BABE IN THE WOODS ECONOMICS
John Q. Pridger

Pridger is indeed a babe in the woods when it comes to political and economic science or theory — or, for that matter, anything else requiring a scholarly level of knowledge. So, don't bother to read this if you want any expert opinions on the subject matter. But Pridger would like to pose some simple questions, followed by some simple, babe in the woods, answers.

THE UNTHINKABLE

The unthinkable has happened. It's the year 2029, and the Stock Market has suffered a serious correction and been temporarily closed.  American troops have been withdrawn from Iraq, Iran, Syria, Saudi Arabia, Lebanon and the other Gulf States. Israel has become the last remaining friendly outpost in the Middle East. Taiwan has been occupied by the Red Army, and the United States did nothing. China, Japan, and Korea have demanded that all U.S. military bases in Asia be closed.  The European Union, joined by the Russian Confederation, has similarly demanded the removal of all U.S. troops and bases from continental Europe. NATO has been officially disbanded by the unilateral declaration of the European Union, and reorganized as strictly a Russian-European alliance. 

The European Parliament has officially declared a gold-backed Euro as the new international reserve currency, replacing the paralyzed and nearly worthless dollar.

Japan, China, Korea, and the other nations of South and East Asia have formed an Asian economic and monetary alliance in coordination with that of the European Union. Australia and New Zealand have been denied full membership, and are seeking to become members of the European Union.

The president of the United States has assumed extraordinary emergency war powers, and has used the threat of nuclear destruction of any national capital should the orderly evacuation of American troops and materiel from their soil be in any way impeded. So far, the threat has paid off, and nothing more than "Yankee go home!", "Good riddance!" or "Good-bye Great Satan!" signs have been employed against American troops and personnel.

The president is seriously considering the evacuation of Jews from Palestine, but American public opinion has thus far made such an evacuation politically impossible. The nation is still officially committed to the defense of Israel, and it is feared that the arrival of millions of Jews during the present period of economic crises will lead to massive violence. The arrival of thousands of members of the Saudi royal family had caused enough of that, though the operation had been intended to be conducted in total secrecy during the Islamic Revolution.

Al Qaeda, now openly embraced and supported by the Arab world and the Gulf States, as well as the Organization for African Unity, continue to demand that American troops and all Jews be removed from Palestine. Osama bin Laden's successors and the Mullahs of Saudi Arabia and Iran, joined by the freely elected president of Iraq, are claiming total victory over the Great Satan.

The American dollar, of course, has collapsed, having lost 95% of its value in a twenty-four month period continues to loose value in international markets. Official dollar trading has been suspended in major European and Asian markets. The price of gold, in terms of dollars, has soared to $15,000.00 per ounce.

The national debt is over a million dollars for every man, woman, and child in the nation. Interest on the national debt has long ago eclipsed the combined tax revenues of the nation, and Congress has symbolically refused to raise the debt ceiling an inch beyond an arbitrary astronomical level that had long ago become meaningless. Finally "the full faith and credit" of the United States of America had become worthless.

In short, the United States of America is bankrupt and has officially declared as much — the national credit destroyed as far as all competing nations are concerned. 

The nation is in default on its foreign obligations as China, Japan, Germany, and several other nations react in angry dismay at the news that their U.S. Government Securities and U.S. based assets have been frozen. Though the Social Security Trust Fund is still technically solvent, there's no money in the treasury with which to make distributions.

The huge dollar denominated foreign exchange reserves in the treasuries of every nation have effectively become worthless.

The president has frozen all foreign assets and accounts in U.S. banks, including gold reserves. The assets of the Federal Reserve have been nationalized, and its Board of Governors disbanded. Major industries, including defense factories, transportation, agriculture, and food processing and distribution have all been requisitioned as national security assets under military control.

Fully realizing the nation's dependence on foreign trade for short-term economic and strategic survival, the president has declared that certain nations will have the privilege being paid in gold for the nation's strategic needs.

Fortunately, China has agreed to continue delivering the goods for Wal-Mart in exchange for Taiwan and a free hand in all of South and East Asia. Payment, however, will be strictly in coal, oil, steel, grain, or other goods. Japan and Korea, in their uneasy alliance with China has made similar agreements.

DRASTIC MEASURES HAVE BEEN TAKEN, BUT MORE ARE NEEDED

The above scenario is pretty drastic, but not at all totally inconceivable in the fullness of time. We live in a dangerous and quickly changing world — a dangerously interdependent world — one we have helped create. And, without realizing it, we have become the most dependent major nation of all.

What would be the most important single thing to be done is such a crises? The good old American dollar is no longer any good in foreign exchange. We're back on an international barter system of trade, and gold and foreign currencies are the only currencies internationally recognized — much as was the case when the nation first gained it independence.

The nation's economic infrastructure is still essentially intact. Federal Reserve Notes are still in circulation, but the nation is in serious economic distress. Vast fortunes — trillions of dollars — have evaporated, powerful corporations have imploded, and millions of people are desperate and scared.

The only short-term solution, of course, would be the nationalization of all large businesses so that all employees can be paid, and the wheels of internal production, trade, and commerce not allowed to seize up and cease to function.

Existing Federal Reserve Notes would have to continue to circulate as a new national currency is devised and put into circulation to replace it. Since the domestic economy has suddenly been divorced from the global economy, and foreign credit impossible, a strictly national currency is necessary, without any direct correlation with any other foreign currencies.

Strict national wage and price controls are necessary across the nation. And money must immediately begin to flow from the mints and Treasury to the people so that massive economic hardships including starvation might be headed off.

Since inflation had already eroded the dollar's domestic purchasing power, Federal Reserve Notes must be replaced with something that with the appearance of much greater value. The "New Greenback" is being issued at the rate of one for every one hundred Federal Reserve Notes.