Monthly Archives: September 2014

Signs of the Times – Wars and Rumors of Wars

But China is our Friend…Right?

by Kevin D. Freeman on September 24, 2014

Chinaatwar

It was an interesting week last week. For one thing, Chinese company Alibaba debuted as the largest IPO in the history of the world. Larger than the Initial Public Offerings of Facebook, Twitter, Google, Apple, and Microsoft combined. At the same time, there was a Senate report indicating that China hacked U.S. military contractors in a significant way at least twenty times in the past year. In America, we celebrated the success of Wall Street, earning $300 million or so in underwriter fees. In China, they celebrated finding a path to dethrone American technology dominance (from the official Chinese News Agency):

xinhua-news-agency.xinhualogo

Alibaba’s IPO to end US dominance in technology sector: expert

English.news.cn 2014-09-19

LONDON, Sept. 18 (Xinhua) — Alibaba’s IPO could well be the end of U.S. dominance in the world technology sector, a professor from a Britain’s business school told Xinhua on Thursday.

“Alibaba’s annual growth rate of more than 30 percent shows that the gap between the Chinese companies, Alibaba and Tencent, and U.S. companies is getting ever closer,” said Qing Wang, professor from Warwick Business School, one of the most prestigious and highly selective business schools in the world.

“The ability to understand customers intimately and continuously innovate should enable them to expand overseas with US dominance in the world technology sector gradually being broken,” said professor Wang . . .

To Continue READING….

Americans seemed undisturbed by the nature of the IPO even though the Hong Kong Stock Exchange rejected it because it did not protect shareholders voting rights. And, Americans ignored a number of alarming issues raised by a Congressional agency staff report. From The Wall Street Journal:

wsj_logo3

U.S. Report Casts Doubt on Legal Structure of Alibaba, Other Chinese Firms
Structure Used by Alibaba, Other Chinese Internet Companies Seeking U.S. Investors

A U.S. government commission warned that investors face “major risks” if they buy shares in Chinese companies like e-commerce firm Alibaba Group Holding Ltd.

June 20, 2014

A report released this week by a commission that advises Congress on U.S.-China economic issues took aim at the legal structure underpinning Alibaba as well as a host of other Chinese Internet firms, calling it “a complex and highly risky scheme of legal arrangements.” It warned that the structure could lead to losses by shareholders in the U.S.

“U.S. shareholders face major risks from the complexity and purpose” of the structure, said the report, released on Wednesday by the U.S.-China Economic and Security Review Commission.

To Continue READING….

In essence, American buyers of Alibaba received shares in a Cayman-islands corporation that does not have any real ownership or even control in the Chinese company. They get shares in a scheme that might share profits if 1) the company makes money, 2) the accounting shows the profit, 3) the CEO decides to share the profits, and 4) the Chinese government allows it.

Other issues that should have been raised about the largest IPO in history include wondering “What do they intend to do with the money?” and “Will they protect American consumer data?” The reality is that they intend to use a good deal of this money to acquire other American technology. They also intend to grow their American business and learn as much as they can about American consumers. And, if China was able to pressure Google, we can assume they will outright control Alibaba. They’ve already demonstrated that control over Jack Ma, Alibaba’s charismatic founder. As The Wall Street Journal noted, you don’t become China’s richest man without the Chinese government.

All of these issues were raised at a Press Club event hosted by The Center for Security Policy. I voiced similar concerns in a Fox Business segment as well:

But who cares as long as we are making money? China is our friend, right?

We can believe that if we just ignore the reality that China is preparing for “infowar.” The problem is that they are planning :”infowar” as part of all-out economic warfare capabilities according to Bill Gertz:

Washington_Times-2

Xi urges PLA to wage ‘infowar’

by Bill Gertz, September 10, 2014

Chinese President Xi Jinping is urging the People’s Liberation Army to shift its focus from preparing solely for a future conventional and nuclear conflict to developing “information warfare” capabilities as part of Beijing’s military buildup.

Mr. Xi called for developing advanced military capabilities, including information warfare, as part of what he termed the global revolution in military affairs — a term coined by the Soviet Union’s military and later adopted by the U.S. military for what is now high-technology and intelligence-driven warfare.

The military reforms were discussed during a meeting Aug. 29 of the ruling Communist Party’s Central Committee. In addition to being Chinese president, Mr. Xi is chairman of the Central Military Commission — the ultimate power organ in China that directs all military activities.

“Faced with the severe challenges to our national security and stability and the deep-seated contradictions and problems with reform, it is even more pressing that we greatly liberate our ideas and concepts, have the courage to change our fixed mindsets of mechanized warfare, and establish the ideological concept of information warfare,” Mr. Xi was quoted as saying in state media.

