( As financial policy drifts further into the realm of fiction there is very little need to take policymakers seriously anymore. Meet Agent Clean Slate the future of financial policy.)
Money Honey: So I hear you have a story for me.
Agent Clean Slate: Yes, my name is Agent Clean Slate. I'm here from the not so distant future in a last ditch effort to save the global economy.
Money Honey: Come on, you don't expect me to believe this nonsense. How did you get this meeting?
Agent Clean Slate: Believe what you will, but I spent seven long years at TIBET preparing for this mission, if I fail then all hope is lost.
MH: You are from Tibet?
ACS: Yes, the agency for Time Interfering Based Economic Therapy, or TIBET for short. The abbreviation throws off the Chinese.
MH: Agency? Chinese?
ACS: Yes, we are ETC's, economic time cops. Project TIBET is part of the Clean Slate Initiative.
MH: Clean Slate Initiative?
ACS: See, where I come from, or more appropriately, when I come from; the earth's economy is a mess. 2/3 of the S&P 50 trades at a negative enterprise value. Central Banks are bust. Gold has been banned by the governments.
MH: S&P 50?
ACS: Yes, after a wave of consolidation and bankruptcies the index is whittled down to fifty firms.
MH: And what about gold, why has it been banned?
ACS: Governments believed that the loss of confidence in paper money was due to gold, and they figured this could be reversed by banning the metal altogether. Anyone caught holding gold is to be charged with high treason.
MH: So, what do they do with the confiscated gold?
ACS: All gold on the planet is stored in Iceland.
ACS: Yes, iceland is the most advanced and stable economy on earth. Having abandoned markets and banking altogether and returned to their roots, the Icelandic people experience an economic rebirth. Breakthroughs in fishing and geothermal power allow iceland to become an economic powerhouse. They then volunteer to take over global financial regulations.
MH: That makes no sense. You want me to believe Iceland is an economic power. What about Japan, the U.S., China…….
ACS: There is no Japan.
MH: No Japan……Was it a Tsunami or an Earthquake?
ACS: Worse, it was AHDS.
MH: AHDS, what's that?
ACS: Advanced Hyper Deflation Syndrome. It's a nasty little bug.
MH: Hyper Deflation destroyed Japan. That's a bit much. No economic problem can be that bad.
ACS: My friend if you have seen a hundred year bond trading at 1bp you would understand what I was talking about. And if I fail in my mission I can assure you that you will live to see that day.
MH: 100 year bond? What are you talking about?
ACS: In 2012 the Governments of the World Institute the 100 year protocol to end the sovgn debt crisis. All sovereign debt is rolled over to 100 year maturities. It ends up being the worst financial policy decision in history.
ACS: It completely destroys the time value of money. Money tomorrow becomes worth the same and in many instances more than money today. Finance collapses, and Governments follow. That is why Japan is now the home of the Apple community. A post apocalyptic UI driven society started by its predecessor the Apple corporation.
MH: Apple owns Japan?
ACS: No, Apple is Japan. Once the Yen collapsed Apple bought the island on the cheap and stopped selling its products to the rest of the world. If you want to use Apple products you have to move to the Apple island and convert to Jobsism. Basically, Apple concluded that they had reached the limits of the classical UI experience. To preserve Jobs' vision Apple needed control over all expects of daily life. Call it technological evolution. Their new slogan is "An Apple a Day for the Rest of your Days".
MH: Wow, and what about Europe?
ACS: After flirting with the idea of a fourth reich, Germany chooses an isolationist path. It is now the Wonka state. Plenty of goods come out of there, but nobody is ever allowed in. The rest of Europe is a mess.
MH: And China?
ACS: The Chinese are doing ok. Around 2020 we discovered that they were behind the housing bubble and the collapse of the US economy, and that Greenspan was a Chinese agent. But by that point the US military, after a decade of austerity inspired budget cuts, is in such a state of disrepair that there is nothing they can do about it. Outside of Germany and Iceland the rest of the world is at the mercy of China and their economic and military power. That's where i come in. The goal of CSI was to develop time travel technology so that we could travel back in time and fix the great economic policy mistakes of our ancestors. Hindsight replaces stimulus. The project is top secret and funded by the few remaining members of the S&P 50 and the investment bank Goldman Farmorgan.
MH: Goldman Farmorgan?
