Quick quiz. Suppose you read a headline in the online version of the Wall Street Journal (or NY Times etc) stating that, from now on, US Treasury bonds would be redeemed in crypto. Would your response be

(i) That’s absurd. Either it’s April Fools Day or someone has hacked the website

(ii) That’s unlikely. Surely [1] Wall Street will be able to kill this crazy idea

(iii) That will be tricky. Which cryptocurrencies will be included and what will be the exchange rates?

If your answer was (i) you can stop reading here (and don’t bother commenting to justify your position). This answer assumes that, despite Trump’s bluster, nothing has fundamentally changed. You’re still in the denial stage, with six more to come..

If you’re answer is (ii) or (iii) you are paying at least some attention. I’ll point to some evidence suggesting (iii) is a plausible answer, and look at what that implies for the global financial system.

This is a follow-up to my previous post on the end of US democracy and its implications. Here I will discuss how what’s left of the democratic world can respond.

My latest from The Guardian

=With the resumption of parliament this week, and an election only months away, we have seen even more of the usual point-scoring about the cost of living, tax breaks for long lunches and budget deficits. But since the return of Donald Trump to the White House, the assumptions on which Australian economic policy have always been based are obsolete.

We must ditch the illusion that the US will return to normal and instead become more self-reliant

With the resumption of parliament this week, and an election only months away, we have seen even more of the usual point-scoring about the cost of living, tax breaks for long lunches and budget deficits. But since the return of Donald Trump to the White House, the assumptions on which Australian economic policy have always been based are obsolete.

“The cemeteries are full of indispensable people.” In one form or another, this observation has been made many times over the last century or more.

What is true of people is true of nations. In the past 25 years or so it was often claimed (and , admittedly, often denied) that, in the modern world, the United States was the “indispensable nation”. Whatever the rights and wrong of this claim, it has become obvious that, whether we like it or not, the rest of the world will now have to dispense with the US as a defender of democracy, guarantor of global order, or even (as in Margaret Thatcher’s words about Gorbachev) a state we can do business with.

Anyone whose experience of the US began in the last eleven days would have no trouble recognising an archetypal kleptocracy, like Putin’s Russia or Mobutu’s Zaire (with a touch of Mao madness). The boss rakes off billions in tribute while his cronies scramble to please him, put each other down and collect their share of the loot. Regime supporters commit all sorts of crimes with impunity, while opponents are subject to both legal victimisation and threats of extra-legal terror against which they can expect no protection.

In dealing with such a regime, the only strategy is to buy off the boss, or a powerful underling, and hope that they stay bought long enough to deliver on their side of the bargain This approach is politely described as “transactional”, but without the implication that the transaction will necessarily be honoured. Dealing with kleptocrats can be highly profitable, as long as you get in and out quickly enough, but there’s no possibility of “doing business”, either commercial or political, in the ordinary sense of the word.

The problem is that for nearly everyone who matters, the last eleven days seem like an aberration. For decades, the US has been seen as the central pillar of a “rules-based order”, on which assumptions about the world were largely based. That’as true even for critics who pointed out that the rules were drawn up to favor the US, and that the US often breached them without any real consequences. And it’s true even though you can point to precedents for everything Trump had done.

But all that is over, and can’t be restored.

As usual, 26 January has been marked by protests, denunciations of those protests, and further iterations. Even apart from the fact that it marks an invasion, the foundation of a colony that later became one of Australia’s states isn’t much of a basis for a national day.

A logical choice would be the day our Federation came into force. Unfortunately for this idea, our Founders chose 1 Jan 1901. The first day of the 20th century[1] must have seemed like an auspicious choice for a new country, but it ruled out the anniversary as a national day.

The ideal thing would be to fix the problems of our current system with a republican constitution including a treaty with the original owners of our land. That would provide a date really worthy of celebration.

In the meantime, I suggest 3 March, the anniversary of the day in 1986 when the Australia Act came into force, finally establishing beyond any doubt that Australia is an independent country, entirely separate from the UK[2]. We had by 1986 a constitution and public policy that was at least formally non-racist, thanks to the 1967 referendum and the end of the White Australia policy. Many of the symbolic problems with the current date would be avoided, though the real injustices would remain to be addressed.

It’s true that the Australia Act doesn’t have a lot of resonance. But any date with a lot of resonance is bound to resonate badly for a large proportion of the population. At least this would be a choice nearly all of us could celebrate without worrying too much about its precise significance.

fn1. At least if you start the count from 1CE. I think it would be more sensible to cross-label 1BCE as 0 CE, making 1900 the start of C20. I had always assumed that Dionysius Exiguus, who invented the AD calendar was unaware of the concept of zero, but Wikipedia accords him a prominent role in its history.

fn2. Whether, when and to what extent, we had become an independent country before 1986 remains a mystery, but there’s no doubt after that.

I’ve already said all I plan to (for now) about what’s happening in the US. But if others want to discuss it, here’s an open thread.