by D. R. Bell
“So you plan to finish their work?”
“We’ll try. David thinks he might be able to replicate some of the algorithms. He’s been reading Marchuk’s dissertation. I’ll play Schulmann, he’ll play Marchuk.”
“Oh, man. You better hide well.”
David sipped his coffee while looking over the boats in a small marina. It was surprising how infrequently he thought of his job at Space Systems and his place back in LA. There was a certain irony here: the things he endured and obsessed over a few short weeks ago were unceremoniously left behind and did not matter at all. He felt guilty about his parents and carefully sent them a couple of e-mails, but did not respond to their questions except repeating that he was fine. He did not really know who he was any longer, but he knew he had work to do. Yes, Oleg was right, he and Maggie had better plan to change identities again, place another barrier before their pursuers.
He thought out loud: “This is not the end …”
Sainte-Luce, Martinique
A man in a straw hat and sunglasses was one of many enjoying his coffee with a baguette on this sunny morning. Nemzhov had always liked the Caribbean, and it seemed like a good place to hide out for a while and prepare for the next step. It was convenient to come here from Paris with an EU passport after visiting Switzerland. It had always been a part of his “if shit hits the fan” plan. The disappearance of Ferguson and Sappin was the first domino falling. Not being able to find them after ten days of intense searching was the second. There was an unconfirmed sighting in the Chicago O’Hare, but the trail went cold and they did not get the names. Then, despite his orders, John Platt was assassinated. He knew he was losing control and his sense told him to get out. He warned only a half-dozen others, and all of them escaped. As could be expected, the cowards in the Kremlin were now sacrificing him as a “rogue element.” He snorted at “rogue.” As if they did not approve the plan!
He managed to get much of his money out, but that was not the point. It was the rush of power that he craved, the rush that couldn’t be satisfied with money alone. He’d lied to Ferguson and Sappin that this was not about revenge. Of course it was about revenge, first against the arrogant Americans, now also against the spineless Moscow bureaucrats. And Ferguson and Sappin. He’d thought he figured them out, but they played him for a fool—and nobody makes a fool of Nikolai Nemzhov and gets away with it. He knew he was going to be hunted, but he was going to be a hunter as well. He had over a hundred million at his disposal, and he figured that with the ones he helped to escape —who likely longed for revenge as well—they had close to a billion.
Nemzhov closed the newspaper with its screaming headline. He lost the battle, but the war was not over yet.
“Plus de café, s'il vous plait.” He motioned to the waiter and said under his breath, “This is not the end.”
COMMENTARY
The events described here are fictional. There is no hindsight when the setting is in the future. But one can argue that the seeds of such events had been planted by the summer of 2013, when this book was written. Will the seeds grow the way that this tale hypothesized? One hopes not. But hope is just that, hope. What can’t last, won’t last, and one can kick the proverbial can down the road only so long. To the author’s knowledge, all the facts prior to July of 2013 are reproduced faithfully.
On US debt and debt/GDP ratio
US GDP by years: $14T in 2007, $14.4T in 2008, $13.9T in 2009, $14.5T in 2010, $15.1T in 2011, $15.7T in 2012, estimated $16T in April 2013.
US National Debt by years: $9T in 2007, $10T in 2008, $11.9T in 2009, $13.5T in 2010, $14.8T in 2011, $16.1T in 2012, estimated $16.8T in April 2013. Source: http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo5.htm
GDP growth from 2007 to 2013: $2T, or 14%.
Debt growth from 2007 to 2013: $7.8T, or 87%.
US Debt/GDP in 2007: 64%. In 2013: 105%.
Projected US budget deficit for 2013: $1.04T (April estimate).
US unfunded liabilities in 2013: $123T ($85.8T Medicare, $21.6T Prescriptions, $16.3T Social Security). Source: http://www.usdebtclock.org
On US dollar as reserve currency
While we have gotten used to having the US dollar as the world’s reserve currency and some people believe that it will continue indefinitely, it was not always so. Over the past six centuries there were five other reserve currencies, each lasting about 100 years. When the US dollar is ultimately dethroned as the world's reserve currency, many will claim that nobody could have seen it coming …. Except that the signs are on the wall.
From 2000 to 2010, the dollar’s share of global currency reserves dropped from 70 to 60%, while the euro’s rose accordingly. The IMF (International Monetary Fund) was planning a system of special drawing rights, SDRs, based on a basket of currencies. It looked like there would be a smooth transition to a new currency regime that would also allow the US to gradually devalue its debts.
