Home » Cyberwar » Catalyst Watch, Part 1: CyberWar

Catalyst Watch, Part 1: CyberWar

by John Rubino on February 13, 2013 · 9 comments

When the technology of warfare changes, so does everything else. State-of-the-art roads and siege engines gave the Roman Empire control of the western world two millennia ago. The long bow won some notable battles for England in the Hundred-Year War. Machine guns opened pretty much the whole world to European imperialists in the 1800s. And so it has gone, through tanks, jet fighters, and nuclear weapons.

But where previous breakthroughs made it easier to destroy things and kill people, the newest super-weapons don’t blow things up, at least not directly. They disrupt information systems, without warning and frequently without betraying the source of the attack. Drawing on recent news accounts along with America the Vulnerable, a terrifying book written by former National Security Agency official Joel Brenner, here’s the cyberwar story in a nutshell:

Over the past couple of decades, humanity has grafted its most important systems onto the backbone of the Internet, which was originally designed for scientists to share data easily – that is, with convenience taking precedence over security. So our banking, military, energy and corporate data networks now make critical information available to lots of people using lots of sign-in credentials from lots of different places. As a result, these systems are easy pickings for thieves, vandals, and enemies.

Meanwhile, teenage hackers have been replaced as top predators in this ecosystem by sophisticated organized crime groups and even more sophisticated branches of foreign military/intelligence services. Since it’s easier to penetrate critical systems than it is to prevent or detect penetration, it’s safe to assume that major military networks, multinational corporations, and top-tier banks have been – and are being – hacked.

This matters because once a hacker is inside a system they can do pretty much anything an authorized user can do, from withdrawing money, to stealing critical data, to crashing the whole system. It is now possible for hackers to: remotely change the operating parameters of power generators to make them blow up, in the process taking down regional power grids; move so much money out of bank/brokerage customer accounts that the institutions fail; and crash the clearing mechanism of a country’s banking system. And that’s just the obvious stuff. Attacks that we can’t currently conceive of are no doubt being contemplated and/or planned by governments and mafias around the world.

All of which explains why cyber-conflict has become front page news. Here’s a more-or-less random sampling of recent headlines:

The world’s first cyberwar has started 

Your password isn’t enough to keep your info secure on the internet

Norway preparing for cyber war

Cyber war: mutually assured disruption 

Scott Knight: preparing for cyber-war

Obama declares global cyberwar

Federal Reserve gets hacked!

US in growing cyber war with China?

Cybersecurity: how preemptive cyberwar is entering the nation’s arsenal

Obama granted cyberwar powers

Why is cyberwar a topic for a site like DollarCollapse? Because assuming – as we should – that the global financial system is now so complex, leveraged, interdependent and fragile that a disruption in one part can easily spread to the rest, the only remaining question is which catalyst will be first to set off the avalanche. A major cyber-attack is a pretty good candidate.

How likely is such an event? Well, based on what the world’s governments and corporations are willing to admit (almost certainly the least serious tip of the iceberg), big things are already happening, and the threat of massive retaliation and/or preemptive strike looks both real and imminent. The Japan/China conflict in the China Sea, for instance, could easily pull the US into a cyber-battle, if not war. Because this is uncharted territory, there’s no way to predict the impact on the financial markets.

Meanwhile, the cyber-powers now being granted to governments to fight the next war are eviscerating Constitutional protections of personal privacy and liberty. So the ability to fight a cyberwar is also the ability to create a high-tech police state.

Seen this way, cyberwar is yet another reason to avoid keeping a lot of capital tied up in financial assets. If the banks, brokers and insurance companies holding those assets are hacked and maybe disrupted, what happens to your stocks and bonds? Again, this is uncharted territory, which adds to the appeal of real assets held out of the mainstream financial system. The only thing that can be said with certainty is that in a cyberwar your gold coins and farmland will still be there when the virtual dust clears.

  • Bill johns

    Nonsense. We have 11 carrier task forces, drones, nukes beyond count. We’re safe, right John. ….right???

  • little green man

    the debt is the threat ..the fed is the enemy ..the fed’s bitch is the treasury printing bonds and getting you and me to pay for same…the t bond debt will bring the dollar down if we don’t abolish the ngo fed

  • fallingman

    “Attacks that we can’t currently conceive of are no doubt being
    contemplated and/or planned by governments and mafias around the world”

    Why the redundancy?

    Kidding aside, this is a really good, timely article. Thanks.

    Beware false flag “attacks” to which the Powerz respond with a crackdown on internet access.

  • Makati1

    I leave only enough in my bank accounts to keep them open. In and out as fast as possible. No 401ks or mutual funds to be confiscated or ‘controlled’. I’m not even in the country anymore. No one is going to hack the Philippines. There’s nothing here they want. Yes, China wants the Philippine oil in the S. China Sea, but they also own a big chunk of industry and commerce in the Ps so they are not likely to destroy that. However, the cold war between China and the US is heating up cybernetically. No need to invade when you can cyber drone a nuclear plant’s cooling system or take down the banking system from home.

  • Bruce C.

    I agree that something is going to be the catalyst for another financial collapse, and I suppose a major cyber attack may be a contender, at least in theory, but that’s about as far as I can go with it. I know very little about this subject, and I suspect very few other people do either, and that makes me a little suspicious. The whole thing makes me feel very similar to when I think about the Middle East and the supposed imminent conflict between Israel and – you name it – I guess Iran, lately. Lots of talk and hand wringing, and then nothing. (Remember how Israel was at “wits end” about attacking Iran before the 2012 US Presidential election? Should they or shouldn’t they? What a farce!) I almost suspect “cyber threats” are just another smoke screen, similar to “global warming” and “global terrorism”. It provides an excuse for government intrusion and the compromise of liberties, like the now institutionalized Homeland Security airport check points, and the “National Defense Act” (or whatever it’s called) that gives the Federal government the right to detain indefinitely US citizens suspected of terrorism without any specific charges or due process. If cyber attacks of significance are possible then why haven’t they already happened? Maybe the few that we know have occurred are about as damaging as they will ever be (i.e., not very). I just can’t shake the feeling that cyber attacks are just another paper dragon.

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  • Robert MacKay

    Talk about hyperbole and overblown fear mongering. The nations electrical control systems at oil, natural gas and nuclear facilities are not tied directly to the internet and have what is know as air gap security, there is no network connection between these critical systems and the internet either physically or wirelessly.

    I have worked in cross domain security systems and know this for a fact regardless of the insane claims of the author!

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