Read Detective Danny Cavanaugh 01 - The Brink for Free Online Page B

with a few days’ worth of stubble. He resembled a rugged adventurer dressed in a tattered long-sleeved T-shirt, cargo pants, and hiking boots. Women would want to trust this man as soon as they met him, including Sydney.
    “Japan also stipulates that dollars won’t be accepted as payment,” she finally said, choosing her words carefully.
    “They can’t not accept dollars. It’s currency, the most accepted currency across the planet.”
    So, he isn’t just another pretty face, Sydney thought. “That’s exactly what I thought when I read what they want as payment.”
    “What?”
    “Gold.”
    Danny stopped fooling with the guard’s pants. “Gold? I’m pretty sure our government doesn’t have a trillion dollars worth of gold just lying around. And even if they did, they wouldn’t want to part with it. ”
    Danny probably had no idea how close he was to the truth. But Sydney couldn’t disclose it. Not here anyway. Still, she felt she had to give him something more. “My theory is that they want gold because they believe the dollar will soon be worthless.”
    “Worthless? What makes the dollar worthless?”
    Sydney looked around. “We don’t have the time—”
    “Then give me the short version.” He scanned the area. “We’re okay for a quick story.”
    Sydney sighed. “The debt that China and Japan regularly purchased represented 20 percent of the revenue for the U.S. operating budget.”
    “Which means they were subsidizing our daily operations,” Danny concluded.
    Sydney nodded. “In the three months since Japan and China have stopped buying that debt, which caused the rest of the world to play follow the leader and do the same, the Federal Reserve has had no choice but to print more money to make up the difference.”
    “Which has devalued the dollar and caused the huge jump in inflation everyone’s been griping about, right?”
    “I’m glad to see you’re up to date on fiscal policy, Sergeant.”
    “I like keeping current. But the Fed can’t just keep printing more money, right? If they do, won’t there come a point when inflation spirals out of control and a loaf of bread costs like $15,000?”
    “There is another tool the Fed can use well before it gets to that point. They can raise interest rates so other countries will start buying your debt again.”
    “And the problem with that is?”
    “The higher the interest rate, the more you have to pay in interest to your investors.”
    “I got that part, but how does that apply to the U.S. budget?”
    “To date, you’ve accumulated just over $13 trillion in debt. Interest payments on that debt represent the third largest expense in your federal budget. To make your debt attractive again, the Fed will need to increase the interest rate at least three, most likely five, percentage points. When that happens, America will not be able to afford to do much else but pay the interest on that debt.”
    Danny jumped ahead. “Which our government can’t do because we need to pay for essential services like our military and Medicare.”
    Sydney nodded. “And when America can’t pay—”
    “We’ll be bankrupt.” Danny exhaled. “Jesus.”
    Hearing herself tell the story made doubt creep into Sydney’s mind. It does sound fou, she thought. Crazy. But then she thought back to the monastery’s conference room only hours ago, where she sat staring at the two sentences in the lawsuit that stood out from the rest.
    Payment in U.S. dollars will not be accepted. Payment must be made in gold.
    Sydney had considered the possibilities. With the price of gold already at all time highs, a handful of countries—including Italy, France, Holland, and Germany—had recently sold off small portions of their gold reserves to pay down their national debts. But not since the world abandoned the gold standard had any country demanded gold for any type of payment. And no country had ever parted with all or even close to the majority of their gold