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“Coming from you, that’s high praise,” I replied.

“Why are you using Switzerland and London in this?”

“No one trusts the Russians not to steal the gold,” I said. “But they trust the Swiss and Brits, so if you do everything under their legal systems, people won’t be afraid to deposit gold.”

“Right. Russia has been looking for a way out of the dollar system for years. They try to play by our rules and get screwed every time,” said Steve. “This is perfect for them.”

“Now here’s the deal,” I said, leaning toward Steve. “If you play this move for Russia, I’ll get the Chinese team to go along. If you can’t get Russia to make the move, I’ll launch this idea from China myself. Either way we’ll work this into the game and try to sink the dollar. That will be a shock to the U.S. The Pentagon is paying to learn something from this. Let’s give them their money’s worth.”

Steve took the mock press release, folded it and tucked it inside his jacket to study in detail at home. We finished our vodka and left ready to spring our sneak attack on the dollar.

Now Steve, O.D. and the rest of us were ready to start the war. Over those two days, the game would quickly take on a life of its own and open a lot of eyes to how markets work and how financially vulnerable nations actually are.

CHAPTER 2

Financial War

“The primary near-term security concern of the United States is the global economic crisis and its geopolitical implications.... Indeed, policies . . . such as competitive currency devaluations . . . risk unleashing a wave of destructive protectionism.”

Dennis C. Blair,

U.S. Director of National Intelligence,

February 2009

Day One

As we arrived at the lab that rainy March morning for the war game, the first thing I noticed in the parking lot were rows of high-performance motorcycles—Kawasakis, Suzukis and the like. I guess physicists working on weapons design have their wild sides too, I thought. We were headed to Building 26, a new venue for us. We parked nearby and walked to the main entrance. Once inside, we cleared security, got our badges, dropped off our cell phones and headed upstairs. After months of meeting in seminar rooms and offices, we were being admitted to the Warfare Analysis Lab war room. The scene did not disappoint. Growing up in the Cold War, I routinely entertained visions of the war rooms used for nuclear war fighting from the classic films Dr. Strangelove and Fail-Safe. Now we were entering something similar, but would be fighting not with B-52s, but with currencies.

The APL war room is large, with electronic battle stations and observation posts for about a hundred participants and observers. The rectangular room has four wall-sized screens at the front end and banks of smaller fifty-inch plasma video screens mounted on the walls along both sides to patch in additional participants from remote locations or to display additional graphics. The seating is tiered with a central trapezoid-shaped table for twelve on the lowest level closest to the wall screens; the trapezoid is flanked by four banks of long tables, two on each side, at a slightly higher level laid out in a chevron pattern around the center. In the rear, on an even higher mezzanine level, are rows of additional observer stations laid out across the room perpendicular to the main tables below. Finally, at the back of the room, opposite the large screens, are tinted glass windows hiding a separate chamber with five additional battle stations and some standing room. I discovered later that this separate chamber was used by senior military observers who wanted to watch the game in progress unbeknownst to the other players.

There was a podium and microphone at the front to the right side of the screens, where representatives of each cell could announce their moves and respond to moves of other cells. Every battle station was equipped with a laptop linked to groupware that enabled each player to provide continuous silent commentary on game progress even while