return to ICG Spaces home    community weblog    discussions    newsletters    login    

community weblog - [ InfoT Public ]

Londonistan: Do not confuse "crude" with effective, or dismiss "homegrown" over imported "highly trained terrorists"

  #

Before one dismisses the effects of a "crude" bomb, it is instructive to look at the blast effects inside the controlled space of a subway tube. See the photo in The black widows strike again? describing the Chechen suicide bombing of a Moscow metro train in a tunnel near Paveletskaya station. The three London tube blast effects would, I think, demonstrate similar characteristics as the smaller London charges would be offset by the London tube geometry. In a private note of 6 Feb, 2004, speaking to a spate of bus bombings in Israel I noted:

A subway car is a much softer target than a bus as the blast is contained by the subway tube walls, especially if it is a single track line as are many of the older London tube lines. Pick a very busy station and get the explosives to walk in. Conventional explosives are so elegantly simple, but it is only a matter of time before we see the merger of suicide bombers and WMD. Just add something [simple] and it will be spread through the train and tunnel. First responders will not be expecting it as they attempt to clear the train. [London first responders at the King's Cross bombing had their hands full enough with toxic gases, falling asbestos, and hordes of vermin.]

Much of the early, even current, traffic on the London bombings continues to confuse a "crude" device with an extremely effective device sufficient to achieve its aims, and to denigrate domestic or "homegrown" terrorists in lieu of "highly trained terrorists" imported for the occasion. I maintain the exact opposite in that the attacks achieved their aims with great efficiency and complete surprise - the hallmarks of asymmetrical warfare - and are increasingly seen in the UK as Britain's '9-11' (It is being called "7-7"). Furthermore, I find it a much greater threat to the UK, and by extension to Europe and the US, that the attack team is a isolated sleeper cell of modest unknowns from Leeds.

Consider the following:

  • Lack of warning: While seeing a large-scale attack as inevitable, UK "police and the intelligence services, considered by their peers to be among the best in the world, were taken by surprise by the coordinated bombings… There was no warning or even a hint that an attack was imminent… Britain's Joint Terrorist Analysis Center quietly reduced the threat level of a terror attack from "severe-general," its highest level, to "substantial," the next highest level" and was not raised in the run-up to the G-8 summit in Scotland.
  • Sophistication of the devices: Much has been made of low tech timers instead of more advanced cellphone initiated devices as used in Madrid, but the depth of the London subways makes cellphone triggering highly problematic, especially when the attacker wants to insure near simultaneous detonation. If suicide bombers are shown to be present, then the detonation sequence becomes far simpler still.
  • Successful 'distance learning': If the attackers prove to be a concealed domestic sleeper cell, it indicates that al Qaeda has achieved a level of web-based distance learning and covert communication that allows it to deliver the needed inspiration and technical details at will.
  • Staging sites seamlessly turn bomb sites: Long compliant governments such as the UK, Spain, and the Netherlands are witnessing the pantheon of militants amongst them effortlessly shift from proselytizing, organizing and staging attacks abroad to carrying out attacks within the host state.
  • Attacker nationalities continue to be our friends: The overwhelming majority of suicide bombers "are citizens of Saudi Arabia and other Persian Gulf countries in which the United States has stationed combat troops since 1990. Of the other suicide terrorists, most came from America's closest allies in the Muslim world - Turkey, Egypt, Pakistan, Indonesia and Morocco - rather than from those the State Department considers "state sponsors of terrorism."
  • Continued pressure on the US and its allies to withdraw from the Muslim world: Attacks on US allies are more efficient than attacks on the US, coercing them to withdraw from Iraq and Afghanistan thereby increasing the economic and military strains upon the US. To that and other aims, an anti-US and anti-Western center continues to rise among the Muslim diasporia in Europe. Pressure on Italy, Denmark, Germany and the UK will rise.

Even as UK authorities run this event to ground, they - and we - need to be alert to very different attack vectors. Although there was a 2002 precedent, as early as May 2005, airports in the UK and US were cautioned of female bombers carrying explosives in their undergarmets, with training to "make security officials feel uneasy about checking such private areas, hoping that one or more female bombers, especially young girls, will successfully be permitted to pass through the screening process... If that plan fails, however, they will detonate the bomb at the checkpoint."

A female suicide bomber, Wafa al-Biss, was discovered at the Erez crossing between Israel and the Gaza Strip carrying 20 lbs of high explosives sewn into undergarments. Discovery was solely due to security officers becoming "suspicious of al-Biss because her gait was strange." How often would authorities in a major UK or US city be so fortunate.

I find it interesting that so little time is devoted to defining asymmetrical success in terms of execution cost versus defender direct and indirect costs. Not only are these terrorist acts increasingly difficult to interdict, they are alluring as they are so efficient. The architect of the siege of Beslan School No. 1, Shamil Basayev, noted that there will be more Beslans as they are so cheap. The three-day siege in which Chechen separatists took more than 1,000 hostages, most of them children, and saw over 300 dead, cost less than ten thousand dollars.

Beslan: Siege of School No. 1
Wide Angle, PBS
12 July, 2005

British Police Revise Time Span of Subway Blasts
By ALAN COWELL
New York Times
July 10, 2005

In London, Islamic Radicals Found a Haven
By Steve Coll and Susan B. Glasser
Washington Post Foreign Service
July 10, 2005

For a Decade, London Thrived as a Busy Crossroads of Terror
By ELAINE SCIOLINO and DON VAN NATTA Jr.
New York Times
July 10, 2005

Al-Qaeda at home in Europe
By Kathleen Ridolfo
Asia Times
9 July, 2005

Al Qaeda's Smart Bombs
By ROBERT A. PAPE
New York Times
July 9, 2005

Al-Qaeda at home in Europe
By Kathleen Ridolfo
Asia Times
9 July, 2005

Analysts Say London Attacks Likely Inspired By Al-Qaeda
By Robert McMahon
RFE/RL
8 July, 2005

UK knew it was coming
By B Raman
Asia Times
Jul 8, 2005

Who's Fighting The Real War Against Islam?
By Joyce Day
RFE/RL
8 July, 2005

London Officials Report Details of Attack and Recovery Snags
By ALAN COWELL
New York Times

British Officials Say They Had No Warning
By DON VAN NATTA Jr.
New York Times
July 7, 2005

Moment a suicide bombing mission failed
By Tim Butcher in Jerusalem
Telegraph (UK)
Filed: 22/06/2005

Video of female suicide bomber's isolation and removal of explosive-laden underwear

Londonistan
By Stephen Ulph
Terrorism Monitor
Volume 2, Issue 4 (February 26, 2004)

Gordon Housworth



InfoT Public  Strategic Risk Public  Terrorism Public  

discussion

  discuss this article

The danger of confusing terrorist interdiction with the consequences of terrorist action

  #

It gives me scant comfort to read:

[Los Alamos has] been constructing the most elaborate computer models of the United States ever attempted. There are virtual cities inhabited by millions of virtual individuals who go to work, shopping centers, soccer games and anywhere else their real life counterparts go. And there are virtual power grids, oil and gas lines, water pipelines, airplane and train systems, even a virtual Internet. The scientists build them. And then they destroy them…

The Los Alamos experiments are part of the Homeland Security Department's efforts to harness technology to aid the war on terrorism. Like government "data-mining" projects that use flight itineraries, credit card reports and other data and try to find patterns to predict who might be a likely terrorist, the simulations are attempts to guess the bigger picture.

