Winter Kill 2 - China Invades Australia

by Gene Skellig

  “She’s going to default on the Chinese debt.”

  “Oh. Shit,” was all that Carl could say. He knew full well how badly that would affect the state of affairs within the region. “So will we be going to war with China?”

  “Nope. That’s the beauty of it. We’re going to give them a shitload of the new G-dollars, like the Canadians are doing with their new gold-backed dollars. Only we’ll be doing it on an unprecedented scale. China will come out of this smiling prettily, as we’ll be quietly paying them off in gold while the rest of the world, and the US population back home, are stuck with the worthless old currency,” O’Connor said, excitedly.

  “Doesn’t that mean that the shit storm is going to happen back home then? And not out here? We could be facing civil war if we screw our citizens, and reward China like that.”

  “Hey, don’t look at me. I’d much rather go to war with China than fuck our citizens like that. But that’s the plan. Avoid war with China at all costs, re-establish trade and commerce, so that our currency comes out on top. Then, once it’s re-established itself as the global reserve currency, you know what comes next, don’t you?”

  “Yeah, sure, we go back off the gold standard, and try again with a fiat currency, get the printing press going full tilt. So how does it start back home?”

  “Like the last time, in 1933.”

  “Confiscation of all privately held Gold in the United States,” Cark said, with shock. “Holy Shit! That’s it. That’ll be the event that upsets the applecart. And I suppose the Chinese have already been told this?

  “Yup. Why do you think Sec State Webber was in Beijing before he came here?”

  “So we’ve got nothing to fear from the Chinese on this? We just don’t have the economic might needed to compete with them in their back-yard, so we have to save our economy without pissing them off. We try to balance them off through this network of military cooperation with our friends, especially Australia. Maybe later we’ll be in a position to push back, but for now, we try to keep the Chinese addicted to our consumers – keep that ‘Chimerica’ relationship going. So, The real threat is our own citizens back home…” said O’Connor, with sickness in his stomach. He slouched back in his seat, deflated.

  O’Connor got out of the vehicle without saying another word to Carl. With the Secretary of State now boarding, it was time for O’Connor and the other passengers to board, for the long flight back to the US.

  As far as CIA operations in Australia, there really was nothing more to be said.

  Secretary of State Webber was happy to be leaving Canberra. He had accomplished what he had been sent to negotiate and was looking forward to getting back to Washington, as much to be with his wife as to being back in the fray with the rest of the Parker Cabinet.

  The 14 hour flight to LAX would be easy to endure, thanks to the comfort of the blue-and white modified Boeing 757-200 that had been something of a home-away-from-home for James Webber and his entourage for the lengthy Pacific Rim junket.

  As he paged through the electronic documents on his laptop he reviewed the post-encounter notes his staff had generated during the trip. After reviewing them, and recalling the face-to-face meetings he had had in China, Japan, South Korea, Indonesia, the Philippines, Taiwan, Singapore and finally, Australia, he could not help but allow himself a bit of pride for the success of the mission.

  While the truth of it would never see the light of day, the strategic objectives had all been achieved, and America’s allies in the region had had an opportunity to press the United States for stronger military ties.

  It was all about China. With last year’s collapse of the old US currency, and the continued dislocations within the global economy after several years of lurching from one financial crisis to another, restoring trade relations with China – while at the same time attempting to contain China’s expanding influence in the region – had been a delicate balance.

  The secret currency-swap between the US and China, with the new gold-backed currency intended to bring much needed liquidity back into the badly broken trading relationship, was well received in China. Once the gold-backed dollar was announced in the coming weeks President Parker would be lauded for saving the world from total economic catastrophe. The new currency, the gold-backed US Treasury Dollar, or $G USD, would restore the dominant position of the US in international commerce, and start a wave of fiscal reforms the world over, with all major economies abandoning the Ponzi scheme of the fiat currency construct. At least for a while, anyhow, reflected Webber.

