Cyber Attack by Bobby Akart Read Free Book Online

ratio with the dollar,” added Secretary Lew. “Many of our businesses began writing their contracts with European companies in dollars, but a few of the larger institutions hedged and used forward contracts—betting on the additional loss of value.”
    Katie absorbed as much of this information as possible because she would have to relay these details to Morgan. However, she was hesitant to take notes. Valerie Jarrett continued to study the faces seated around the table in the Situation Room. What is she looking for? Does the White House suspect a leak?
    “How does all of this affect our national security?” asked McDill.
    “There are a lot of possible scenarios, none of them are very good,” said NSA Rice.
    “Give us the best-case scenario, Jack,” said McDill.
    “We expect the breakup to destroy twenty-five percent to sixty percent of the gross domestic product in the stronger countries who choose to remain with the euro—namely France and Germany,” said Lew. “Banks throughout Europe and to some extent elsewhere will suffer catastrophic losses and need to be nationalized. There will be massive wealth destruction in the private sector. European export markets will practically disappear because devaluation will make those products expensive and uncompetitive. On a societal level, unemployment, uncertainty and shortages of basic necessities will result in large-scale unrest across Europe.”
    “I asked for the best-case scenario.”
    “That is the best-case scenario, Dave,” replied Lew. “The worst-case scenario is a total collapse. Such a collapse would lead to a multiyear depression in Europe and several years of recession here. The collapse of the euro would have a more damaging impact on the American economy than the events of ’07 and ’08.”
    “What do you mean?” asked McDill.
    “A rush of financial assets out of the Eurozone would wreak havoc with currencies and the price of oil, for starters,” replied Secretary Lew. “Even worse, interbank lending will be destroyed worldwide. Should there be a run on banks worldwide as a result of the Eurozone collapse, credit markets will freeze, making it near impossible to borrow money.”
    “We pulled ourselves out of the ’08 debacle through Federal Reserve activity,” said McDill. “Can’t you coordinate with the Fed and the IMF to formulate stopgap measures?”
    “Ordinarily, the answer is yes,” replied Secretary Lew. “The crisis in 2008 originated in the United States and was manageable by the Fed. There is no single global entity that wields as much power internationally as the Federal Reserve. The Fed has its hands full with the rapid rise in inflation in the United States. A reduction in rates for the purposes of bailing out Europe would make our inflation look like Zimbabwe of ten years ago.”
    In 1998, the President of Zimbabwe, Robert Mugabe, instituted a series of government programs to elevate his country’s poor population. The programs included land grabs from multinational corporations who allegedly took the properties from the poor during the early years of colonialization. Because the lands were primarily used for farming and food production, the economy of Zimbabwe was devastated. Exports came to a halt, tax revenues dried up, and the government’s operating expenses skyrocketed. The Reserve Bank of Zimbabwe produced more currency in higher denominations. Hyperinflation destroyed the value of the currency. Inflation rose to an unprecedented six hundred percent in 2004. By 2008, hyperinflation rose to two million percent. Katie knew Zimbabwe was not an isolated occurrence, although it was considered the worst example. In the last one hundred years, major countries, including Germany, Mexico, Argentina, Iraq and Romania, had experienced hyperinflationary periods.
    Secretary Lew paused and a tense silence filled the room. Jarrett broke the silence, speaking for the first time.
    “The President is very concerned about the