Furthermore, when these fervently well-intentioned individuals say after "trying to be the best terrorists we can be," that they're "glad we're not terrorists," we can say that they do not need to worry, as from the standpoint of an asymmetrical attacker they are certainly not.

Scenario-based responses are dangerously omissive. Witness the events now unfolding in London where the UK has had a thirty year history of dealing with a variety of terrorist attacks and bombings. The "scenario" and "lessons learned" of bombing mass transit (see Atocha’s Impact) in Madrid, Spain, was recent and well know yet it did the English little good in interdicting the London attack.

Moreover, scenario-spinning has no end since it has no scope-like business risk statement to bound it, and so efforts continue without end, usually crippling most well-intended protective efforts (paralysis by analysis). Defenders must be able to define a coherent view of their risk tolerance before they can craft a response strategy, a function the defense sector calls a Design Basis Threat (see simple overview.) For a more complex example, see Building Design for Homeland Security and look at the units: Asset Value Assessment, Threat/Hazard Assessment, Vulnerability Assessment, and Risk Assessment/Risk Management.

Commenting to a skilled practitioner that we as a nation are in trouble if facilities such as Los Alamos, and the attentive agencies lulled into complacency over their exercises, are scenario spinning instead of building a sound design base threat, his reply was that such efforts get funded for the time and scenarios that they generate, a process made easy by having large amounts of CPU cycles available to absorb massive amounts of variables. The net is that the scenarios are very useful for estimating consequences (direct and indirect costs) should a similar event occur but that they are virtually ineffective for interdicting the adversary's preparation, surveillance and actual attack.

The federal government is using the simulations to provide options in the event of a real terrorist attack. The information is so sensitive that most of the lab's work is classified, and the physical facility is secured with its own experimental technologies. If the simulations got into the wrong hands, the researchers say, they could be used as the ultimate weapon against Americans. "It would be a terrorist recipe for doing something terrible."

Possibly, but less likely than one might assume. Scenarios generated in this manner are almost always too complex and miss the path of least resistance that an asymmetrical adversary will use to achieve their aim at acceptable risk (where their risk is defined as deferring discovery, mission success and not necessarily the survival of the attacker). (See Bioterrorism Drill TOPOFF 2 -- Failing to think like al Qaeda & relearning old lessons.)

A useful comment on the risks and red herrings of scenarios was included in a discussion of the modeling and simulation of epidemic infectious diseases:

An immediate problem facing the United States is whether to reinstitute routine smallpox vaccination of the entire population. Rational alternatives would be to withhold routine vaccination, and use smallpox vaccine only in "ring immunization" of contacts once cases had appeared, or immediately preimmunize some subset of the population and be prepared to implement ring immunization. Critics of modeling argue that models cannot provide clear evidence for or against any option; advocates counter that the purpose of modeling and simulation is not to provide an answer, but to furnish a tool for improving the decision-making process. Indeed, all decisions are based on models (mental or otherwise), but the use of computational models forces all assumptions to be made explicit, and permits a search for nonlinear intervention effects that may not be discovered using intuitive mental models. Particularly in dealing with a hypothetical threat such as smallpox, models and simulations can allow the testing of intervention strategies in silicon that simply cannot be tested in advance, and could never be tested in a real-world bioterrorism emergency.

The 'advocates' in this context again confuse estimating consequences of similar events with early interruption of target surveillance and interdiction of the attack team. As noted in Acting upon knowledge is different from its gathering:

The alternative to scenario planning is to understand the key actors and processes at play, how they might interact (without locking into "the" prediction), especially in a region and culture so different from our own and one in which our own cultural assumptions could lead to under or overrating events, good and bad.

It is dangerous for any agency or individual to assume that there is definitive merit in scenario planning as it will lull some administration and political decision makers into thinking that these well-intentioned efforts have something to say about the interdiction of the adversary - which they do not.

Incidentally, in the US after Atocha, authorities were left scrambling in a less than effective attempt to reinforce a porous commuter rail system that is not appreciably more secure today. In the face of DHS "raising the threat level from code yellow, or elevated, to code orange, high, targeted only to the mass-transit portion of the transportation sector" with no reported threats to US assets, one is left to wonder if another soothing but ineffective "feel good" security measure that we like to call "guns, gates and guards" is in progress.

Britain launches search for bombers
CNN
July 7, 2005; Posted: 3:55 p.m. EDT (19:55 GMT)

British Officials Say They Had No Warning
By DON VAN NATTA Jr.
New York Times
July 7, 2005

Computers Simulate Terrorism's Extremes
By Ariana Eunjung Cha
Washington Post
July 4, 2005

Microbial Threats to Health: Emergence, Detection, and Response
Mark S. Smolinski, Margaret A. Hamburg, and Joshua Lederberg, Editors
Committee on Emerging Microbial Threats to Health in the 21st Century
Board on Global Health
Institute of Medicine (IOM) OF THE NATIONAL ACADEMIES
NATIONAL ACADEMIES PRESS
2003

Instructor Guide
FEMA E155- Building Design for Homeland Security
FEMA
January 2004

Risk Assessment: A How-To Guide to Mitigate Potential Terrorist Attacks
FEMA 452
Complete Guide
STEP 1: THREAT IDENTIFICATION AND RATING
STEP 2: ASSET VALUE ASSESSMENT
STEP 3: VULNERABILITY ASSESSMENT
STEP 4: RISK ASSESSMENT

Gordon Housworth



InfoT Public  Infrastructure Defense Public  Strategic Risk Public  Terrorism Public  

discussion

  discuss this article

Commercial blindness: a "twofer" attack on the Indian state and US and European outsourcing assets

  #

Documents seized from three members of the Lashkar-e-Toiba (LeT) terrorist group killed in an encounter with the police on Saturday revealed that they planned to carry out suicide attacks on software companies in Bangalore... "The terrorists planned to hit these companies in an effort to hinder the economic development of the country."