  The trillions of dollars of debt denominated in Federal Reserve notes were about to be made worthless when President Parker outlawed the Federal Reserve cartel. This would amount to an absolute default on all sovereign debt. That’s why Webber had been sent to Asia; to negotiate a secret deal with China and to mislead some and inform other allies in the region.

  The Chinese premier had pretended to be surprised at the news, but also, strangely, was well prepared to discuss the mechanics of the currency exchange that Webber was to propose. They had immediately embraced the swap of worthless Federal Reserve Notes for the new $G USD, and promised to use the new gold backed “Dollar Gold” notes to maximum effect, in coordination with the President’s coming announcement. They went so far as to provide Webber a copy of the text of the announcement which they would make, applauding the United States for taking such courageous action to restore global currency markets. It did seem strange to Secretary of State Webber that the Chinese had all of this prepared ahead of time, but he attributed that to the possibility of their having been given advance warning of the nature of the Sec State visit through diplomatic channels. He did not even consider for one moment that the Chinese had so thoroughly hacked into, compromised and otherwise infiltrated the communications systems of the United States as to have full knowledge of just about every important secret communicated between any agencies of the government of the United States.

  For the Chinese, light-years ahead of the United States on state-controlled manipulation of information technologies, computer hacking, and espionage, nothing that Secretary of State Webber had to say had come as any kind of surprise.

  What was surprising to the Secretary of State was the speed with which the hundreds of billions of $G USDs would be injected into the global financial system.

  From what the Chinese had said, the money would first appear in contracts to get the profoundly under-utilized commercial shipping sector moving again, with global commodities contracts to be snapped up by China. The massive ships would once again be fully engaged in moving the commodities of the world to the dormant factories of China, Japan, Korea, and other Asian countries. Chinese economists had briefed that once the Chinese begin to spend the new G$, the Baltic Dry Index would show an impressive 40% jump in just the first two weeks after currency reform and currency swaps with China and America’s other trading partners was initiated.

  They went so far as to provide Webber with a summary of projected rises in stock market indices, and which multinational corporations would benefit most, just in case Webber ‘had friends he wanted to reward’, as the Chinese had put it.

  While personally offended by the openness of the Chinese assumption that he would be so corrupt, he did not waste much time debating the ethics of it. He had immediately informed his friends and his broker, using the communications equipment aboard his Boeing 757 for a few personal calls. Of course, he made sure to call on a few CEOs in the investment banking sector, who he knew had also been briefed-in on the new currency, hoping to curry favor with them by sharing some of the Chinese projections. Could come in handy later, when I start fund-raising for my presidential bid, he thought to himself.

  Returning his thoughts to the deft application of power and influence that he was at the center of, he thought about how swiftly the Chinese would do their part. He imagined the positive knock-on effects that the Chinese surge in commodity purchases would have on the commodities-producing nations, s
uch as Canada and Australia, who would quickly ramp up production to fulfill the massive influx of orders from China. Even in the beleaguered US manufacturing sector, an unprecedented surge in orders for American-made automobiles – mostly SUVs and pick-ups – as well as commercial aircraft, would benefit the US economy right from the start. A series of large orders of vehicles, aircraft and other manufactured goods had also been penned during the Secretary of State’s secret visit to China. It would be an economic stimulus of astonishing proportion, “economic shock-and-awe”, as Parker had put it.

  That had been two weeks ago.

  By the time the Secretary of State had arrived in Canberra, still a dozen days before the official announcement, the global financial sector had already taken an uptick, likely due to the smaller surge of investments being made by insiders the world over who were positioning themselves to benefit from the official announcements to come. Not a problem, thought Webber, as long as the general population does not catch on to the profiteering of those of us in the know. Who knows, Webber rationalized, maybe the profiteering would make the stimulus that much more effective. Thinking like that really took the sting out of any ethical debate that may have been going on in his subconscious. Maybe what I’ve done really is not wrong after all, he thought to himself reassuringly.

