Currency Wars_ The Making of the Next Global Crisis - James Rickards [15]
He may have said this just to shut me up, but it was fine with me. We had just tightened the noose around the U.S. dollar’s neck. The rest of the team quickly concurred and I promptly convened a summit with Russia to give them our offer. Steve and I met for the third time and, as I expected, Russia agreed to buy all of China’s gold, about one thousand metric tons, in exchange for currency from Russia’s foreign exchange reserves. This trade was ideal from Russia’s perspective because it was a huge purchase with minimal market impact. In ordinary gold trading, a large bloc trade of as little as ten tons would have to be arranged in utmost secrecy in order not to send the market price through the roof, but now Russia had pulled off the largest single gold purchase in history with no immediate adverse market impact at all. I was sorry to see China out of the gold game, but I was pleased to see Russia moving the ball down the field.
Now it was back to the war room and our third plenary session. We went around the room, with each team spokesperson reporting its response to the North Korean scenario. As expected, the United States and the Pacific Rim pledged humanitarian aid, as did China, which furthermore made some conciliatory noises about potential reunification since the North Korean regime was clearly on its last legs at this point. Russia joined in the humanitarian aid chorus but also took a harder line by sealing its border with North Korea. Then, almost in passing, Russia announced that it had acquired all of China’s gold and was adding this to its own preexisting hoard in support of the new gold-backed currency.
The white cell was visibly perturbed. Russia was playing its own game by its own rules. As far as Steve and I were concerned, Russia had been playing by its own rules for a thousand years, so this was a typically Russian course of action. At this point, the eight-hundred-pound gorilla could no longer be ignored and the adjudication came quickly. There was very little change in the national power of China, the United States or the Pacific Rim as a result of round two. This made sense because North Korea, while volatile and dangerous, was isolated, so no one gained or lost much relative power when the North Koreans decided to rock the boat—it was everyone’s problem. But the white cell then reported, sheepishly, “It appears Russia has taken concrete steps toward launching a credible alternative to the dollar in international trade. Its prospects are highly uncertain, but we have decided to award Russia additional points for its currency-related moves.” Steve and I looked at each other from across the war room. This was far from vindication, but it was hard to resist a slight smile.
It was now the end of day one. We were having a good war so far, but it had been a long day. We decided to find a local restaurant, have a few drinks and dinner, and then head back to our hotel early to catch up on the news and get ready for day two. It is one of the paradoxes of working inside a secure location that you have no idea what is going on in the outside world. Someone may be in the nerve center of intelligence analysis or weapons development, but, because of limited access to cell phones, news apps and the desiderata of twenty-first-century connectedness, he would be the last one to know if stock markets were collapsing. As market participants and news junkies, we were now as hungry for information as we were for food. We got directions to a not too fancy place nearby that the lab staff had recommended, and Steve and O.D. chatted and tapped on their BlackBerrys while I drove in the general direction of Fort Meade, Maryland. We found the place without too much difficulty but were surprised to find the parking lot full and people jamming the second-story balcony outside the restaurant at 5:30 on a Tuesday afternoon.
“Ah,” said O.D., drawing on his O’Donnell family roots and putting on an Irish accent