This is a relatively short piece, because a longer one may be considered "conspiracy theory". Similarly, I've removed all citations and references (US Supreme Court rulings, etc.) because those may obscure the point, since people's eyes tend to glaze over with such (mostly irrelevant) facts/details. However, all assertions here are easily/trivially provable with a simple web search, or are obvious logical conclusions (with which the reader is free to rebut).

Rather, these are merely clinical observations and assertions regarding what I would do to become King of the World, if I were Ben Bernanke.

Background: The US Federal Reserve (i.e., "Fed") is a private institution, which the US Congress and US Supreme Court agree is not part of the US Federal Government. Rather, the Fed is merely a private bank. Many private companies exist in the United States. The Fed is one of them. Many private companies have contracts with other companies, and even with the US Federal Government. Some private companies have "charters" established through the US Congress (i.e., "Government Sponsored Entities [GSEs]"), and thus may be considered "pseudo-private". The Fed has such a charter. However, the charter merely establishes bounds regarding the institution's founding and behavior. Typically, that charter still permits the chartered private company to sell shares and perform other market functions typical of a private company (that was the goal, which is why the GSE was sponsored in the first place, so the government could "kick-start" a private enterprise). Should the US Federal Government dissolve, private companies would continue to exist (e.g., they are owned by their shareholders, they have debt obligations to their bondholders, and they engage in contracts with other companies, in addition to possible contracts with the Federal Government.) True, private companies holding contracts with the (now-dissolved) Federal Government would no longer have those contracts (since the counter-party no longer exists). This is a typical occurrence with any contract (dissolution through defaulted counter-party) which has nothing to do with the lifespan of the remaining party, except for possible losses associated with contract termination (e.g., loss of future revenue, etc.). Similarly, a private company established through charter with the Federal Government would continue to exist when the Federal Government is gone (it just means the charter is no longer in effect, since the sponsoring institution no longer exists). That now-unchartered organization continues to exist because it is still owned by its private shareholders, still has bond obligations, and still has other outstanding contracts/agreements.

The above assertions suggest the Fed, as a private institution, can continue to behave as a viable private institution once the US Federal Government is gone. In such a case the Fed would be just like any other private institution (it simply would no longer have a US Congressional Charter). These are the implications:

The US Congressional Charter gave the Fed a monopoly control of the US $dollar. Literally, the dollar (a "Federal Reserve Note") is the intellectual property of the Fed, not of the US Government. The charter "promotes" use of the dollar as a currency, and in return the Fed (at some level) is "restricted" in what it can do with the dollar. The Fed has claims on the US Federal Government. The US Federal Government does not have claims on the Fed. Thus, dissolving the US Federal Government does not trigger Fed liabilities. In the event the US Federal Government dissolves, the charter would no longer exist. However, the Fed would continue to exist (e.g., it still owns the intellectual property called the "dollar"). Other parties are free to interact with the Fed if they wish (like with any private institution). However, the Fed would no longer have "sponsorship", so these interactions would be voluntary. Without a charter, the Fed is free to arbitrarily establish policies for its intellectual property (the dollar), and even to establish a new charter with another institution.

Many assume that the Fed would not survive a dissolution of the US Federal Government. However, that is not true: The Fed will only dissolve when its intellectual property (e.g., the "dollar") no longer has value, and the Fed shareholders decide to liquidate assets. If people still want dollars, the Fed exists. Since the dollar is an unsecured claim on Fed assets, even if people do not want dollars, the Fed remains one of the largest real property owners in the United States (through its mortgage securities and stock market holdings).

If I were Ben Bernanke and wanted to become King of the World, I would:

Encourage nations all over the world to issue sovereign debt denominated in US dollars (Germany and numerous other EU nations are doing this now). I would do this even if I needed to print dollars to promise/subsidize their debt issuance (it's "free to me"). This establishes a future need by that nation to come up with dollars at the sovereign level. Print dollars to gift/loan massive amounts of dollars to nations all over the world. I want as many (public and private) institutions using dollars as possible, and more importantly, to leverage debt denominated in dollars. (This was the purpose for the AIG bailout, and continues with currency swaps and outright purchases of foreign sovereign bonds.) Print dollars to purchase real assets and securities which establishes my "fundamental value" as a holder of assets (MBS purchases, POMO, etc.)

What would happen next:

Sovereign defaults will start worldwide. I could even trigger them by restricting currencies, or buying/selling currencies to force a change in exchange rates that would trigger sovereign default (since nearly all countries are over-leveraged past the point-of-no-return). The ECB can't freely print, but I can. The US Congress can't freely issue bonds, but I can freely print. You think a $700B bailout is a big deal? Bah. I can write checks $Trillions at a time with no vote and no review. In the deflationary unwind, people would need dollars. The dollars would not exist (e.g., debt would not be serviced, counter-party risk would be massive). Suddenly, my ability to print dollars would make me even more important. And, these are my dollars that I am free to spend as I please. I'd default foreign nations first, and the US Federal Government last. As the holder of the World Reserve Currency, I don't want the US Government to default first, because there would be a chance that another world reserve currency would replace me. However, by removing all foreign currency viability *first*, and then defaulting the US Federal Government *last*, I would be the undisputed holder of the World Reserve Currency without a challenge. To fortify my World Reserve Currency status in a new world of sovereign mistrust (which further undermines the chance of a new sovereign currency arising), now freed from the restrictions defined by US Congressional charter, I would establish a new charter with the IMF or BIS (each is outside the bounds of any given nation). I would probably pick the IMF, since they are more "direct meddlers" with a good history of ensuring indentured servitude on nations. I would thus enhance my protected "world currency" status, and the IMF would gain the power to print its own currency without the annoying influence of sovereign governments. To show my "good will", I would start a "new" Marshall Plan to "print-and-gift" my dollars to countries that agree to use my currency. This will ease every one's transition in a new uncertain world. Why use "New Greek Drachmas" when you can't buy a tanker of oil with them? I'll give Greece enough dollars to buy *three years* of oil, after which time the Greek economy will be entirely denominated in dollars. Greece doesn't want to play? Fine. I'll ignore them for a few years until they realize the Saudi's don't want New Drachmas, and Greece gets desperate for my grace (at which point I'd make them an offer they can't refuse).

Not only is this plausible, it's rather simple. If Ben can't pull this off, he really is a moron.