The LeT has a history of orchestrating attacks in India and its cadres are well networked, as well as very savvy with computers, gadgets and gizmos, making them very difficult to track. Some of its bold attacks include an attempt to storm the Indian parliament on December 13, 2001, which triggered a military standoff with Pakistan and brought the neighbors close to a fourth war; India also holds the LeT responsible for the killing of 37 and injuring more than 80 Hindu devotees assembled for prayer at the Akshardham temple in September 2002 in the state of Gujarat.

One must wonder how inattentive major US outsourcers can be, and how 'missing in action' that major consultancies such as Forrester can be, so as to not recognize the physical threat to core outsourcing facilities in India. Perhaps it is the mere continuation of the lesser lapse of failing to factor intellectual property (IP) theft risk in supposedly low cost areas. (See Intellectual property theft: the unspoken unknown of offshoring.) Even more curious is the effective absence of concern by Europeans who would normally have an attentive ear to the near and middle east. (The UK has a term EMEA for Europe, Middle East, and Africa to describe their version of the 'Near Abroad.')

The threat to IT and outsourcing assets in Bangalore and Hyderabad should be taken seriously despite the bland denials from Indian authorities who are understandably anxious to protect what amounts to the core of Indian economic revival:

India's software and services exports totalled $17.2 billion in the fiscal year to March 31 this year, up by 34.5 percent from the previous year... [Indian] exports of software and services are expected to grow by between 30 percent and 32 percent in the fiscal year to March 31, 2006. [In the year to March 2005] exports of IT software and services grew by 30.5 percent to $12 billion, while exports of business process outsourcing (BPO), call center, and related services grew by 44.5 percent to $5.2 billion. The growth in exports came despite fierce opposition last year to offshore outsourcing from politicians and workers unions in the U.S. The U.S. accounted for about 68 percent of India's outsourcing exports, with Europe accounting for another 24 percent.

Who can blame the Indians for keeping mum, but where are the US and European firms that should have a fiduciary responsibility to their stakeholders and to their clients who data and business continuity are in the possession of their Indian entities and outsourcing partners?

Bangalore has a large concentration of Indian software outsourcing companies, and a number of multinational companies have software development and chip design facilities in the city. IBM, Intel, Texas Instruments (TI), and Accenture are among those with operations in Bangalore. Two of India's largest software and IT services outsourcing companies, Wipro and Infosys Technologies, have their headquarters and large facilities in Bangalore. Bangalore also has some of India's key defense research and development organizations.

The only thing that the Indians have going for them is that the great unwashed commercial consumers in the West do not know who Lashkar-e-Toiba, Army of the Pure, really is. The South Asia Terrorism Portal overseen by a retired Indian police commander, K.P.S. Gill, is a sound source of basic information, unlike many other Indian sites which are merely anti-Pakistani or nationalistic (the South Asia Analysis Group comes to mind). SATP has much to say about Lashkar-e-Toiba here but I would net it out as follows:

LeT rose as part of the Mujahideen resistance against Soviet occupation in Afghanistan as the military wing of Markaz-ud-Dawa-wal-Irshad (MDI), an Islamic fundamentalist organization rising from Pakistan, where the US has been pressuring Musharraf to curb their activities. LeT's goals go far beyond regaining Muslim control of Jammu and Kashmir to recreating Islamic governance of India in union with other predominantly Muslim states surrounding Pakistan. LeT is now active in Jammu and Kashmir, India, Chechnya, again in Afghanistan from 2002 to date, Iraq, Bosnia and other garden spots. Think of LeT more as educated and skilled than peasants, e.g., an LeT activist, formerly an engineer with Hindustan Aeronautics Ltd (HAL) was arrested 14 May in New Delhi on a flight from Singapore:

The LeT has a history of orchestrating attacks in India and its cadres are well networked, as well as very savvy with computers, gadgets and gizmos, making them very difficult to track.

Like al-Qaeda, LeT cadres are generally not mercenaries out to make a fast buck from the cash-laden terror industry, but indoctrinated youths driven by the desire to kill in the name of a distorted jihad. The LeT derives most of its cadres from Indian Kashmir, as well as Pakistan, while mercenaries are usually renegade mujahideen from Afghanistan, with the intention of keeping the fire of terror burning in Indian-administered Jammu and Kashmir.

[The] terrorists visited Bangalore last December and surveyed the locations of many software firms. Police gathered this information from a diary seized from two captured associates of the slain terrorists. Similar evidence was gathered by the police from laptops recovered from the terrorists who attacked the Indian parliament, revealing detailed mapping of the parliament building before the attack took place. It is also worth noting that it is apparent that the LeT is trying to move beyond Delhi, the other area of its active operation apart from Kashmir, as the capital city has a very powerful intelligence network set up by government agencies to track their presence.

An LeT attack on outsourcers in India is a "twofer" in that an attack damages the Indian state and its ability for economic gain directly, and damages US and European firms indirectly -- where an attack on US soil would be prohibitive in terms of placing surveillance and strike teams on the ground:

Attacking software offices hits at one of the most international symbols of Indian success and could set off a wave of panic from potential foreign investors, as well as multinationals, that could hobble the rapid pace of India's economic progress. Such economic and cultural destabilization can only be the handiwork of international terror outfits that seek out targets that inflict maximum damage to people, as well as pass on a symbolic message.

I would support SATP's opinion that "LeT cadres [are] characterised by a level of brutality, which surpasses that of all other Pakistan-sponsored terrorist outfits active in J&K" and would rank them with the Chechens (also here) and the Algerian GIA (Groupe Islamique Armé) or Armed Islamic Group (also here).

The Jamestown Foundation, whom I respect, has this to say about the ability and likelihood of LeT to carry out attacks in India:

Notwithstanding its rhetoric and ambitions, LeT is unlikely to engage in serious terrorist operations outside the Indian subcontinent. Nevertheless, the potential for it to strike against Western targets in Pakistan and India is all too real, especially since it is under increasing pressure from all sides. Moreover the gradual improvement in India-Pakistan relations may motivate LeT to engage in spectacular operations to sabotage the tentative peace process.

FYI, the Indian home ministry has long been concerned with Muslim activities in the south Indian states of Andhra Pradesh, Karnataka, Tamil Nadu and Kerala which affects the cities of Hyderabad (India's Silicon Valley), Warangal, Nalgonda and Mahboobnagar in state of Andhra Pradesh; Bangalore and Gulbarga in the state of Karnataka; Malappuram and Palakkad in the state for Kerala; and Madras, Coimbatore and Ramanathapuram in Tamil Nadu.

Thoughtful outsourcers there should consider counterthreat and personnel security improvements in addition to IP theft mitigation.