ACS: Yes, Morgan Stanley, Jp Morgan, Wells Fargo, and Goldman are merged into one bank.
ACS:So, Goldman Farmorgan provided a bridge loan for the project with GooGamaZon ventures putting up most of the equity.
We code named it TIBET to confuse the Chinese who we knew would do anything in their power to stop this project from succeeding. And we located the primary research facility underneath the abandoned World Cup mega complex in Qatar because that's the last place we figured anyone would look for anything.
MH:What is your mandate?
ACS: To develop the ability to successfully send someone back in time to stop the collapse of Lehman
MH: So Lehman was a mistake?
ACS: Not exactly, the stimulus that followed Lehman was the mistake. Lehman was just the excuse. By stopping it we aim to temporarily slow the chinese down and buy ourselves time to fix the real problems.
MH: Why not just go back and replace Greenspan?
ACS: It's not that easy. Time travel is complicated. We are using an Einstein-Scholes bridge to enter and exit through funding holes in the time based capital structure. We never know when we will arrive, and we lack the power to remove principal actors. We can simply seek to influence, but as Greenspan is an agent for the Chinese that wont work.
MH: So how does it work then?
ACS: Well, the Googamazon search engine locates funding gaps in the time structure and then send agents in to fill those gaps.
MH: How do you fill the gaps?
ACS: With Gold from iceland of course. It still has financial value in your time. We structure a swap between two parallel universes, and presto the bad debt is gone.
MH: But how do you hedge your parallel exposure?
ACS: We don't. If we do our job right our universe will cease to exist, thus we are inherently delta neutral.
MH: Is that all?
ACS: No there is one more thing.
MH: What's that?
ACS: We fix the bankers.
MH: What do you mean you fix the bankers?
ACS:Well, every TIBET agent must deal with your investment bankers. Why do you think we wear these suits?
MH: Yes, you are kind of like those guys from the film MIB.
ACS: We are MIB's. Men in Brioni, and there is a good reason for that. We need bankers to trust us before we give them them their BONUS back.
MH: What? You are going to give them a bonus?
ACS: Yes, a bonus. A banker's onus.
MH: A banker's onus?
ACS: It's a sense of responsibility. We give them their b-onus by taking away their bonus.
MH: Ok, i'm confused.
ACS: Well,every agent has neuralizer which can be used to wipe memories. Much like the movie MIB except that we use our neuralizer to simply readjust the memory of investment bankers. We don't wipe, we plant powerful suggestions.
MH: And how does that work?
ACS: We make them believe they don't deserve their bonus.
MH: So what?
ACS: It's actually a very powerful tool. Once a banker believes he or she never deserved their bonus they become overwhelmed with guilt. They then feel that they have a debt to society that they must repay.
MH:How can you be so sure?
ACS: Easy, I was the first person this was tested on.
MH: You are a banker?
ACS: I was an investment banker. That is why I am here today.
MH: What do you mean?
ACS: I told you I was here to stop Lehman.
ACS: And i told you that when it comes to principal actors in time we can only seek to influence and that we cannot remove them.
ACS: Well then, how do you think i am going to stop Lehman?
MH: Convince the government to bail them out I guess.
ACS: There is no way for me to change the events of that weekend. There are too many actors involved and too many opposing forces at work.
MH: Then, you need to go back in time and convince Dick Fuld to sell Lehman before it is too late. But how are you going to convince Dick Fuld of anything?
ACS: (Smiles) Thanks for your time.
MH: That's it?
ACS: Oh, I almost forgot, one more thing.
(Agent Clean Slate flashes MH with his neuralizer)
ACS: You will remember nothing about the conversation we just had other than the fact that my name was Agent Clean Slate and that you really enjoyed talking to me.
MH: Wow i really enjoyed this conversation….Mr……..
ACS: Fuld…..but you can call me Dick.
MH: Dick Fuld? You know that's the same name as the former Ceo of Lehman. And you kind of look like him….that must be a tough combo.
ACS: Yeah, i know. I get it all the time. They tell me if i was just 25 years younger i'd be a dead ringer for him.
MH: Yep. (MH's phone rings) Just give me a sec Dick I need to take this. (MH steps away to take the call)
Agent Clean Slate: Ok.
ACS: Sorry, Dick that was……. that's strange where did he go?
(Agent Clean Slate has vanished)
To Be Continued