What’s the biggest threat to your wealth?
Is it Vladimir Putin in the Kremlin?
Is it Islamic ‘terrorists’ in Iraq?
Or is the threat from cyberspace?
It was a question we asked (and hopefully answered) at the World War D conference in Melbourne earlier this year.
Free Reports:
Now the subject is front page news, and Australian Securities & Investments Commission head Greg Medcraft is on the case…
The Financial Times reported on Mr Medcraft’s comments relating to cyber warfare:
‘The issue of cyber resilience is a bit of a sleeper issue, and one that we have to be proactive [about] in terms of making sure the risk management approach is robust… Cyber crime has a huge potential impact on markets… The next black swan event will come from cyber space. It is important that we pay attention.’
Of course, claiming to know the next black swan event immediately removes it as a black swan event.
The whole point of black swan events is that no one knows what they will be. You can’t predict them. Many people wrongly label the 2008 meltdown as a black swan event.
It wasn’t. Many people predicted that it would happen. The founder of our company, Bill Bonner, started writing about the coming financial collapse as early as 1999.
Folks in the mainstream have taken to calling it a black swan event to cover up their incompetence and recklessness.
The reality is that the meltdown was predictable. In the same way, intense cyber warfare is predictable too.
Our old buddy Sam Volkering has been all over the cyber warfare topic for the past year…if not longer. In fact, Sam’s writings on cyber warfare were a big influence on the theme of the World War D conference.
He’s so concerned about it that he tipped two cyber security stocks in the October 2013 issue of Revolutionary Tech Investor.
The fact that cyber security is front page news should be a warning that a major event is bound to happen at some time.
But how can we be so positive that a major cyber terrorism event is on the cards?
We prefer to flip the question around. How can anyone be sure that it isn’t inevitable? So far we don’t know of anyone who thinks it’s a 0% risk.
Most tech heads seem to think that it’s only a matter of time before a big event happens.
To us that makes perfect sense. Just look at the widespread nature of connected technology and networks. The simple fact is that wherever there is a link into any network there is always the potential to exploit it.
Earlier this year we read a book by Richard Clarke, the former National Security bigwig for the US government.
The title of Clarke’s book is Cyber War: The Next Threat to National Security and What to Do About It. It’s an interesting read. You can download it to a Kindle for just a few bucks.
One of the points of the book is that in offices the length and breadth of the world, there are devices that can tap straight into a company network. We’re not talking about the obvious such as PCs, laptops, mobiles and tablets (although these are all potential ‘gateways’ for hackers).
We’re talking about the devices that most people don’t realise have network potential.
The most common are printers and photocopiers. But it could be any number of things…even vending machines! It’s easy for any hacker worth his or her salt to ‘gatecrash’ a network using something as basic as a photocopier.
It means that all the millions and billions of dollars that companies and governments spend on securing networks could count for nought.
Since the 1990s, network-capable printers and copiers have been a standard feature in any office. In the old days, these would have needed a fixed wire connection into the network.
Today, they are wireless. That makes it even easier for hackers to hack into the machine and therefore into a company’s network.
This is what we mean when we say it’s certain that a major cyber warfare attack will happen. As the old saying goes, a chain is only as strong as its weakest link.
The same goes for networks.
Perhaps there’s something to the argument that the next crisis to hit the financial markets won’t be a money crisis. Instead, maybe it will be a cyber crisis that causes huge damage to the entire financial system.
Cheers,
Kris+
PS: Today we mentioned tech analyst Sam Volkering. We just received a note from him saying that this October he’s off to the Black Hat Europe 2014 conference in Amsterdam. If you don’t know it, it’s one of the world’s biggest events devoted to cyber security. We’re looking forward to hearing Sam’s report of the event. Stay tuned. Meantime, remember to check out the details of Sam’s presentation to the World War D conference here…
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