Linkages between Jihadis of Singapore and India
A. S. Smiline Gini
Observer Research Foundation
14 June 2005

India's offshore outsourcing revenues grew 34.5 percent
U.S. accounted for about 68 percent of India's outsourcing exports
By John Ribeiro
IDG News Service
June 02, 2005

Delhi turns to the UN
By Siddharth Srivastava
Asia Times
Mar 12, 2005

The jihad lives on
By Amir Mir
Asia Times
Mar 11, 2005

Terrorists target India's outsourcing industry
Terrorist group planned to carry out suicide attacks on software companies in Bangalore
By John Ribeiro
IDG News Service
March 07, 2005

'LeT planned to target software cos in Bangalore'
Sify News
06 March , 2005

LASHKAR-E-TOIBA: NEW THREATS POSED BY AN OLD ORGANIZATION
By Wilson John
TERRORISM MONITOR
Volume 3, Issue 4 (February 24, 2005)

Lashkar-e-Toiba, 'Army of the Pure'
South Asia Terrorism Portal
2001

Gordon Housworth



Cybersecurity Public  InfoT Public  Intellectual Property Theft Public  Terrorism Public  

discussion

  discuss this article

Accelerated suicide bombings the price of belated negotiations with Sunni nationalist insurgency

  #

I will step out with a prediction that the accelerated, near continuous daily suicide bombings, often comprising multiple coordinated explosions that remove all doubt as to the ability of insurgents to stage redundant attacks by suicide vest or car bomb, will prove to be a bargaining tactic of the "fight and negotiate" strategy by the Sunni, likely Baathist, insurgents.

Were I in their place, I would do exactly that as it all upside and no downside to the insurgents as the suicide bombers are foreign jihadists provisioned, armed and positioned by indigenous Iraqi insurgents, i.e., the jihadists are a no-cost pass through:

Top insurgent field commanders and negotiators informed TIME that the rebels have told diplomats and military officers that they support a secular democracy in Iraq but resent the prospect of a government run by exiles who fled to Iran and the West during Saddam's regime. The insurgents also seek a guaranteed timetable for U.S. troop withdrawal, a demand the U.S. refuses. But there are some hints of compromise: insurgent negotiators have told their U.S. counterparts they would accept a U.N. peacekeeping force as the U.S. troop presence recedes. Insurgent representative Abu Mohammed says the nationalists would even tolerate U.S. bases on Iraqi soil. "We don't mind if the invader becomes a guest," he says, suggesting a situation akin to the U.S. military presence in Germany and Japan.

This is a very pragmatic approach on the part of the insurgency which is stating that it wants to convert itself into a political voice for the now disenfranchised Sunnis. The comparison to, and possible modeling on, the symbiotic workings of the IRA's political wing, Sinn Fein, and the provisional IRA is apt:

[The insurgents] say their aim is to establish a political identity that can represent disenfranchised Sunnis and eventually negotiate an end to the U.S. military's offensive in the Sunni triangle. Their model is Sinn Fein, the political wing of the Irish Republican Army, which ultimately earned the I.R.A. a role in the Northern Ireland peace process. "That's what we're working for, to have a political face appear from the battlefield, to unify the groups, to resist the aggressor and put our views to the people," says a battle commander in the upper tiers of the insurgency who asked to be identified by his nom de guerre, Abu Marwan. Another negotiator, called Abu Mohammed, told TIME, "Despite what has happened, the possibility for negotiation is still open."

I believe that the US administration was foolish to then deny what was undoubtedly a very practical plan that US commanders in private would approve as the US situation on the ground was neither supportable or continuous. (See Looking at implications beyond the lessons learned through establishment eyes.) I suspect that historians will assign cause to an administration concerned of being perceived as weak or as having lost the opportunity for decisive victory (which had long since slipped its grasp). See Had our intelligence analysis only matched our capacity for hubris, Continuance of denial and hubris are not grounds for success, and This resistance is acceptable to us

I have come to the conclusion that the "sectarian violence that I had expected to follow the 72-hour lockdown over the elections" which was deferred to the period of forming an Iraqi cabinet and government was part of the 'fight and negotiate' strategy that showed the Shias, Kurds and other Iraqi groups that a government without Sunnis was untenable, even as it provided an unspoken goad to US willingness to negotiate with the insurgents.

I take odds with the comment that the US military now "seeks to make a distinction between Iraqi insurgents who are attacking U.S. troops because they are hostile to their presence, and foreign insurgents responsible for most of the suicide bombings." (It is not quite that simple as the US faces Zarqawi’s jihadists, former Baathist, Sunni Arab nationalists and criminal gangs.) Early talks were said to include insurgent groups Ansar al-Sunna, Islamic Army in Iraq, the Iraqi Liberation Army; Jaish Mohammed and other smaller factions. Later talks included Thawarat al-Ishreen and the Shoura Council of Mujahideen.

My opinion is that when the Baathist/Sunni national insurgents get the terms they want that they can turn off the flow of jihadists and deal forcefully with the jihadist groups then in country as well as the criminal gangs which operate as an opportunistic "farm team" to the insurgents, i.e., just deal with the Sunnis as they are the ones with whom a negotiated settlement is possible and palatable and who can extinguish the jihadists and control the gangs.

Thus while I find it appropriate to negotiate with the insurgents, I find our approach a bit highhanded given our wish to again grasp 'peace with honor' and disengage. I believe that history will assign much of the death toll upon Iraqi police and civilians and US forces that form an essential part of the Insurgent negotiating strategy to US making.

U.S. Talks With Iraq Insurgents Confirmed
By Dana Priest
Washington Post
June 27, 2005

US 'in talks with Iraq with Iraq rebels'
Hala Jaber
Times (UK)
June 26, 2005

US Denies Talks with Iraqi Insurgency Leaders
By Al Pessin, Pentagon
VOA - Voice of America
22 February 2005

U.S. Holds Secret Talks With Insurgents in Iraq
Reuters
February 21, 2005

Talking with the Enemy
By MICHAEL WARE
Time Magazine
Posted 20 Feb, 2005, Issue Feb. 28, 2005, Vol. 165 No. 9
Scrolled to archive
Mirrored here

Gordon Housworth



InfoT Public  Strategic Risk Public  Terrorism Public  

discussion

  discuss this article

Convergence of PCs and smart mobile devices falls prey to a new generation of attacks

  #

Watching the convergence of PCs, now that laptops consistently outsell desktops, and the sector of "mobile devices with an operating system" that comprise PDAs and smart phones, it is easy to see miniaturizing notebooks that increasingly communicate begin to blend with the smaller devices, mimicking the characteristics and ultimately falling prey to the same threats that are predicted to afflict the mobile market of PDAs and smart phones in the 2008-2009 period.

