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 conversation 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.
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.