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How a 1% Gain Can Destroy Your Retirement Dreams

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Sep 10, 2013 - 01:47 PM GMT

By: Money_Morning

Robert Hsu writes: This has been the bond market's worst showing in 19 years, thanks to the recent spike in the 10-year Treasury yield. But bond investors aren't the only ones getting hit.

A higher "risk-free" rate affects you, too. And me. And anyone else trying to grow their money.

It's time to make an adjustment.

A big one.

So let's look at three new "dead money" investments, and one that's "living large" - a company that can give you what few others still provide: a steady double-digit annual return, year after year.

But we'll start with the shift itself, because this seemingly benign 1% move has triggered what could be the single greatest risk to your retirement dreams...

Like 1994, But (Much) More Devastating

The yield on the 10-year Treasury note is just under 3%, and though that doesn't seem like a very destructive number, it is the highest rate on this benchmark interest rate metric since July 2011. More important, however, is the tremendous rate of change in the 10-year yield over the past four months, and it demonstrates how a 1% "spike" in interest rates can have a devastating effect on your retirement plans.

On May 10, the yield on the 10-year was 1.90%. Nearly four months later that same yield was 2.90%. This 1% headline move in the yield actually represents a 52.5% spike in the metric, an extreme rate of change that has sent bond prices tumbling, and with it the value of millions of retirement accounts holding Treasury bonds.

Indeed, the move higher in the 10-year yield has wreaked havoc on traditional income investments, because as bond yields rise, bond prices fall. This inverse relationship between yields and bond prices is the main reason why the bond market is having its worst year since the notoriously destructive 1994.

This time around, the spike higher in bond yields and concomitant drop in bond values could have an even more detrimental overall effect, and that's because there are many more investors that are either in retirement or nearing retirement, which means there are more traditional fixed-income investors today than there were 20 years ago.

Unfortunately, the Wall Street marketing machine has sold retirees on the idea that Treasury bonds are "low-risk" assets, but as we've seen this year, these bonds offer little or even negative returns in exchange for this so-called "low risk."

For example, one of the most widely held bond funds right now is the iShares Barclays 20+ Year Treasury Bond (TLT), which yields approximately 2.90%. In exchange for that yield, you've been dealt about a 15% loss in the price of that fund since May. Another widely held bond fund is the iShares iBoxx $ Investment Grade Corp. Bond (LQD). This fund offers investors a yield of 3.9%, but since May the share price has plummeted more than 8.5%.

As you can see, these so-called "low-risk" bond funds are anything but low risk.

Unfortunately, the idea promulgated by the big brokerage houses and sold to unsuspecting income seekers has caused many trusting investors to pile into the same "safe" investments. And as we've seen this year, when a trend reverses and catches so many investors off guard, the risk of a big panic selloff is exacerbated.

Think of this phenomenon as akin to shouting "Fire!" in a crowded theater. When the stampede for the exits ensues, people tend to get hurt badly.

So, what can you do to make sure you don't get trapped in a wealth-destroying mass exodus?

Invest in the "New Income"

The latest "1% move" in the 10-year yield is, in my opinion, the first of many such moves. In fact, we could see the yield on the 10-year rise to 5% or even 6% over the next several years, back to the level where this metric was before the global financial crisis hit.

If I am right about this, it means that the value of traditional income investments will continue to decline for years to come. It also means that if you want to capture the income you need to fuel your retirement, you have to start looking at your money with a growth-oriented eye. (You'll see what I mean.)

You'll also benefit from more sophisticated income-generating strategies involving options and unconventional income-producing assets, such as energy transport partnerships and other growth-oriented assets - if, that is, you want to keep your money from getting destroyed by rising interest rates.

Source :http://moneymorning.com/2013/09/10/how-a-1-gain-can-destroy-your-retirement-dreams-part-one/

Poland Confiscates Private Pensions – Yours Are Next

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Sep 11, 2013 - 01:26 PM GMT

By: Jeff_Berwick

We have been saying for the last four years that as Europe, the US and other Western and global nation-states continue their debt-fueled collapse the governments of these countries will continue to consider their citizens' wealth to be their own and seize more of their assets.