The upshot of this convergence is that current architecture of PC antivirus protection will begin to fail this emerging 'mobile majority' and that the excellent but long overdue cooperation between Microsoft and hackers and independent security consultants will have to be accelerated at a rate that substantially exceeds current planning if robust solutions are to be found.

Consider how short a time horizon with which we are dealing. The first viruses for mobile devices, Duts for Pocket PCs and Cabir for devices using the Symbian OS, were written in 2004 as a proof of function "not designed [to] propagate on a massive scale" by the 29A VX virus writing group. Users were told not to worry, that you're "more likely to have a meteorite strike your house" than see infection by these viruses. A year later viruses on Pocket PCs are not yet a significant issue, except in pockets of Asia and Europe, to the point that skilled users I know do not carry virus protection in their base load. (But then these users are disciplined enough to limit their IM traffic to only those whom they trust.)

But the threat migration from email systems currently buttressed by gateway and desktop antiviral tools has begun to move to IM (Instant Messaging), IRC (Internet Relay Chat), P2P (peer-to-peer) and CIFS (Common Internet File System) protocol for remote file-system access use over the Internet. In March 2005, Symantec reported threats "related to P2P, IM, IRC, and CIFS make up 50 percent of its top 50 threat submissions, up from" a third a year earlier.

The key to becoming a target is to have a significant mass of users and an exploitable vulnerability for propagation. (Even Macs will become a target as less skilled users adopt mini Macs.) For mobile devices, the necessary conditions required for propagation will converge about "year-end 2007 [when] smart phones account for 30 percent of all wireless telephones in use":

  • Commonplace "large-scale user-to-user sending [of] complex executables
  • User community of a third or more of the population

I submit that increasingly miniaturized laptops will have the same characteristics and suffer similarly, yet the PC market and the major software vendors are still behaving as if perimeter/barrier tools will suffice. Gartner has already called the mobile market out:

The mobile world should not repeat the mistakes of the PC world. Malware protection services should be built into the network first, and device-side protection should be the last resort."

Thoughtful players are already calling for tools at the network layer that detect behavioral and network traffic anomalies:

Signature-driven antivirus tools are great for hindsight, but we are at a turning point where signatures are not enough…Currently the attackers are testing their tools against the most popular antivirus products [so as to produce immunized attacks].

I find it curious that experts can say that that "desktop antivirus software became largely ineffective [as proactive prevention] as soon as e-mail surpassed floppies as the dominant transmission mechanism" as a means of justifying better network layer tools for mobile devices yet ignore the rise of laptops that will increasingly operate in much the same way.

It should be a reminder to all that attackers move to whatever point in the supply chain or the delivery chain where there is maximum opportunity at minimum risk. Just as we remind clients in Intellectual Property (IP) protection that they must think in terms of total asset protection (wherever that asset appears by tier, application, and location) instead of location solely (where the client fixes on a particular site or facility where they believe that they have exposure), so will crackers migrate to the next weakest point - targets of opportunity - in the software delivery system to the enduser.

If perimeter and desktop deterrents are not going to work as a sustaining architecture and the antivirus vendors are going to be treated as a major exploit targets equal to the applications that they protect, work on intelligent network defenses, regardless of design difficulty, best should get underway immediately lest the growing 'mobile majority' finds itself at grave risk.

Clock's ticking on phone virus outbreak, experts say
By Munir Kotadia
ZDNet Australia
Published on ZDNet News: June 21, 2005

Security tools face increased attack
By Joris Evers
CNET News.com
Published on ZDNet News: June 20, 2005

Microsoft asks for help from hackers
By Ina Fried, Special to ZDNet
Published on ZDNet News: June 16, 2005

Skulls Trojan puts on antivirus mask
By Joris Evers, CNET News.com
Published on ZDNet News: June 10, 2005

Expert: Cell phone virus threat is overblown
By Will Sturgeon, Silicon.com
Published on ZDNet News: May 5, 2005

Hackers reach beyond Windows, IE
By Robert Vamosi, CNET.com
Published on ZDNet News: March 21, 2005

Gordon Housworth



Cybersecurity Public  InfoT Public  Strategic Risk Public  

discussion

  discuss this article

Sharp, suspicious escalation in state-sponsored violence against peasant resistance

  #

Part 2

A marked escalation of government force has just occurred in Shengyou, Hebei province, southwest of Beijing. Of those confrontations that have come to media notice, Shengyou has become "one of China's deadliest incidents of rural unrest":

  • Attacking toughs fired on the peasants with "hunting shotguns and flare guns" even though firearms are "strictly regulated in China"
  • Men sent to route the peasants "appeared to be hired thugs rather than police"
  • Casualty rates were high, six peasants dead and many as a hundred others "seriously injured"

The attack occurred on 11 June and was first reported Monday [13 June] in the Beijing News (Xinjing bao), a "state-run tabloid known for testing party censors" but that might change as rumors are out that Beijing Media Corporation's acquisition of Chinese media firms will include the Beijing News, presently owned by the Guangming and Nanfang Newspaper groups:

Hundreds of men armed with shotguns, clubs and pipes on Saturday attacked a group of farmers who were resisting official demands to surrender land to a state-owned power plant… Six farmers were killed and as many as 100 others were seriously injured in one of China's deadliest incidents of rural unrest in years.

Residents said the men arrived in six white buses before dawn, most of them wearing hard hats and combat fatigues, and they struck without warning, repeatedly shouting "Kill!" and "Attack!" Police failed to respond to calls for help until nearly six hours later [long] after the assailants had departed.

The pattern was familiar: In 2003, the Hebei Guohua Dingzhou Power Plant announced that it would build a coal ash storage facility on land expropriated from 13 villages. Shengyou refused to cede as farmers commenced camping on the disputed land in the fall of 2003. Police from the nearby city of Dingzhou, which governs Shengyou, blockaded to prevent access to food and water. Villagers responded with a 24/7 watch and digging foxholes and trenches to prevent seizure by the authorities. Villagers fought off a smaller attack by toughs, not police.

The change was the massed attack by heavily armed toughs intent on inflicting fatal bodily harm as opposed to police or paramilitaries normally armed with riot batons and tear gas, against whom charges of killings or undue force would have political repercussions. China is a closely monitored society in which the public solicitation, organized transport, and arming with strictly controlled weapons could not have happened without approval of at least the local authorities.

Villagers smuggled a reporter through a police cordon surrounding Shengyou, leading "him to a vast field littered with abandoned weapons, spent shell casings and bloody rags." The reporter was furnished with footage from a farmer that managed to film part of the attack before being beaten himself.

The farmers remain in control of the land, occupying the local Communist Party headquarters and exhibiting a foul view of local political, administrative and police cadres, but given the value of the power plant, it seems unlikely that the authorities will relent. A relative low profile response would be, as in Huaxi, to bring in plainclothes police and attempt to identify the village resistance leaders.

