The Speaker stepped before the microphones outside of his office. “Ladies and gentlemen. Today we are witnessing Washington at its finest. The bipartisan leadership of both houses is coming together to give the President the tools he has requested to confront this challenge to our country. We will give him those tools.
“What has made this possible is the very close cooperation and sharing of information that the President and his team have been practicing during preceding weeks. The bipartisan congressional leadership has been in regular meetings with executive branch officials. It is also a tribute to Washington that we have kept the substantive discussions in those meetings confidential. All Americans should be proud of how the people they sent to Washington have behaved during this time of economic challenge.
“The House of Representatives will move with dispatch. Legislation has been prepared by the Chairman of the Banking, Finance, and Urban Affairs Committee with input from the ranking member to grant the President the authority he needs. The House Rules Committee will take up this legislation within the hour. The suggested rule is that the bill lay over for twenty-four hours, to be followed by six hours of debate, three for each party. Tentatively a vote will be held in the House around seven-thirty tomorrow night. Assuming that the legislation is approved, it will then be sent to the Senate for action.”
“Mr. Speaker? No public hearings? Isn’t this unusual? It is almost like all of this was pre-wired.”
“The President and the executive branch have been working with us closely throughout this crisis. This is American government working at its best when faced with a crisis. What the President has asked for in terms of enabling legislation is very straightforward. Operationally the program will be carried out by the Treasury Department and the Federal Reserve. The heads of those agencies have also been involved in the discussion. Both the Secretary of the Treasury and the Chairman of the Federal Reserve have assured us that speed is essential. There will be plenty of time for second-guessing and recriminations, something that Washington is good at. But first we must act. That is precisely what we are going to do.”
“Mr. Speaker?”
“Mr. Speaker?”
The shouts went up from across the entire row of reporters.
“Folks, expeditious means expeditious. I am headed to the meeting of the Rules Committee now to be available for any questions members might have. Besides, the Chairman of the Fed will be having his pre-scheduled press conference following the FOMC meeting in precisely thirty-eight minutes.” With that he turned and walked down the hall.
The network control rooms knew what to do. Their anchors had been sitting not so patiently. They were expecting it would be their pretty faces and authoritative voices that would tell the American people what to think. They had been preempted by the elected representatives of the people. Noses were out of joint. Time to give them their day under the Klieg lights. Besides, they had to pay the bills. So at least six of the next thirty-eight minutes would be used for commercial breaks. No time to dawdle.
* * *
Ben Coleman checked the market app on his iPhone as he entered the briefing room. Stocks were way up—over 400 points on the Dow. That was a sign of confidence. The dollar was up, too, almost one percent against all major currencies. Bonds and gold, however, were erratic. There was a lot of confusion about what this meant for the actual price of the gold that was not to be turned into the special coins. And the debt exchange between the Fed and the Treasury was causing confusion. He knew his job.
The statement released at two o’clock at the end of the FOMC meeting covered the very basics—the state of the economy, which was okay, but not great; the state of the financial markets, which were unsettled; and the unanimous decision by the FOMC not to change interest rates at this meeting. With everything that was going on, more change would not be a helpful thing.
There were two lines at the end of the statement that would be the center of attention. The FOMC has authorized the Federal Reserve Bank of New York, in concert with the Board of Governors, to take whatever actions are necessary to carry out the enabling legislation, should it be enacted, to issue special gold coins of a set nominal value as part of the continuing obligation of the Federal Reserve to provide a currency that is both a medium of exchange and a reliable store of value. The vote was unanimous with Governor Avery abstaining due to concerns about the technical implementation of this program over the long term.
Ben presumed that in the half hour between the issuance of the statement and the press conference that all the reporters present, indeed all market participants, would have read it. So he focused on providing context, answering questions, and spinning the market’s understanding to achieve his and the President’s objective.
He said, “In our nation’s monetary history we have frequently had paper currency and coinage made from gold and silver circulating at the same time. That was true during the first and second banks of the United States, during the Civil War and its immediate aftermath, and after the creation of the Federal Reserve in 1913 up through 1933 when gold coins were removed from circulation. Assuming the legislation that the President has proposed and that the Banking Committee of the House of Representatives will be sending to the floor tomorrow is approved, we will be returning to that practice.
“But there will be one difference this time. The President stressed in his speech to the country that we are putting our trust in the people, not in the government. That is exactly right. It will be up to the people whether they want to hold cash, coins, or melt down the coins they do have.
“Governments have always had an incentive to print money to pay their bills and in so doing force down the value of that money. Some have claimed that the Federal Reserve was created to facilitate that process. No more. If the Federal Reserve prints too much money and drives down its value, people will be free to convert their Federal Reserve Notes—what we call cash—freely into these special gold coins. And as a stopgap measure, if the Fed were to continue to print too much money and drive the value of that cash down further, then the public would be free to melt down the gold coins and get a return for them that is more than their nominal face value.
