to cover everything. Short of several countries actively trying to convert all of their NADs into gold, we should be fine. Even if they tried that, we have sufficient rules in place to ensure they are not allowed to receive any new NADs unless they back their request with gold. Most people, even in the government, do not realize how immense the gold stashes held by the Federal Reserves are.”
The President seemed to relax as he replied, “Excellent. When the break is over, I’ll introduce you again to everyone and then you can begin to inform them their world is about to completely change.” Stein let out a slight chuckle.
“Yes, Mr. President.”
Joyce Gibbs had been a long-term member of the Federal Reserve, and was an outspoken critic of the previous administrations’ continued use of quantitative easing and of the government printing money and then buying and issuing debt with that new currency. She had been a strong advocate for a return to the Gold Standard and a massive restructuring of America’s debt and currency. When the Freedom Party formed, Joyce provided then-Governor Stein a lot of economic advice. So, when Stein became President, she was his obvious first choice for Treasury Secretary.
Once the break concluded, the President signaled for everyone to take their seats as he introduced the new Treasury Secretary again. “Joyce, if you could go over the new monetary policy for us…” the President indicated as he took his seat at the center of the table.
“Thank you, Mr. President, for allowing me to address in private the senior leaders of the Congress. I feel this is important to discuss discretely as these changes are going to have a profound effect on everyone and the economy.”
Secretary Gibbs continued, “The US Dollar, along with the other world currencies, have been in a race to the bottom for decades. As a consequence, they have been so devalued as a means of dealing with their sovereign debts and increasing their own domestic exports that drastic actions need to be taken to right the global currencies.”
“Economists have warned in the past that we are on the verge of a hyperinflationary event; if that happens, I believe it will not only destroy the dollar, but will cause the world currencies to completely collapse. The depression we have been experiencing--and still are--will become even worse as society will soon have no means to conduct commerce except through direct trade between parties. The proverbial ‘can’ may no longer be kicked down the road.”
“This needs to be solved, and with the leadership of President Stein, we are going to resolve it. However, what we are proposing is also going to cause certain short-term problems and have an enormous ripple effect in the market and around the world. If we are to right our financial house (and the world’s), then it is necessary.”
Pausing for effect (and to collect her thoughts), Joyce looked at the President before letting the other shoe drop. “The Treasury is going to begin printing the New American Dollar or NAD. The old US Dollars will be converted to new NADs at a price of five old US Dollars for one NAD. As you can imagine this will have a profound impact on people’s savings accounts, debts/loans, 401ks and investments; it is also going to shore them up. The NAD will be pegged to the price of gold, and will initially be set at $8,500 NAD per ounce, but the currency will be allowed to fluctuate with changes in the market. The Federal Reserve has enough gold at the new NAD price to cover the currency that will be in circulation and the Federal Reserve will have preferential buying power within the US to purchase gold at the new NAD price and will do so on a continual basis to stabilize the NAD and increase its value.”
Monty raised his hand to quickly interject, “--People will still be allowed to own and purchase gold; we do not want anyone to think this is like 1929 all over again when the government required people to turn in their gold and made it illegal to own it. People can turn their gold in for NADs if they would like, but they will not be forced to do so.”
Secretary Gibbs smiled at Monty and thanked him for clarifying a point she had forgotten to mention. “The Treasury will begin printing the NADs in enough quantities to absorb the number of US Dollars in circulation and allow foreign governments to have ample time to convert the old currency over. I’ve also worked with the Federal Reserve, and they will reduce interest rates from 18% to 6% to lower the borrowing cost for people and businesses. This is an aggressive and radical approach; however, we believe it is time to start thinking unconventionally and try something altogether new,” said Secretary Gibbs as she reached for a glass of water.
Seeing an opening to talk, the Speaker of the House interjected, “Madam Secretary, I’ve read your research papers on this idea when you proposed it while working at the Federal Reserve five years ago. Won’t this cause some problems with our creditors abroad?”
“Mr. Speaker, this will cause some of our lenders to become angry, yes--but there is simply no way we can repay what we owe, and neither can they as long as we continue to operate on the old currency. A new balance needs to be struck to right the worlds’ currencies. This endless circle of debt has finally caught up with the world; through this currency revaluation and conversion, a sound fiscal policy for the world currencies can begin.”
“I am not naïve enough to believe this will not cause problems in the global market, and I do foresee foreign governments not lending new money to the US for a while. In all reality, we can’t borrow enough to keep up with the current inflation of our own debt payments. The creation of AFC and the new tax code will help to balance our budgets, but it will take a couple of years before we see the full effect. At this moment, with the current financial situation we find ourselves in, we have to do this,” said Joyce.