Chinese Peasants Attacked in Land Dispute
By Philip P. Pan
Washington Post
June 15, 2005

Shengyou Attack video
Washington Post
June 14, 2005

For Chinese, Peasant Revolt Is Rare Victory
By Edward Cody
Washington Post
June 13, 2005
Time-sequence
diagram of the Zhuxi Industrial Park

Gordon Housworth



InfoT Public  Strategic Risk Public  

discussion

  discuss this article

Sufficiently violent suppression may hold the line against peasant unrest

  #

Part 1

"I'm a public official. If this guy causes me more problems, I'll pay 20,000 kuai [about $2,500] and have him knocked off." - Verbal threat spread by eyewitnesses via by mobile phones, text messages and word of mouth resulting in an instant protest of 30,000 to 70,000 people in Wanzhou.

Given that rural resentment "against corrupt local officials, pollution, land seizures, and the growing wealth gap between the urban rich and rural poor" will only rise in the short to medium term, I would expect rural resistance and demonstrations will continue rising in number, intensity and casualties. And given that the CCP has not the means to placate the farmers or quell the hosts of self-interest and corruption, that it will resort to rising suppression combined with an "after action" plainclothes police presence to identify and punish instigators and supporters, and the sacking local officials that fail to prevent recurrences.

Articles from the New York Times and CNN cite similar statistics (and Asia Times cites Outlook Weekly as the source):

Police statistics show the number of public protests reached nearly 60,000 in 2003, an increase of nearly 15 percent from 2002 and eight times the number a decade ago. Martial law and paramilitary troops are commonly needed to restore order when the police lose control.

The Times continues:

China does not have a Polish-style Solidarity labor movement. Protests may be so numerous in part because they are small, local expressions of discontent over layoffs, land seizures, use of natural resources, ethnic tensions, misspent state funds, forced immigration, unpaid wages or police killings. Yet several mass protests, like the one in Wanzhou, show how people with different causes can seize an opportunity to press their grievances together.

The shangfang, a system of petitioning the government used by Mao Zedong forward to present a benevolent face to what was in effect imperial rule, is no longer working and its failure eliminates the only grievance channel available to the poor or unconnected:

petitions to the central government had increased 46 percent in 2003 from the year before, but that only two-hundredths of 1 percent of those who used the system said it worked.

Peasant/farmer activism has shifted in priority and location as tax disputes concentrated in central China have been replaced by land disputes in "more developed coastal areas" where encroaching economic development makes land more valuable than that in the center, can be "sold immediately, and this makes local governments try to control it." Land use and health of the land under cultivation is a binary survival decision for farmers yet any greening of the Chinese environment will continue to face daunting political, economic and human barriers:

  • Implementation is beastly difficult on the ground: "Local officials, either colluding with corrupt local businesses or believing that nothing must be allowed to slow economic growth, take the traditional view that the "mountains are high and the emperor is far away.""
  • Absence of the rule of law: environmental regulations are unenforced and offenders go unpunished.
  • Environmentalists and democratic activists are fellow travelers: convergence of aims between the pair could put environmentalists in the crosshairs if the CCP cracks down on activists. At the least, I think that, all things being equal, the liberal relationship is a break on environmental efforts.

There are a small but rising number of protests in which the farmers carry the day and remain in control (at least temporarily) of disputed land. Where as many as 100,000 farmers in Sichuan Province barring work on a hydroelectric dam after months of appeals were routed by 10,000 paramilitary troops, some 20,000 farmers routed an estimated 3,000 policemen and civilians assigned to destroy a blockade of the Zhuxi Industrial Park containing "13 private and joint state-private factories [eight of which] produced chemical products [while] others worked with plastic."

While 6 of the 13 factories were ordered to leave Huaxi, uniformed and plainclothes police have "established a heavy presence in Huaxi and local residents have been enlisted in the hunt for those responsible for the peasant rebellion [while] a "system of punishment and prevention" has been put into place to create a "harmonious society." The authorities' next step is "to investigate some party members who were believed to be leaders of the riot."

Part 3 Escalating state response

For Chinese, Peasant Revolt Is Rare Victory
By Edward Cody
Washington Post
June 13, 2005
Time-sequence
diagram of the Zhuxi Industrial Park

EastSouthWestNorth is an excellent China blog with good translations and thoughtful positioning of sources as to their to their bias whether they are government, NGO or private:
The Long Story About Huaxi/Huankantou
1 June, 2005
Citizen Reporters On The Huankantou/Huaxi Incident
24 May, 2005
Q&A about Huaxi/Huankantou
24 April, 2005
Excellent links to articles (some of which have scrolled off or been blocked by censors, but in such cases a mirror is often provided.)

Thousands of Chinese Villagers Protest Factory Pollution
By JIM YARDLEY
New York Times
April 13, 2005

China's 'Haves' Stir the 'Have Nots' to Violence
By JOSEPH KAHN
New York Times
December 31, 2004
Scrolled to
archive
Mirrored here and here

China faces up to growing unrest
By Paul Mooney
Asia Times
Nov 16, 2004

Scrapping safety-valve petition could backfire
By Antoaneta Bezlova
Asia Times
Nov 11, 2004

Massive Protest by Sichuan Farmers Squashed by Police
The Epoch Times
Nov 10, 2004

Significant shift in focus of peasants' rights activism
Interview with rural development researcher Yu Jianrong of the Chinese Academy of Social Sciences (CASS)
Written by Zhao Ling; translated by Manfred Elfstrom
Southern Weekend
Date Published: September 3, 2004

The Great Chinese Land Grab is on
By Xia Yunfan
Asia Times
Jul 17, 2004

Gordon Housworth



InfoT Public  Strategic Risk Public  

discussion

  discuss this article

Pollution, expropriation and seizures spark increasing Chinese rural resistance

  #

The Chinese Communist Party (CCP) is acutely aware that its pursuit of economic success to legitimize its leadership (see China's opposing arcs: population and productivity) has created widespread (but heretofore pocketed and disenfranchised) popular discontent and undermined its claim to legitimacy due to rises in corruption and the decline of China's social welfare system and environmental health. The prosperous coastal regions and enterprise zones are favored to the exclusion of the less prosperous interior regions.