“So today is an important day in monetary history, not only for the United States, but for the people of the world. We, the monetary authority of the United States, are in effect tying our own hands. We will not be able to endlessly print money because if we do, then the people of America, and the people of the world, now have a means to stop us. They can convert the paper money into gold coins with no downside risk in their value and, if we persist, can melt down those coins at a profit. This truly is, as the President said, the people’s money.
“And because of this option the people have, we at the Federal Reserve must be careful to avoid excessive money creation. That makes the United States dollar the strongest currency in the world. It is the only currency that the people themselves can limit the creation of. This makes the dollar the currency in which everyone can have the utmost confidence. Moreover, the debt issued by the United States government, which is denominated in those dollars, is now the most solid debt there is. As I said, this is an amazing chapter in the history of mankind and our relation to money.
“Soon the countries that have liquidated the U.S. Treasury holdings will come to regret their decision. Moreover, by holding plain gold and not our special gold coins, those countries are holding an inferior asset, one that has no floor on its value. The laws of supply and demand suggest that the value of that raw gold will decline. After all, we will be supplying approximately 140 million troy ounces on the market in the form of special gold coins, the equivalent of roughly five years of new supply. And we will be issuing the coins with a price protection that makes them superior to holding gold in its raw form.
“We are carrying out this policy not out of malice, but in defense against those who sought to malign us. We hope those countries that have taken actions against us will see the error of thei
r ways and join us in trying to forge a new path toward prosperity for all the people of the world. I will now take your questions.”
“Chairman Coleman, does this mean that you are not pegging the price of gold?”
“That is correct. The value of gold in its raw form, that is, gold that is not turned into these special gold coins, will be allowed to move as the market sees fit. Only the gold we are now exchanging with the Treasury in return for their bonds will be turned into those coins. And that gold, and those coins, are the only things that are pegged in value.”
“So the value of gold and the value of the gold in the coins will be different?”
“Most likely, and as long as we do our job, the value of the gold in the special coins will be higher. That value is guaranteed by the United States—and the value will be printed right on the coin, five thousand or ten thousand dollars, as the case may be. Gold that does not have a U.S. government guaranteed price, meaning that gold not in the coins, will not have a floor and so should fall in value.”
“Mr. Chairman, have you discussed this with Governor Li of the People’s Bank of China?”
“No, I have not. Governor Li and I did meet last Friday in London at a special meeting arranged by the Bank of England. We had a meeting in which we were both committed to resolving the difficulties between our two countries in a peaceful way. And let me commend Li Xue for the very constructive role he played by informing us of the likelihood of the piracy that occurred off the California coast. Thanks to his candor the United States was able to minimize the disruption and resolve the situation with no loss of life. Governor Li proved himself to be a tremendous asset both to his country and to the cause of world peace.”
“But some of your words today were a bit harsh regarding the behavior of the People’s Bank and the Chinese government. How do you reconcile that with that very generous assessment you just gave of our enemy?”
“Governor Li is not our enemy,” Ben said, “and the People’s Republic of China is not our enemy. We are competitors. Governor Li is doing his very best for his team, as I am trying to do for ours. One can respect a talented and honorable competitor. And I have enormous respect for Governor Li even though he is doing everything he can to have China emerge from this crisis as the winner. But at the same time, I am going to do everything in my power to make sure that the United States wins.
“The Chinese government made a very foolish decision when it decided to try and undermine the U.S. dollar. It did so primarily out of concern for its own financial system, which is in desperate shape. I sympathize with the Chinese people who must suffer for the mistakes and errors in judgment made by their government in the past. But we cannot and we will not allow ourselves to be dragged down by their past malfeasance.
“We think the Chinese will soon see the error of their ways and the wisdom of our approach. If and when they do, I hope that I will be able to work with Governor Li in order to get the global economy back on track.”
Ben looked down at his iPhone and noticed that the market had continued to rise, bond yields had begun to fall, the dollar rise, and spot gold drop to just below $8,000, down more than six percent from its high earlier in the day. He had sent the desired signal. Now the challenge was to get out while he was ahead.
He had preselected the first two questions. Now, in case the jealous reporters decided to compare notes, he had better throw the next question out to the assembled gaggle. “I have time for one more question.”
He hadn’t bargained on what followed. It was a reporter from one of the web-based sites that were gaining popularity. Ben did not recognize him, but he would never make that mistake again.
“Mr. Coleman, we have learned that Mrs. Coleman is employed by CIA as a Chinese analyst. To what extent can you assure us that the compartmentalization of information that is required by law—both on the CIA end and on the Federal Reserve end—is being strictly complied with? In fact, there are even reports around that your bedroom has been bugged.”
“I didn’t catch your name.”
“Who I am is immaterial. What the American people need to know is whether you and Mrs. Coleman are respecting the laws of this country in your joint capacities. For the record, my name is Peter Robinson, OpenSource News.”
