However, production of the necessary things in life actually increased. When supply is crimped, prices soar. When prices jump, everyone becomes an entrepreneur and tries to make a quick buck from the disruption. Before you know it, supply will flood demand. Just like after a devastating hurricane, for example. Bottled water, canned food and fuel for generators are in short supply for a while, but not too long.
When someone in trouble is willing to pay a 300 % premium for a gallon of gas, well, then you can’t argue the efficiency of a free market. Out of the goodness of their hearts, everyone and their mother fills up a car with whatever aid supplies have the highest profit potential and rushes in from out of state. Those first to market reap the rewards. Those coming later find an oversaturated market.
The Preppers were right about inflation though, but it was distributed fairly evenly. Everything went up in price, especially when, in a boldly populist move, both governments indexed minimum wage to inflation. Despite the government’s rampant money printing, wage increases nearly matched the price spikes. The Federal Reserve pumped an unprecedented, some would say unholy, stream of new dollars into the economy to calm the commodity markets. All they succeeded in accomplishing was fueling the fear more. At least they created bubbles across the board, rather than in any one asset class. They could get away with this without crashing the dollar mainly because of the economic wildfires consuming the rest of the world.
With heavy manufacturing slowly, but steadily returning stateside to take advantage of revitalized military spending, the Chinese Yuan became practically junk. You could forget the Euro. Those Europeans responded to the crisis with their typical wishful thinking. Cut government spending even further, except for welfare of course, while drastically hiking the already oppressive taxes.
It didn’t take long for the core Eurozone economies, France and Germany, to consume 60 % of their gross domestic product with taxes. De facto communism, without at least partially effective central planning. It was impossible for the private sector to expand faster than the tax burden. They’d chewed their legs off to get out of a trap, only to bleed to death later.
By the time populist anti-austerity, anti-globalization politicians took over power, things were beyond repair. In Germany, a distant grand cousin of a once frightening Austrian celebrity would soon be addressing dem deutschen Volke as their latest chancellor. He had some interesting ideas about who was to blame for the disaster and what to do about it. The European Union experiment wouldn’t survive the year. That left the US the only safe harbor for vulnerable cash in this worldwide Tsunami, war or no war. The foreign money poured in. Stocks, bonds, real estate, all prospered, but the hottest investments were new arms manufacturer startups.
Making economic recovery even easier, the militarized border existed only on maps. It was just too long and far too new for any side to “secure the border.” With all the money to be made, cross-border trade continued the same as always. Sometimes overzealous customs agents made it necessary for trucks to take county roads and avoid the major interstate crossing points, but not always. Most of these “smugglers” operated in plain sight since they had no problem spreading a little of the wealth around to local custom officials and soldiers.
Regardless of the particular arrangements, the sealed border might be the most lucrative in the world. Wheat, corn, soybeans, potatoes… you name it, all these foodstuffs continued to find their way from the wide-open fields of the URA to the grocers of New York. There were also no shortages of coal or manufactured goods coming west in exchange. By the truck or trainload, you couldn’t stop people from making money. That’s the thing in America: Political passion runs deep…but capitalism runs deeper.
Sacramento, California
“Pray tell, General, how did the Feds just waltz into Alaska without a fight? What are we paying you for? One week into the job and you’ve already lost an entire state! I can’t wait to see what you’ll do next week.”
The head general in charge of the “free” US Armed Forces withered under the fire of this tiny woman. California’s Governor Salazar, or the Provisional President of the United Republics of America as she called herself, was not the quiet type. This short, slightly chubby woman had more ambition and drive in her little finger than most of her advisors had in their whole families. Unfortunately, her military experience did not match that passion.
“Well, Ms. President, except for a small contingent in Anchorage, they’ve only reoccupied the military bases. Bases that we stripped of personnel and equipment to reinforce the border, at your request.”
“Spare me the excuses. You’re missing the big picture. From a propaganda standpoint, with the capitol in their hands, they own the whole place. Do you realize how much work went into getting Alaska on board? All that politicking pissed away by raw military force. Damn if there’s not a lesson to be learned there. What are you going to do to retake it?”
“Ma’am, we don’t really have any options at the moment. After the surprise federal assault Canada began enforcing their declared neutrality. They’ve ordered their borders closed to military traffic from both sides. With the Feds having such naval superiority in the Pacific, I don’t see how we can risk an amphibious operation either. For the time being, we just have to move on.”
“And what about our navy? I thought we captured something like 100 ships. I saw two aircraft carriers just the other day in San Diego. Surely that’s more than what the Feds have in Hawaii.”
“The paper strength is misleading, ma’am. Combat power is not simply the sum of our weapons and delivery systems. These ships require a vast number of highly trained technical specialists. With our extreme manpower shortages, we can sortie only about 50 major vessels. Maybe including one carrier, with a reduced crew complement, if we accept lower overall combat efficiency. Even that small force would strain our limited resources. No ma’am, at best we can scrounge up half the naval assets we believe the Feds could muster.”
She wasn’t terribly interested in the details. “Fine, then. Alaska will have to wait. What about that scheme in Florida? Have we made any progress?”
The general couldn’t help but sigh as he sourly answered, “Mr. Esterline can best field that question, ma’am.”
The fledging new government didn’t have an official intelligence service yet. The few professional spies and analysts that “came over” were obviously a little suspect. The best they had was this freelancer. You couldn’t tell by that expensive suit and slowly graying hair, but this ex-Green Beret had trained and advised paramilitary forces in a half-dozen exotic locales. Even that wasn’t the primary qualification on his impressive resume.
Back in his CIA days, they called him a top-notch strategic operations officer. Hell, one referral claimed he was the acknowledged master at waging proxy wars. He manipulated or outright bribed God knew how many Arab and African dictators into launching seemingly random military interventions against extremists. While the official records were sealed for 70 more years, legend has it that with a single well-timed drone strike he once sparked a short but deadly power-struggle war between the original Al Qaida group and their affiliate branch in Yemen.
After abruptly leaving civil service, “tossed out on his ass,” according to most insiders, he joined the private sector as “a troubleshooter, of sorts.” Since he was fired in an embarrassing manner back before The Split, and had an obvious axe to grind with his former employers, his loyalty wasn’t such a mystery. His sanity was an entirely different question.