“When is the Treasury going to announce this change?” asked the Speaker.
“This evening, after the market closes--this is why it was imperative to speak with you all today. We couldn’t inform you sooner for fear of it being leaked while the markets are still open. The U.S. markets will remain closed tomorrow and will not reopen until next Tuesday…when they do open, they will reopen with the new values displayed,” said Joyce. Clearly annoyed at this new information and drastic monetary change, Senator Landrew pouted, “I really wish you would have consulted us about this before you unilaterally made the decision to do this. I mean, this is the end of the first full week of your Presidency, and already you are one-sidedly making a decision that is going to radically change the country.”
Seeing that the conversa
tion was about to get nasty, the President interceded for Secretary Gibbs and cut in. “Senator Landrew, in all reality, would informing you have made any difference? It only would have allowed for people to disclose the information to the media, and that would have further hurt the economy, if not crashed it. This had to be done in secrecy,” said the President.
Considering that the Republican and Democrat Congressional leaders were clearly feeling blindsided with this new monetary policy, the President quickly moved to end the meeting and to incorporate them into the implementation of the various plans and policy directions discussed throughout the day.
“We’ve talked about a lot of information today, and we have a lot more details that need to be gone over. I’m going to ask that you all stay into the evening tonight so we can work as a team to begin putting these ideas into action. Senator Landrew, I would really appreciate it if you could help to lead the discussion and plan on how AFC can conduct environmentally-friendly ways of drilling for oil and natural gas. I would also like your input into the renewable energy aspect of this plan. Your insight would be greatly appreciated.”
“Thank you for the offer Mr. President. It would be an honor,” said Senator Landrew, who still looked a bit angry over the financial news and not being able to spread the word to her contacts before the changes went into effect. She knew that her constituents and donors would make her pay for this transgression.
The President was clearly tired, but excited that the plans had been disclosed and put into motion. “With that being said, I will return later in the evening to see what progress has been made before dismissing everyone for the evening. I will need you all back here again tomorrow for the entire day while we work out the rest of the details. We are radically changing our economy and financial system, so we need all hands on deck. I’ve asked the kitchen to prepare everyone some “good brain food” for the next couple of days, so we won’t have to worry about anyone’s energy level.” said the President, hoping to soften the blow of all of the changes by diplomacy through good grub.
“Yes Mr. President,” responded the team.
Kings and Pawns
It’s no surprise that the introduction of the New American Dollar came as a complete shock to the world markets and governments when it was announced that evening. Over the weekend, the 24 hour news cycle painfully dissected every ounce of the decision. The logic and reasoning for it being done was sound; however, the effect it was having on a number of countries was concerning. China did not have a choice but to accept the change, but they did call America’s debt…this meant the US would now be making double payments in an attempt to meet their demands. As expected, no country in the world would lend credit to the US, and many countries insisted that America repay their debt in gold as they did not trust the NAD, despite it being backed by gold.
Countries that wanted their old US Dollars converted into gold instead of NADs were allowed to do so, but were not allowed to receive any new NADs without exchanging gold at the set price. Unlike the crisis with the Brenton Woods Gold Standard, during which a country could exchange their currency for USD and then exchange that USD for gold, in order to acquire NAD, countries now had to put up gold in exchange for it. This increased the value of the NAD and made it a viable and stable currency.
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Riyadh, the Islamic Republic
Zaheer Akhatar loved being at the center of the decision making process. Being the personal advisor to the Caliph was not just an honor, but a chance to have immense influence on the direction of the country. “Caliph Mohammed, the economic ministers are in the briefing room waiting to provide you with this past year’s progress,” said Zaheer.
“Excellent. We need to continue to retool and reeducate our people if Islam is to rule the world.”
Mohammed Abbas had been the Caliph now for several years, and though a lot of progress had been made in unifying the Middle East and North Africa under one banner, there was still an immense amount of work that needed to be done. Mohammed was an economic wizard; he had spent most of his life studying economics and worked tirelessly to convert the Saudi economy from being oil-focused to becoming a dominant manufacturing and banking center. After becoming Caliph, his major focuses were on economic expansion, manufacturing and education across the Middle East and North Africa. He had secured numerous trade deals with China, Russia, the EU and South America, and had garnered a lot of economic activity for the new Republic despite most nations not agreeing with their political and religious beliefs.