“Is the Dollar Dying? Why US Currency Is in Danger”
Source: http://www.cnbc.com/id/100461159
“Few would dispute China's end goal of having its currency, the yuan, become a genuine world reserve currency. Who wouldn't want cheap access to world capital markets that reserve currency status brings? Not to mention cheaper transaction costs on international trade. Indeed most spectators also understand China's political motives in achieving reserve currency status for the yuan (more voting rights at IMF, World Bank etc.). However, what does seem to be lost on the financial world right now is how quickly they are getting there.”
Source: http://finance.yahoo.com/news/chinas-secret-ambition-yuan-075459535.html
“Year of the yuan: China's explosive currency goes global: “Degenerating credit quality across the board has prompted asset managers to shy away from the dollar, euro, Japanese yen, British pound, and Swiss franc. And some are turning to the yuan, a currency that 10 years ago was completely off limits to foreign investors. An HSBC forecast projected that by 2015, the yuan will become one of the three most used currencies in global trade, in league with the dollar and euro.”
http://rt.com/business/year-of-the-yuan-china-currency-goes-global-561
“China is buying crude oil from Iran using its currency the yuan.”
Source: www.bbc.co.uk/news/business-17988142
“Australia and China To Enable Direct Currency Convertibility.”
Source: www.theaustralian.com.au/national-affairs/foreign-affairs/pm-set-to-sign-china-currency-deal-in-boost-to-exporters/story-fn59nm2j-1226609244139
“India, Iran to settle some oil trade in rupees.”
http://www.reuters.com/article/2012/01/20/india-iran-idUSL3E8CK3C120120120
“France plans currency swap line with China.”
Source: http://www.reuters.com/article/2013/04/13/us-china-france-currency-idUSBRE93C01S20130413
China Names Yuan Convertibility Plan Among This Year’s Goals.
Source: http://www.businessweek.com/news/2013-05-06/china-names-yuan-convertibility-plan-among-goals-for-this-year
Chinese Renminbi overtakes Russian Rouble to reach #13 as a World Payments Currency.
Source: http://www.swift.com/assets/swift_com/documents/products_services/monthly_RMB_tracker_Feb2013.pdf
CENTRAL BANKERS are preparing to welcome the RMB as an emerging major global reserve currency.
Source: http://asiatoday.com.au/content/rmb-approaching-safe-haven-status
China and Brazil sign $30bn currency swap agreement.
Source: http://www.bbc.co.uk/news/business-21949615
Bank of France Seeking Yuan Liquidity Agreement.
Source: http://www.bloomberg.com/news/2013-05-28/bank-of-france-seeking-yuan-liquidity-agreement-for-euro-area.html
China’s Secret Ambition for the Yuan.
Source: http://finance.yahoo.com/news/chinas-secret-ambition-yuan-075459535.html
The Internationalisation of the Renminbi.
Source: http://www.bundesbank.de/Redaktion/EN/Reden/
2013/2013_07_03_nagel.html
Renminbi-yen trade growing strongly a year after launch.
Source: http://www.thechinamoneyreport.com/2013/06/12/renminbi-yen-trade-growing-strongly-a-year-after-launch
Yuan Offshore Trade Race Picks Up With Frankfurt Bid: Currencies.
Source: http://www.bloomberg.com/news/2013-07-02/yuan-offshore-trade-race-picks-up-with-frankfurt-bid-currencies.html
On the role of gold
The barbaric relic has been used as a store of wealth for over 5,000 years.
The “fiat” money has been around for 1,200 years, having originated in China. The average “life expectancy” of a fiat currency is 27 years. Out of 775 reviewed fiat currencies, 12% percent failed through hyperinflation, 21% were destroyed by war, 12% destroyed by independence, 24% were monetarily reformed, and only 23% are still in circulation (source: DollarDaze.org). The purchasing power of the dollar has decreased by more than 95% since 1913 (source: http://blogs.wsj.com/wallet/2009/01/28/the-buying-power-of-a-dollar-on-a-downswing).
“In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold......The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists' tirade against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as the protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard.” Alan Greenspan, “Gold and Economic Freedom”, 1966 (source: http://www.constitution.org/mon/greenspan_gold.htm).
For 100 years, from 1834 to 1934, every US dollar was exchangeable into gold, at the rate of about $20 per ounce. Then again, after the Bretton Woods accord US dollars were convertible into gold at $35 per ounce until Nixon put an end to it in 1971.
“How much gold China has and how much gold China wants? “Officially” China’s gold reserves stand at 1,054, and this number has not been “updated” since 2008. It’s annual gold mine production is estimated at over 400 tonnes per year. None of this mined gold ever leaves China. Indeed, it is doubtful if any reaches their own domestic market. To service the private demand of its own citizens; China imports vast quantities of gold – now rivaling the near-legendary appetite for gold of India (and Indians).