State-run China National Television, the Internet propaganda broadcaster, reported Sept. 2 that “apart from safeguarding the country’s sovereignty and territory, Mr. Xi emphasized strategic interests and the ability to counter non-traditional security threats including economic threats” — an indication China is preparing to wage economic warfare in the future.

China currently holds $1.28 trillion worth of U.S. government bonds, and Chinese military leaders in the past have threatened to use the debt holdings to punish the United States for arms sales to Taiwan.

The directive to build information warfare capabilities follows disclosure in a Pentagon report earlier this year that China is engaged in information warfare. Continue reading

Signs of the Times – The Last Days

Rev. Graham: ‘As I Read the News, I Can’t Help But Wonder if We’re in Last Hours’

September 4, 2014 – 4:48 PM

Rev. Franklin Graham: ‘As I Read the News, I Can’t Help But Wonder if We Are in The Last Hours’

Rev. Franklin Graham, head of the Billy Graham Evangelistic Association. (AP)

(CNSNews.com) – Rev. Franklin Graham, head of the international Christian aid group Samaritan’s Purse and son of world-renowned preacher Billy Graham, said that given all the “bad news” about the killing of Christians by Muslims in some countries, and attacks on Christians by the media and the government even in America, he cannot “help but wonder if we are in the last hours before our Lord Jesus Christ returns.”

“As I read the news, I can’t help but wonder if we are in the last hours before our Lord Jesus Christ returns to rescue His church and God pours out His wrath on the world for the rejection of His Son,” said Rev. Graham in a post on the Billy Graham Evangelistic Association (BGEA) website. Continue reading

Signs of the Times – Wars and Rumors of Wars – Economic Warfare

Surprise, Surprise; American Banks Hacked Following Sanctions

by Kevin D. Freeman on August 28, 2014

EBB42ED9-BA28-4676-99DF-6675D796DEAC_mw1024_s_n

We’ve been consistent since the summer of 2008 in private conversations, 2009 with reports to the government, 2011 in this blog, 2012 with the NY Times bestseller Secret Weapon and 2014 with Game PlanWe’ve told you that this is a global economic war. We pointed out Russian warnings that they could crash the American financial system in retaliation for any sanctions we would impose. We explained that this was a long-term Putin-led strategy to dethrone American economic leadership and remove the dollar from Global Reserve Currency status. We warned that the 2011 NASDAQ hack was just the beginning of things to come. Our stock market and entire financial system have been targetedAnd, not just by Russia.

So, why is anyone surprised to learn that the American banking system was stealthily attacked?

Here’s what we know so far:

1. At least five major banks including JP Morgan Chase were hacked.

2. The hack was extremely sophisticated indicating nation-state involvement whether directly or indirectly.  It was described as Stuxnet-like.   That is far beyond the amateur hacker’s capability. [Of course, it could be an independent group operating with state-level resources and approval.]

3. The prime suspect is Russia. 

4. It appears that the attack might have been to show capability as a “warning shot” across the bow. Even the best-managed systems by the biggest companies appear vulnerable. The attack proved that even the core infrastructure could be breached. 

5. We are behind the curve in addressing these threats. In fact, banks weren’t scheduled to meet with the Treasury on cyber threats until next month.

6. It is VERY serious. Even before the attack was acknowledged, “Treasury Secretary Jack Lew gave a speech focused on the topic at a Wall Street investor conference in July. ‘These incidents represent a direct threat to our economic and national security, perpetrated by state and non-state actors around the world, with growing intensity and increasing sophistication,’ Lew said.” That was BEFORE the latest revelation.

Don’t forget what General Keith Alexander said to 60 Minutes late last year:

forbes_logo_small

 

Robert Lenzner, Forbes Staff 12/15/2013 @ 9:00PM |4,402 views

Some Foreign Nations Have The Cyberwar Capability To Destroy Our Financial System, NSA Admits

On the CBS program 60 Minutes tonight, National Security Agency (NSA) director Gen. Keith Alexander admitted that “a foreign national could impact and destroy a major portion of our financial system . . . and literally take down the U.S. economy.”

…(Deborah) Plunkett (another NSA official spokesperson) told CBS: “Don’t be fooled. There are absolutely nation states who have the capability and the intention to do just that,” ie “literally take down the U.S. economy.”

This is just further evidence of what we have been saying all along:

We are in a global economic war right now. And, we appear less prepared to face it than we were prepared in November 1941 to face the second world war. Unfortunately, Pearl Harbor is coming.