Caliph Mohammed and Zaheer walked through the Grand Palace at the heart of Islamic Republic as they made their way to the formal meeting room. The Palace was made of the finest marble in the world and decorated with gold, gems, and other expensive and magnificent materials. It had taken five years to construct, and only the finest artisans were allowed to touch any part of the construction. The formal meeting room (or “council chambers” as it was starting to be called) was a fusion between the decorating sensibilities of the old world and the technologies of the current world. The Caliph walked past the long mahogany table to the golden chair intended especially for him. The other chairs in the room were made of silver and bronze, with a comfortable pillow and backrest to sit on.
The room had numerous 3D media displays that showed either TV programs or computer generated images and reports; each media device was specially placed so every person at the table had the optimal view. In the center of the table was a small holographic interface. This allowed presenters to display their brief as a floating image, and it also could be used as a 3D video phone.
Muhammad bin Aziz, the Minister of Industry, began the meeting. “Caliph, thank you for taking the time to meet with us; we have a lot of information to go over with you.”
“I hope you have good news to report; it has been five years since we took power and we need to start showing more improvements.”
“Yes Caliph. I would like to discuss our manufacturing improvements first; we have completed construction of the aircraft manufacturing plants, along with manufacturing facilities to build our new air-to-air and air-to-ground missiles. These new manufacturing industrial centers are spread throughout the provinces of Iraq, Saudi Arabia, Sudan and Indonesia. They will employ 330,000 people directly and engage another 6 million workers for supporting positions.”
“With help from our Chinese and Russian advisors, we have been converting our manufacturing capabilities towards war production at a rapid pace. We also have numerous munitions factories under construction, and the Chinese are in the process of assisting us in establishing our own ground-based laser anti-ballistic missile defense system. We believe we can have our first operational laser battery to cover Riyadh within the year,” explained Muhammad bin Aziz.
“Excellent. And how has the modernization of our armed forces been going now that the Americans are fully out of the country?” asked Caliph Mohammed. His face did not hide the fact that he was clearly impressed with the economic success being made.
“Caliph, as you know, a lot of our equipment came from the US and Europe, so replacement parts are going to be a problem since they are no longer going to provide them to us. We began leveraging 3D printing capabilities to copy and replace the parts that are not readily available. With the help of our Chinese and Russian advisors, we have begun rebuilding our armored and mechanized infantry forces in line with theirs as well.”
“We are gearing our entire military towards defending against and defeating those infidel pigs in Israel and the US. We have begun a full modernization of our air defense capability with the most advanced Russian equipment available. Russia has also offered 100 fighter pilot advisors to help train our air forces to handle the Israeli and American Air Forces,” Muhammad bin Aziz said as he laid some papers down on the table in front of them. He knew the Caliph would be pleased to reaffirm that the economy was being shaped to confront their greatest enemies.
Clearly Muhammad bin Aziz had things under
control. It was good to see that he knew how to develop the industrial capability to take on their adversaries. “All right gentlemen, continue with your current projects and report back to me at the end of next month. In the meantime, I have a meeting with Talal bin Abdulaziz, our Foreign Secretary,” said Caliph Mohammed. The group stood up in deference to their leader as the Caliph got out of his chair and exited the room with Zaheer to walk down the hall to his next meeting.
Talal was a tall man, about 6’ 1”, and weighed nearly 280 lbs. He was also a wealthy businessman who knew how to work deals and get what he wanted. When Caliph Mohammad walked into the room, Talal stood up as a sign of respect. Caliph Mohammad nodded slightly to Talal and then sat down. He didn’t need any pleasant niceties with his Foreign Secretary, so he just jumped right into business. “How are the meetings going with the other foreign heads of state? Have the other Arab countries agreed to join our great Caliphate? Also, were you able to make any headway towards establishing our free trade agreement with China and our military defense pact?”
“Caliph Mohammed, let me address these questions individually. First, I have spoken with the leaders of Yemen, Qatar, Jordan, Syria, Egypt, Libya, Sudan, Lebanon, and Tunisia. They have all agreed to join the Caliphate, and the majority of their population agrees as well. They will move to make the transition over the next couple of months.”
Mohammad Abbas nodded his acknowledgement.
“Moving to the trade agenda--the Chinese are ready for a free trade agreement with us. I am working out the final details of when such an agreement will be finalized and signed.”
“Excellent,” responded Mohammad.
“As to the defense pact, the Chinese are more than willing to share technology and military equipment with us (just as the Russians are), but neither country wants to enter into a military pact with us. Their representatives said that our intentions to destroy Israel and attack the West will draw them into a war they would like to avoid, or at least participate in at a time of their own choosing, not ours,” said Talal, apprehensive at the thought of disappointing the Caliph.