Ben could feel a rising instinctual need to defend his wife. But rather than go on the attack, he decided to use weasel words laced with humor.
“Mr. Robinson, you seem to be a better-informed man than I am. As far as I can tell from our monthly bank statement, we are a one-earner family. That is, of course, excepting the royalty checks my wife gets as an author. They are far larger than my salary, I must say. So large in fact, that I strongly doubt that Mrs. Coleman would see any need in seeking other employment.
“As to bugging our bedroom—maybe some kind of perverted voyeur would find that entertaining. But I am a very private man about things like that. If your story turns out to be true, and your notion of Mrs. Coleman being employed does not auger well for its validity, and I happen to find that person who is snooping on our private life, they will get a what-for from me the like of which would be most unbecoming of a central banker. I hope I have made myself clear. Thank you all very much.”
Ben’s stomach was churning but he thought that he had threaded the needle. Every word from his mouth had been truthful. There was no paycheck, and the voyeurs had gotten what for from him. But he also sensed that there was a leak somewhere. It was not his job to plug it, but he had no doubt that people watching this news conference would be on it right away.
CHAPTER TWENTY
The two operatives showed up at Deng’s suite at 9 p.m. to find the manager there to act as guarantor and interpreter. Deng and Chen were seated in two large chairs and their three guards standing behind them. All three were casually dressed. Bob and Tom were directed to stand in front of the group.
Deng spoke through the interpreter. “You two have violated all the codes of basic discipline. Showed lack of restraint and placed yourselves in jeopardy. For this you will pay the price that this court martial decides.”
He was right about the role playing, Bob thought.
Both men were ordered to strip to their undershorts and Deng came over to perform his inspection. Each muscle was tested, and Deng frequently grunted in approval. He stuck his hand down their shorts to check out their equipment. Average or a little better for a Caucasian but more ample than what Deng was used to. Another grunt of approval. He then nodded for Chen to come over and do the same, which he did, but in a perfunctory manner. Then the two men returned to their chairs.
The manager continued to translate. “First the two of you will drop down and give me pushups. Sixty for Tom. Eighty for Bob. This is to remind you of what lies ahead.”
The two men complied. Their morning rituals involved pushups, but not so many and Bob could feel his biceps tire toward the end.
Deng spoke again and the manager translated. “A little humility for both of you. When I give the signal, you will strip and begin to masturbate. I will time how long it takes. My men here will give you one punch in the gut for every minute you take.”
Tom thought, This wasn’t exactly part of the deal, but there was no reason to object given they had gotten this far.
Despite their tight abdominals the punches were enough to make them double over slightly and the purpose of the sex act was humiliation pure and simple. Both men were reeling after the ordeal, knowing the worst was to come. But neither had let out any plea for mercy or scream of pain louder than a grunt when the blows hit.
The guards hand cuffed each man to a hook at the top of each bedpost, their backs and shoulders fully stretched and butts and thighs still vulnerable. Deng took his belt off and started with Bob Franks. When the first blow landed Bob felt his whole body tense in response. He had felt worse pain, but not very often. He likened it to having his teeth drilled before the novocain had a chance to kick in.
Then came the second, and the thi
rd, and he could feel his arms start to involuntarily struggle in their binds. He realized that part of the punishment was the feeling of helplessness for the person receiving the beating. He was unprepared for that and his body kept trying to free itself despite his mind telling him to stop. He focused on not crying out, in part because it gave his mind something to focus on that he might control. But the main reason is that he knew Deng would simply get pleasure out of it and he was determined to prevent that.
After fifteen blows Deng stopped and turned his attention to Tom. Then he offered the belt to Chen who took a turn, but only landed six blows on each man. Deng resumed with another round. Chen declined another opportunity but each of the guards had their chance.
After forty minutes both men had gotten sixty lashes. Tom was released from his shackles. He felt his knees buckle as the full force of his body was now on his legs. He dropped to the floor on his knees. The manager handed him a cup of water.
Bob’s ordeal continued. Deng slowed down his pace, making it worse since Bob never quite knew when the next blow would land. Usually Deng made him wait thirty to forty seconds to get another. Tom looked up from his kneeling position and could see Deng was clearly enjoying this. He reminded himself why they were doing this and kept repeating, All in is all in.
Finally it was over. Bob also dropped to his knees and then found himself starting to drop to the floor. Tom came over to steady him and had to put his hand against the wall to keep himself upright. He was lightheaded from the pain and his stomach was rolling over, wanting to empty itself. Both men breathed heavily, sucking in air through their mouths in an effort to keep their brains from shutting down.
With great effort they put on their underwear and cut-off shorts but putting their tee shirts back on was well near impossible. There were small welts all over their shoulders and backs and a few spots where the skin was completely broken and blood was coming out. Still, none of the cuts was so deep that it would not heal with the passage of time.
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