  President Parker had pinned her entire administration on the economic boom expected to follow the currency reform, when she had taken the gamble of essentially giving China and other creditor nations the bulk of the American gold reserves, in the form of the gold-backed currency. Were China to hoard the notes, or redeem them for physical gold, the new currency would fail just as the former president’s “New US Dollar” had failed the previous year. Parker had determined that she would have to order the confiscation of all privately held gold bullion and coins, to coincide with the release of the new gold-backed currency. There simply was not enough gold left in the treasury to back the new currency. So they would have to put some Draconian practices into effect, imprisoning a few gold hoarders in the first few days, to put fear into the population at large and to motivate compliance with the confiscation order.

  But now that the Chinese had promised to play their part, it was clear that President Susan Parker’s gamble would work and that the new $G USD would instantly become the global reserve currency and stop the American slide into anarchy and civil war that, by all accounts, was otherwise inevitable.

  Those economic and trade issues had been only half of the story. The corresponding military dimension, perhaps the more urgent motivation for his junket in Asia and Oceana, had been a much more delicate matter.

  If global trade was about to restart, then the global trade routes would be where the dust would settle. If China were not contained, and American hegemony in the region were not restored, than China would have America – and the world – by the balls.

  But with shortages of fuel, spares, and the draw-down of military personnel over the recent years of unproductive austerity; and automatic budget cuts having wreaked havoc over procurement and routine maintenance of their war-fighting apparatus; the American military simply did not have the global reach and expeditionary power projection capabilities it once had. The example of the USS Miami, a Los Angeles class nuclear powered attack submarine that had been damaged in a fire a few years ago, and not repaired due to budget cuts, was a prime example of an essential war-fighting capability that was simply allowed to go un-repaired. It reminded Secretary Webber of the decade after the fall of the Soviet Union, when the world’s number two power had gone broke and allowed her once great military to ‘rust out’, her armed forces becoming a tragic joke.

  And just as Russian President Ivan Valeriovich Dvorkin had begun when seizing power after the Putin assassination, President Parker and her cabinet had put the restoration of the American military as her highest priority, albeit after the restoration of sound money.

  America was still the most powerful nation on earth, but no longer had the resources to offset China’s massive military buildup. So by virtue of many small bilateral agreements with allies in the Asia Pacific region, the American ‘pivot to Asia’ strategy had been to build a grand alliance of nations who could each contribute key components of a power block, with American in overall command.

  Taiwan and Singapore were still armed to the teeth, representing a constant annoyance to China. South Korea and Japan were staunch American Allies and hosted a robust American military presence.

  A recent conflict between Japan and China over the otherwise worthless Senkaku/Diaoyu Islands had almost provoked a war that would have drawn the US into direct confrontation with China at just the wrong time. Washington had applied extraordinary pressure to convince Japan to back off, and let China seize the tiny, uninhabited rocks in favor of cooling tempers and garnering some good-will from the Chinese. To Secretary Webber, however, the move could have been as foolish as attempts to appease Adolph Hitler in the years prior to the Second World War. There had been one positive aspect of the Diaoyu Islands crisis, he reflected, in that the US had a pretext to beef up the Seventh Fleet and the number of troops permanently stationed in Japan and South Korea.

  The impoverished Philippines, having had enough of Chinese espionage and heavy-handedness over disputed islands in the South China Sea, and Chinese moves to extract under-sea resources, had expanded their military ties with the United States, accepting billions of dollars in military aid which, comprised of small arms and transport capabilities, bolstered the number of men under arms who could be counted as solidly US-friendly.

  Lacking the natural resources and strategic location of their more China-friendly neighbors in Indonesia, the Philippines were playing the only card that they had left, and improving the quality of life of their citizens just enough, through American food-aid, to hold their one hundred million citizens happy enough that they would not embrace the Islamicism that had so destabilized other south Asian nations.