The bias is so great that we see a principally internal Chinese inter-province outsourcing that moves high pollution industries inland to rural areas that have had no voice heretofore yet whose citizens desperately cling to any short-term job prospect in the same factories that simultaneously compromise their land and water. Almost all Chinese media pronouncements are happy talk as are most releases from the CCP bureaucracy. Rare exceptions are at the affected provincial level, notably the Jiangsu Environmental Protection Bureau (JEPB):

[As major Chinese cites reduce their pollution in part to satisfy] urbanites with rising incomes [that] are demanding better air and water [the] countryside, home to two-thirds of China's population, is increasingly becoming a dumping ground. Local officials, desperate to generate jobs and tax revenues, protect factories that have polluted for years. Refineries and smelters forced out of cities have moved to rural areas. So have some foreign companies, to escape regulation at home. The losers are hundreds of millions of peasants already at the bottom of a society now sharply divided between rich and poor.

Elizabeth Economy, author of The River Runs Black, a study of the Huai basin of rivers and canals the size of England, believes that China's approach to environmental protection and economic development have similar roots with similar impacts:

devolving authority to local officials, opening the door to private actors, and inviting participation from the international community, while retaining only weak central control. The result has been a patchwork of environmental protection in which a few wealthy regions with strong leaders and international ties defend their local environments, while most of the country continues to deteriorate, sometimes suffering irrevocable damage.

"No doubt there is an economic food chain, and the lower you are, the worse off your environmental problems are likely to be. One city after the next is offloading its polluting industries outside its city limits, and polluting industries themselves are seeking poorer areas."

The pollution levels are extraordinary and constitute a threat that I think has not received sufficient coverage inside and outside China; The impact is so deep and pervasive that I have the impression that it ranks as a human rights violation, a point that I've previously made in private correspondence. I believe that China is (has) surpassed the industrial destruction wreaked in the DDR (East Germany) and the USSR in and around the Ural Mountain range by the Soviets:

[C]hildren in [major Chinese] cities inhale the equivalent of two packs of cigarettes a day just by breathing… With its surging economy, China has depleted its own natural resources and is now draining resources from other states as well. Its insatiable demand for wood, for example, has already deforested much of the country-leading to erosion and flooding-and is now threatening the tropical forests of Southeast Asia as well. By 2020, according to predictions, 25 percent of China's arable land will be gone, water needs will be up by 40 percent, wastewater will increase by almost 300 percent, and sulfur dioxide emissions will be up 150 percent.

Add to this continued seizures of farmland by local Communist officials for factories, dams, roads and other projects "often for personal profit" by local cadres and entrepreneurs, which in turn adds more pollution while further marginalizing peasants, and the CCP reaps widening social unrest in rural areas that is increasing volatile and now violent. Without recourse to more systemic levers of change, the party has resorted to stonewalling and repression that has depended upon relative isolation and a media blackout. Technological changes are weakening the latter as peasant frustration is fighting the former.

Part 2 Rising rural resistance

Thousands of Chinese Villagers Protest Factory Pollution
By JIM YARDLEY
New York Times
April 13, 2005

The state of pollution
By Florence Chan
Asia Times
Mar 16, 2005

The Present and Future of China
NPR audio series on China, 2004-2005

Rivers Run Black, and Chinese Die of Cancer
By JIM YARDLEY
New York Times
September 12, 2004
Scrolled to
archive
Mirrored here and here

Four part series by Jasper Becker in Asia Times:
Part 1:
The death of China's rivers, Aug 26, 2003
Part 2:
Peasants bear the brunt of energy plans, Aug 27, 2003
Part 3:
China in an energy quandary, Aug 28, 2003
Part 4:
China awakens to its devastated environment, Aug 29, 2003

Gordon Housworth



InfoT Public  Strategic Risk Public  

discussion

  discuss this article

Trying to define the trends and timing of a Pax Americana

  #

Part 3

Ambrose Bierce described truth as "An ingenious compound of desirability and appearance" and so it remains today. One of the difficulties in projections such as in A possible Pax Americana end game is timing - the timing of individual events in an event sequence and the total time horizon over which the forecast is presumed valid, possible mitigation events - pro and con, and the assumptions that underpin it all. (I find underlying assumptions and timing to be more useful than the predictions themselves.)

I make a habit of periodically reviewing my earlier forecasts for accuracy in content and timing, and a determination of which underlying assumptions remain valid and for those that are not, why not. While this can be a bracing exercise, humbling in various respects, it is an invaluable learning experience for content and process, and for restraining ex cathedra pronouncements that imply more solemnity than they deserve. If you fancy yourself a systems thinker or are interested in flagging secondary and tertiary effects, I recommend the process highly. At a minimum, it will drive you from single-loop learning, e.g., asking what could we do better, to double-loop learning, e.g., asking if we are asking the right questions and then asking about better or worse. (If you get that far, you will have exceeded what almost every US corporation does in applied knowledge.)

While I number among those who believe that the long term trends of the US are not excellent without significant internal and external mitigations, in the limited time that I have to devote to it, I am still trying to determine conditions to when, how, and if. Forecasts are often deeply misleading, e.g., we habitually assume adoption rates in technology and societal change at far faster rates that history indicates even as we omit the emergence of new players and technologies that cause radical mediation shifts, for or against us. We make global forecasts of relative changes of nation states over too short a time frame while not properly examining the underlying trend lines. Both often lull us into a false sense of security.

There is a cautionary tale in forecasting economic realignments among nations that falls squarely on the predictions that we are discussing here with regards to the reign of Pax Americana. Still worth reading today is Paul Kennedy's The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000 published in 1987, in which he predicted that advantage would slip from the USSR/Russia, the US and the EC (now EU) while it would accrue to Japan and China. Kennedy flagged the US and USSR as afflicted by "military overstretch" rising from the "spiraling cost of the arms race" coupled with a decline in economic investment and growth, while Europe would continue to face decline unless it achieved unification, a condition upon which Kennedy had some doubt.

In the interim Kennedy has been criticized for making predictions that "have not fared well over the past decade and more." I will address two of them, both of which now suffer in their own counter predictions although one is far more thoughtful than the other and presents a better assumption set. Henry Nau took Kennedy to task in 2001 in Why ‘The Rise and Fall of the Great Powers’ was wrong:

Russia did indeed continue to decline, but not for the reasons Kennedy argued. Russia kept sinking even after it shed the burdens of the Soviet empire and military interventions in Afghanistan and elsewhere. The other powers that Kennedy predicted would decline did not decline at all. The United States experienced a spectacular rebirth, not only ‘winning’ the Cold War but becoming once again the dominant economic power in the world. The European Union (EU) also surged ahead to create a single market and common currency and, despite an initially weak euro, enjoyed steady growth at the end of the 1990s. By contrast, the Pacific region, which Kennedy predicted would rise in relative power, floundered. Japan hit a big pothole in the early 1990s and is still struggling at the beginning of the new millennium to crawl out of a decade-long economic slump. China slowed down to 3–4 per cent annual growth (after subtracting excess inventories) from a previous level of 10–12 per cent growth and faces potentially crippling problems of unemployment, corruption, and social unrest. The rest of Asia suffered a severe financial crisis in 1997–98 and began a long process of restructuring from export-led manufacturing growth to information-oriented service activities, including, in particular, a more competitive domestic banking and financial industry. The ‘Asian Miracle’, in short, aborted; and the ‘rise of the Pacific region’ quickly turned into a trouble-laden stall.

