- Aug 1, 2004Frank Thomas Smith wrote:
the huge US debt and the at least equally serious balance of
payments deficit certainly make the dollar shaky, I still fail to
see what that has to do with the war."
"If a terrorist group sets off a real, live nuke along the lines of
the one in Tom Clancy's The Sum of All Fears, the world's economy
will go down. The second bomb, exploded a week later, will keep it
down. The third bomb will destroy the modern division of labor.
It takes no strategic genius to know where to explode them. It only
takes familiarity with "Diehard III." The locations are: (1) 33
Liberty Street, New York City (the New York Federal Reserve Bank),
(2) the City of London (the Bank of England), and (3) Frankfurt-am-
Main, Germany (European Central Bank).
Mentally move from "nuclear explosion" to "fractional reserve
banking." Then move from "we interrupt this broadcast" to "ATM
machine." I don't mean move mentally. I mean move. The moment you
hear about a nuclear explosion, get into your car and drive to the
nearest ATM. Take out the limit. You can always redeposit the money
Two days after a nuclear bomb hits an American city, your credit
cards will be rejected by all card-swipe machines. My credit cards
will be rejected. All God's chillun's credit cards will be rejected.
These two words "card rejected" would shut down the West. Who
has a month's currency in small bills in ready reserve? Nobody will
be able to pay anybody with digital money.
The long-feared inter-bank cascading cross defaults will take down
The U.S. government would then create a national rationing system.
It would put a moratorium on debt collection: no evictions, no
cessation of municipal services, and rationing in terms of last
month's consumption, minus 20% (initially).
The credit markets would be gone. That would be the end of
everyone's productivity and lifestyle. It would cripple the division
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