  In exchange, the Philippines agreed to work with the Americans on a few unique capabilities, keeping the potential conflict with China in mind, and had also agreed to provide additional bases for American Naval, Air, and ground forces.

  Indonesia, located between Australia and the Malay peninsula, was the most strategic of the south Asian nations he had visited. It straddled the shipping lanes between the western Pacific Ocean and the Indian Ocean – the direct link from the Persian Gulf to Asia. Once a staunch military ally for the U S, Indonesia had become increasingly independent, charting their own course. Playing both sides for the maximum economic benefit, the Indonesians had continued to accept American military aid, but were far more involved with economic partnerships with mainland China. China would fund, plan, and construct major infrastructural projects in exchange for guarantees of long-term supplies of the agricultural, mineral and oil resources which Indonesia possessed.

  The world’s most populous Muslim nation, Indonesia’s two hundred and fifty million inhabitants were becoming increasingly anti-American, resenting any effort to sway them from becoming a major economic and military presence in the area.

  Despite his best efforts, the best that Secretary Webber could achieve on his 3-day visit was to have the Indonesians agree not to shut down several American factories, such as the iconic soft-drink factory in Jakarta that had been symbolic of American cultural dominance. For this, he had been forced to agree that the American Embassy in Jakarta would be moved from its prominent location on the Jelan Medan, at the south end of the Merdeka, to be relegated to second-class status and moved to the banking district along Jalan Kebon. It was deeply offensive to the Americans; however, it did allow for a comprehensive re-design of the new embassy, which would allow for greatly improved security features. What really put salt into the wound was that the original US embassy site would be demolished by a Chinese-owned construction company. The contract to build a new, and by all accounts impressive, venue to rival the art gallery, museums, embassies and palaces of the embassy
district would be another Chinese firm. And the new inhabitants of this glorious building would be a new Chinese Embassy.

  When he had heard that, feeling the acceleration of the Boeing as it climbed out of Soekarno Hatta, the Jakarta International Airport, the sinking feeling that pulled him down into his seat was not due to the acceleration of the jet. It was his realization, we are truly fucked in Indonesia.

  When word of this had spread throughout the aircraft, on the flight from Jakarta to Canberra, it took a toll on the diplomats. Fortunately, their visit to Australia had gone much better.

  With Indonesia now solidly out of the American sphere of influence, Australia was now the most strategically important ally in the region. Also in close proximity to the shipping lanes from the Indian Ocean to the South China Sea, and with her treasure trove of commodities, Australia had agreed to commit the Royal Australian Navy and Royal Australian Air Force to a wartime role of interdicting of Chinese shipping. They had also agreed to increase the number of P-3C Orion antisubmarine warfare aircrews, to be ready to hunt for China’s increasingly capable fleet of SSK diesel, SSN nuclear, and SSBN ballistic missile submarines.

  Thinking of the naval warfare strategy, the Secretary of State put his mind to the question of Australia’s problem with their Air Warfare Destroyer program. Only one of three Hobart class destroyers had been launched, with the second one falling even farther behind schedule at the Osborne Shipyard near Adelaide. With some of the hull modules manufactured at two other Australian shipyards and a few coming from as far away as Spain, there were all sorts of problems when the large blocks did not fit together correctly, completely stalling the project time after time.

  The Australians had gone against the American’s advice back in 2008, when they had chosen a Spanish hull design and attempted to cobble together enough shipbuilding capabilities in Australia rather than add their order to the renewed production run of the highly reliable American Arleigh Bourke class. With another 16 such hulls coming out of the shipyards in Maine and Mississippi over the coming years, enough to keep the shipyards working at least part time during these years of austerity, and with no major changes to the highly successful hull design, the Australians could have given the shipyard some much-needed orders and benefitted by avoiding all of the teething problems they were having, and they could have avoided a decade of delays and skyrocketing costs.