Things look rather different in 2005, a mere four years later. The EU is in disarray while China has surged as has India which achieved hardly a mention. The GWOT was unknown. Nau's saving grace is to flag the issue of time horizon:

Kennedy was dealing with trends over centuries. It is possible that the American and European renaissance is a temporary blip and that Japan and other Asian nations are poised to resume their meteoric rise. Russia and China too may just need more time to adapt to a rapidly globalizing world economy.

I would recommend reading Nau, as Kennedy, for the assumptions and trends that both consider. A forecast that is not fairing quite as well in my estimation is Dinesh D'Souza's 2000 The Virtue of Prosperity: Finding Values in an Age of Techno-Affluence which is far more coarse in its criticism of Kennedy ("Never was a book so spectacularly discredited by events."), has little of the insight of Nau, and is virtually hagiographic in depicting the US as enjoying "unprecedented domination over the political, economic, cultural, and technological life of the world." I think not.

Rather than read the entire book, you can find a cache of the introduction and first chapter here. Contrast that with the reality of The world is flat save for the depression that we occupy: Friedman on global opportunity and competition.

I'll close this note with a highly recommended (and short) WAR-RELATED DEFLECTIONS OF ECONOMIC TRENDS in which Krus, Nelsen and Webb put at once to shame the fallacy of making linear growth assumptions as it compares and extrapolates three centuries of economic trends of Eastern and Western civilization.

Their work is also a good example of mitigation - good for the West and bad for the East - in that the trend convergence following World War I was deflected by World War II, without which the "combined economies of the Far East countries appeared likely to surpass the industrial output of Western countries" by 2010-2020. The mitigation of World War II "delayed the projected intersection of these trends" to the 2040-2050 period, a figure that fits well with other economic forecasts.

Sound forecasting is not a sport for the faint of heart.

Washington's Pax Americana smacks of Roman power game
By Paul Kennedy
The Australian
August 04, 2003

Why ‘The Rise and Fall of the Great Powers’ was wrong
HENRY R. NAU
Review of International Studies (2001), 27, 579
–592

The Virtue of Prosperity: Finding Values in an Age of Techno-Affluence
by Dinesh D'Souza
The Free Press
January 2000
Cache of the introduction and first chapter

WAR-RELATED DEFLECTIONS OF ECONOMIC TRENDS
From War-related deflections of economic trends in Eastern and Western Civilizations
Krus, D.J., Nelsen, E.A. & Webb, J.M.
Psychological Reports, 84, 1021-1024, 1999

The Rise and Fall of the Great Powers: Economic Change and Military Conflict from 1500 to 2000
Paul Kennedy
Random House, 1987

Gordon Housworth



InfoT Public  Strategic Risk Public  

discussion

  discuss this article

A possible Pax Americana end game

  #

Part 2

It is disturbing to see the opinion of the gold subculture or "gold bugs" merge with mainstream economists, i.e., those that accept an economy denominated in something other than gold, and that does not leave me sanguine. I find merit in one gold bug's opinion that "the health of the dollar reflected in the price of gold, and the health of the dollar is now in foreign hands" lays out a progression that "foreign banks will diversify out of dollars [then] cease buying dollars [and] then they will sell them." I put even more merit in this gold trader when he adds that "Anyone cheering for a high price of gold should get on Prozac" as a healthy dollar will retain its position as a global reserve currency while gold demonetizes and remains at a commodity level but that a "mismanaged dollar" drives gold to rise in value, remonetizing in the process.

I should note that these opinions are unmoved by 9 June testimony by Federal Reserve Chairman Alan Greenspan that:

"Despite some of the risks that I have highlighted, the U.S. economy seems to be on a reasonably firm footing, and underlying inflation remains contained."

One can work wonders in a forecast by adjusting the range and underlying assumptions in what is a charged political atmosphere. Observers said that the testimony "heralded a continuation in the Fed's rate-rise campaign." T-bills prices eased and dollar weakened accordingly.

The gold subculture voices the same underlying concerns as traditional economists: consumer debt, federal deficit, and current account deficit that have driven the US into a debtor state of such magnitude that international concerns over the dollar are striking. Saddam Hussein was one of the first to promote the use of the Euro as an oil denominated currency in lieu of the dollar, albeit as a form of economic warfare. Russia has now warmed to the same idea as had Iran and China. (All this occurred before the Euro began to drop against the dollar in the aftermath of the French and Dutch 'no' votes on the European constitution, so it remains to be seen how much further this shift will proceed in the near-term. The point that I would make is that the dollar has weakened and other states are increasingly open to alternative currencies.)

The cessation in buying dollars is in evidence in the purchase of US treasury bonds by Asian central banks, notably Korea. (China keeps buying but I put that to Beijing's willingness to accept a depreciating dollar in return for rising economic growth and social peace at home.) An increase in cessation is not pretty:

A low-level panic about the debt crisis, and its possible effect on the American economy, is gathering strength. [Morgan Stanley's chief economist says that] "Our little post-bubble workout is not over, not by any stretch of the imagination" and believes that an adjustment is necessary and inevitable, and that when it comes, it will be very, very painful.

[Former Federal Reserve chairman, Paul Volker, added] that "there are disturbing trends" undergirding the U.S. economy, including "huge imbalances, disequilibria, risks [that demand] a strong sense of monetary and fiscal discipline [which is not in evidence by either US nationals or the US government such that] the circumstances seem to me as dangerous and intractable as any I can remember."

And if that does not get one's attention, the US Comptroller General, David Walker, summarized the long-term US debt crisis, assuming no mitigation, as "Argentina."

Part 4 Trends and timing

Believing (and Believing and Believing) in Bullion
By STEPHEN METCALF
New York Times
June 5, 2005

Military Obsession
Oscar Lurie, Associate Research Analyst
Center for Defense Information
Weekly Defense Monitor, Volume 3, Issue #05, February 4, 1999
Original has scrolled to
archive
Recover it from cache here (use escape key to bypass the login request box)

Gordon Housworth



InfoT Public  Strategic Risk Public  

discussion

  discuss this article

Prev 1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  [23]  24  25  Next

You are on page 23
A total of 68 pages are available.

Items 221-230 of 672.

Pages: [1 - 25] [26 - 50] [51 - 68]


<<  |  July 2014  |  >>
SunMonTueWedThuFriSat
293012345
6789101112
13141516171819
20212223242526
272829303112
3456789
view our rss feed