Cyber Attacks Growing In Frequency – Entire Western Financial System Is
Vulnerable
The threat posed by cyber war to our increasingly complicated,
technologically dependent and vulnerable financial institutions, markets,
banks and indeed deposits becomes more clear by the day.
British and US agents will carry out a mock cyber attack or ‘cyber
war games’ on the Bank of England and commercial banks in City of London and
on Wall Street in the coming months as part of tests on critical, but
vulnerable financial infrastructure.
Should banks be hacked and customers deposit accounts compromised
then the vista of potential bail
ins becomes a real one. In June, JP Morgan Chase were hacked by unknown
parties who stole the personal details of 83 million customers.
In July of last year Bloomberg reported that malware had been detected
in the system of the Nasdaq exchange. It’s purpose was unclear but it was
believed to have been embedded there by Russian hackers.
There is also the alleged hacking of Sony Pictures by North Korea and
the alleged hacking of Facebook, Instagram and Tinder yesterday.
David Cameron announced measures two weeks ago that he said were
designed to help companies, government organisations and banks and prevent a
repeat of hacking attacks.
The alleged busting of a Russian spy-ring in New York on Monday, for
gathering intelligence that could be used for “destabilisation of the
markets” highlights yet again that the threat posed by cyber-warfare is a
growing one.
The accused is a journalist working for The News Organisation, a
Russian media company which is used by Russia’s SVR intelligence agency to
gather information according to a statement issued by the U.S. Department of
Justice on Monday.
The claim was made based on an intercepted conversation where the
accused discusses with another Russian – a banker based in New York – what
three questions he should ask the “New York Exchange.”
His associate suggests looking at ETFs: “How they are used, the mechanisms of
use for destabilization of the markets.” He adds, “Then you can ask
them what they think about limiting the use of trading robots. . . . You can
also ask about the potential interest of the participants of the exchange to
the products tied to the Russian Federation.”
While the claim that this conversation is evidence of espionage is a
flimsy one, it along with recent events serves to highlight the vulnerability
of the internet, our websites and the financial system – a system that has
grown so vast and unwieldy that managing security has become and ad hoc
process.
Yesterday morning social networks Facebook and Instagram were allegedly
hacked by ‘Lizard Squad’, a group of hackers apparently sympathetic to ISIS.
The group have previously hacked Malaysian Airlines.
The first high-profile case of nation-states using cyber-warfare was the
unleashing of the “stuxnet worm” – apparently created by Israel and the US –
on Iran’s nuclear energy enrichment plant in Netanz in 2010. It almost caused
a major environmental catastrophe.
In 2012, Iran devastated the computer network of Saudi Aramco in a
similar attack.
From the above examples we can see a panorama of human activities which
grow more vulnerable as hackers and cyber-warfare grow more sophisticated.
Russia’s Prime Minister, Medvedev, yesterday warned that if the US succeeds
in it’s plans to cut Russia out of the SWIFT banking transfer system, then
the “Russian response – economically and otherwise – will know no limits.”
Given that a military confrontation is not desired by Russia it would
seem that cyber-warfare will certainly be part of the mix that Medvedev
alludes to.
Banks have been hacked, stock exchanges have been hacked and critical
infrastructure have been hacked in recent years. It is likely that many of
these small scale attacks have been merely testing of defenses.
A concerted attack on the western financial system would likely include
attempts at disabling various exchanges including stock markets and foreign
exchange markets. Banks could be attacked in such a way that bank balances,
which are merely digital figures, could be erased.
In a worst case, scenario such attacks could be done in conjunction
with countries hostile to the West dumping vast quantities of dollars onto
the market.
In such an environment the West, which is so dependent on technology
and the monetary system, would be economically paralysed and the primary
wealth that would remain would be tangible wealth.
Tangible assets include gold and
silver bullion, agricultural land, water, property etc. We are not
predicting such an outcome. We are simply looking at the facts as they are,
in the context of intense geopolitical tensions, and surmising that it would
be prudent to take necessary precautions.
New York Mayor Bill de Blasio put it well yesterday regarding the snow
storm and echoed something we have been saying for many years now: “We
obviously missed the worst of the storm.” Defending actions by his office and
Gov. Andrew Cuomo to shut schools and freeze regional transportation, de Blasio
said that they were right to
“Prepare for the worst but hope for the best …”The
Comprehensive Guide to Bail-ins: Protecting
Your Savings in the Coming Bail-in Era
MARKET UPDATEToday’s AM fix was USD 1,287, EUR 1,131.93 and GBP 846.71
per ounce.
Yesterday’s AM fix was USD 1,282.75, EUR 1,141.54 and GBP 854.60 per ounce.
Gold gained 1.12%, or $14.30, yesterday, closing at $1,294.70 per ounce.
Silver rose $0.20, or 1.12%, to $18.09/oz.
Gold in US Dollars – 30 Days (Thomson Reuters)
Gold climbed yesterday as a slump in orders for U.S. durable goods
signaled that weaker foreign economies are weighing on the American economy,
boosting demand for gold as a safe
haven.
Demand for all durable goods — items meant to last at least three years
— declined 3.4 percent, the worst performance since August, the Commerce
Department reported. Slowing expansion may prompt the Federal Reserve to hold
off on raising interest rates which is bullish gold gold. Policy makers will
meet this week.
In Singapore,
gold for immediate delivery steadied above $1,290 an ounce. Holding gains
from the previous session, as focus turned to whether a weaker U.S. and
global economy will curb the US Federal Reserve’s claim that they intend
raising interest rates.
Gold in New Delhi rebounded today by Rs 120 to Rs 28,420 per 10 grams,
the Press Trust of India reports. There is a revival in gold buying to
meet ongoing wedding season demand. That has snapped the two-day losing
streak for gold.
Another bullish factor for gold is Greek Prime Minister Alexis Tsipras
promising “radical” change today.
His new government swiftly moved to roll back key parts of Greece’s
international ‘bailout’, prompting a third day of losses on financial
markets.
A swift series of announcements signalled the newly installed
government would not back down from its anti austerity and debt writedown
pledges, setting it on course for a clash with the Troika. The IMF and ECB
have said they will not renegotiate the aid package needed to help Greece pay
its debts.
Even before the first meeting of the new cabinet, new ministers were on
the airwaves reassuring voters they would honour campaign pledges to roll
back the tough economic policies imposed under Greece’s 240 billion-euro bank
bailout programme.
Silver for immediate delivery fell 0.1 percent to $18.11 an ounce.
Platinum was unchanged at $1,263 an ounce while palladium rose 0.5 percent to
$788.75 an ounce.
Get
Breaking News and Updates