By 2011, China’s gold imports had already soared to more than 800 tons per year (source: http://www.bloomberg.com/news/2013-02-05/china-gold-imports-from-hong-kong-gain-to-all-time-high-in-12.html). However, while India produces practically no gold of its own, China is the world’s #1 producer. Clearly, China’s mined-gold is the government’s gold. This brings us to some number-crunching. From the beginning of 2002 China has produced approximately 3,600 metric tonnes of gold. However it has only reported a total increase in its “official” gold reserves of roughly 650 tonnes.
Even if we assume that some of that remaining 3,000 tonnes of gold-production leaked into its own domestic market (despite the best efforts of China’s government); there is a vast amount of mined gold in China which has not been accounted, and we must strongly suspect that most/all of that gold is securely stored in government vaults. In other words, instead of having only 1,054 tonnes of gold reserves it’s quite possible that China could have as much as four times that amount: 4,000 tonnes.” Source: www.etfdailynews.com/2013/05/03/chinas-real-gold-reserves-at-4000-tonnes
China reportedly planning to back the yuan with gold. Source: http://rbth.asia/business/2013/07/17/china_reportedly_planning_to_back_the_yuan_with_gold_47997.html
The China Radio International sponsored newspaper World News Journal (Shijie Xinwenbao) (04/28): "According to China's National Foreign Exchanges Administration China 's gold reserves have recently increased. Currently, the majority of its gold reserves have been located in the U.S. and European countries. The U.S. and Europe have always suppressed the rising price of gold. They intend to weaken gold's function as an international reserve currency. They don't want to see other countries turning to gold reserves instead of the U.S. dollar or Euro. Therefore, suppressing the price of gold is very beneficial for the U.S. in maintaining the U.S. dollar's role as the international reserve currency. China's increased gold reserves will thus act as a model and lead other countries towards reserving more gold. Large gold reserves are also beneficial in promoting the internationalization of the RMB." Source: http://cables.mrkva.eu/cable.php?id=204405
Arizona lawmakers pass bill making silver, gold legal tender. Source: http://www.reuters.com/article/2013/05/01/usa-arizona-gold-idUSL2N0DI00Z20130501
On the secession attitudes in the US
In 2012 there were almost a million secession petitions signed in all 50 US states, with 125K coming from Texas. Yes, there is no right to secede in the Constitution. But then, there was no such right back in 1861 and it took a bloody war to stop the breakup. As one writer put it, “Breaking away is impossible … So was dancing on the Berlin Wall.” His point is valid: very few anticipated in 1980’s that the Soviet Union will break up in a few short years. And one can’t predict what another crisis will do to an already divided country.
Some links of interest:
http://en.wikipedia.org/wiki/2012_state_petitions_for_secession
http://www.nytimes.com/2013/01/16/us/politics/texas-secession-movement-unbowed-by-white-house-rejection.html?partner=rss&emc=rss&utm_source=dlvr.it&utm_medium=twitter&_r=1&
http://www.salon.com/2013/02/14/what_would_it_look_like_if_red_states_actually_seceded_partner/
http://www.amazon.com/Bye-Miss-American-Empire-Neighborhood/dp/1933392800/ref=sr_1_1?ie=UTF8&qid=1367735290&sr=8-1&keywords=bye+bye+miss+american+empire
On tracking people by their cell phones
If a cell phone is turned on, it constantly registers its location with cell phone networks. All cell phone carriers implemented location-based services (LBS) that rely on this capability. Anybody who gains computer access to cell phone networks infrastructure technically can track active phones in real time. It is widely known that the government (FBI, police departments) track cell phones, possibly without a warrant: http://www.wired.com/threatlevel/2012/08/warrantless-gps-phone-tracking. There are services, such as https://www.lociloci.com/us/cell-phone-tracking that do it for $5/mo but they obviously require explicit permission.
How can someone not directly affiliated with law services or with the wireless carrier track your location? There are a number of scenarios: 1) using social media services, 2) installing spyware on the phone, and 3) gaining access to LBS servers by pretending to be a legitimate service or by breaking the network’s security. The description in the book assumes the latter case.
Some people assert that a phone can be tracked even when it’s turned off, e.g., http://www.huffingtonpost.com/larry-bodine/big-brother-is-definitely_b_1799521.html, http://news.softpedia.com/news/The-NSA-Can-Track-Cell-Phones-Even-when-Turned-Off-370225.shtml. Theoretically, this is possible, depending on how a phone is implemented. Only removing the battery and/or placing the phone into an environment where electromagnetic waves can’t penetrate would assure that your phone can’t be followed.