Commentary: No time like the present, and things will change

By Carol Hotte

I have posted in the Delaware State News often in the past, but took a hiatus from my hobbyist futurist prognostications, saying that I was going to sit back and watch the show.

Despite not putting to print my projections, I told friends and family that I felt something bad was going to happen and that I believed the supply chain was going to break down.

I certainly did not foresee COVID-19 even though the math suggested a pandemic was a considerable possibility. I suppose such a thing was too horrendous for me to contemplate.

There’s an old Chinese curse that applies to our current situation, “may you live in interesting times.” The Chinese have a fascinating history and culture and I have nothing against the ordinary Chinese national. But I never underestimated communists who have aptly embraced the capitalistic ploy of crushing one’s adversaries without loading a gun.

Alas, there is no time like the present and the ball is in our court.

Foremost, I’d like to say I am not advocating abandoning Keynesian policy i.e., voodoo economics – remember that guy? This, because currently it is the only formula which supports the level of debt the lifestyles our population desires. But it is likely unsustainable at this time, and already policy makers are firing up the propaganda machine – along with the Mint’s presses – getting American citizens prepared for what they consider to be a viable option towards dissolving our current monetary problems.

We only have two options and they are both disagreeable.

The first is that we suffer a prolonged economic depression with extreme inflation and heavy taxation trying to pay off China. The chief problem is, unfortunately, you can’t get blood out of a stone and what politician wants to tax their wealthy supporters?

The second option is something called debt repudiation; that’s where a country, say Brazil, tells another country, say America, “we aren’t paying you what we owe you.” Then the American people take it on the chin at their savings and loan institutions which are propped up by the federal government that raids the FDIC that subsequently bleeds the banks that drop their earned interest rates to nada over a thirty year period. Sound familiar?

I suspect that late (waste of breath) allegations (probably false) proposing that China manufactured COVID-19 is our opening salvo towards repudiating our debts. Even if China was inclined to make themselves look like saints (which they aren’t) and restructure our debts, ask an ordinary American in bankruptcy how that charm worked out for them.

I doubt they are the experts President Trump is in such matters. Surely he knows debt repudiation can be supported by other significant motions such as theft of intellectual property and proof the creditor misrepresented or withheld information vital, to the ability of the debtor to pay in addition to affecting the health of not one but many nations by hoarding vital supplies originally earmarked for fair trade.

Then there are circumstances beyond anyone’s control contingent to prompting refutation, like a plague!

That’s just three I can name off the top of my head and at least one if not all would hold up under international law.

In my opinion, President Trump was considering debt repudiation long before COVID-19 came along. Either that or he’d like to play a game of “funny money” by either tossing out altogether or revaluing paper money as several modern nations have done in order to secure their economic futures – like Germany. And France acts like that’s a customary economic tool and has done it over forty times in the last three hundred years, and people still trade with them.

Such valuation manipulations have wiped out debts overnight but maybe the president’s people aren’t up to that kind of slick maneuver because it does take a lot of talent not to make mistakes such as those that prompted the sale of properties the U.S. calls the Louisiana Purchase.

If you think my prognostication is extreme, consider: Paper money is likely to be replaced by an electronic currency, if not in the few short years I may yet live, then surely before the current 20-somethings drop dead. I can guarantee initially there will be a period of valuation swings. Such things happen, and just because it never happened to the U.S. dollar before does not mean it won’t.

I think there is a 75% chance of debt repudiation or a significant change in monetary valuation, especially if – as I have long believed – President Trump is reelected (should he make it through this summer, despite probable prophylactic therapies he doesn’t practice social distancing). There’s also a 50-50 shot of debt forgiveness if former Vice President Biden is elected.

Frankly, I don’t know which is worse. Debt repudiation will lead to a period of hyper-inflation, shortages and rampant unemployment which we are already dealing with. Debt forgiveness will do the same thing to us except the pain though perhaps not quite as excruciating will ultimately last decades longer.

Whatever will happen to China and whatever shall they do if essentially overnight the U.S. dollar is changed, or we pull a Brazilian maneuver on them? There will be consequences, but armed conflict is unlikely. China would prefer we revalue the dollar because it would ease their pain to actualize cents on the dollar in recompense.

If we simply say we aren’t paying because they violated agreements, there will be a panic in China such as might help bring down the communists, which would thrill the young people of Hong Kong. There is the possibility that the Chinese will have North Korea or Iran take potshots at us, whereupon we will likely lose some valuable real estate to “unknown terrorists.”

Indeed, there will be collateral damage, but then again there already is and there is more to follow anyway.

Carol Hotte is a resident of Felton.