We have, unfortunately, been vindicated already numerous times.

  • In March, 2009, Ireland seized €4bn from its Pension Reserve fund in order to rescue its banks. In November 2010, the remaining savings of €2.5bn was seized to support the bailout of the rest of the country.
  • In December, 2010, Hungary told its citizens that they could either remit their private pension money to the state or lose their state pension funds (but still have to pay for it nonetheless)
  • In November, 2010, the French parliament decided to earmark €33bn from the national reserve pension fund FRR to reduce the short-term pension scheme deficit.
  • In early January 2011, $60 million in private retirement funds were transferred to the state's pension scheme in Bulgaria.  They wanted to transfer $300 million, but were denied on their first attempt

And, of course, this spring, Cyprus took it a step further and outright confiscated up to 50% of the funds from bank account holders in that country.

Last week the Polish government announced it would transfer to the state (aka. confiscate) the bulk of assets owned by the country's private pension funds (many of them owned by such foreign firms as PIMCO parent Allianz, AXA, Generali, ING and Aviva), without offering any compensation.

BUT IT CAN'T HAPPEN HERE

Think again if you don't think this will occur all across the Western world until The End Of The Monetary System As We Know It (TEOTMSAWKI).

To begin, the Social Security (or as I call it, the Socialist Insecurity) program in the US is, by dictionary definition, a ponzi scheme.

According to Investopedia: "The Ponzi scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors. These schemes usually collapse on themselves when the new investments stop."

In fact, Social Security is even worse than a ponzi scheme.  At least with a ponzi scheme you have the choice whether or not to "invest" with someone like Robert Madoff.  You aren't forced into it.

Plus, completely fraudulently, the US government shows all Social Security (SS) incoming funds as actual revenue and then immediately spends the money and gives an IOU (unpayable, bankrupt US Treasuries) in return to the SS system.  Let me repeat that: they immediately spend the money and deposit an IOU into what is already a Ponzi scheme. And in past years Congress has held committees to consider nationalizing private pension funds, just as Poland did last week (and held committees on doing it in 2010).

What was the main reason that all these governments such as Ireland, Hungary, France, Bulgaria and Poland began stealing with their citizen's private wealth?  It was because their governments were too indebted vis-a-vis their economy and in order to continue operating (and borrowing) they reached out and just took their own citizens' retirement savings and, in almost every case, mandated that the only assets they can hold is government debt (which will collapse or pay 0-3% at a time when inflation often is running over 10%, meaning a net loss of 4-6%+ per year).

So, let's take a look at the debt-to-GDP of all these countries and a few other Western countries.

As you can see, with the exclusion of France, all the other countries who have outright stolen private pension funds are all in less debt than the Western countries (or those who have bought into Western-style Keynesian central banking democracies like Japan) who have yet to do so.

Why?  It's mostly because the larger Western countries have yet to lose the confidence of the market.  While the smaller countries with tinier economies and less ability to float their currencies as reserve currencies get the attention of the market first.

But, this is very rapidly changing.  Here is the interest rate change of US government debt in the last few months (yearly chart).

The interest rate has nearly doubled in the last four months.  This will have massive repurcussions in all markets... and it will also mean that as interest rates rise the US government will look more and more insolvent by the day.  With $17 trillion in current debt (not GAAP adjusted - GAAP adjusted is over $85 trillion) an interest rate of 10% will mean $1.7 trillion in interest payments alone.  The total tax (theft) revenue base of the US was only $2.4 trillion in 2012.  If interest rates were to rise to 10%, that would mean over 70% of the taxation revenue of the US government would go to paying interest alone.

But, remember, $841 billion of that "revenue" was payments into the Social Security scheme.  No company on Earth would include payments into an employee pension plan as income.  So, the more realistic revenue of the US government was $2.4 trillion minus $841 billion in 2012... or approximately $1.55 billion.  In other words, an interest rate nearing 10% would mean that every semi-legitimate cent of tax revenue for the US government, and more, would go to interest payments on the debt alone.

And so expect the US government and most if not all Western governments to do what has happened in places like Hungary, France, Cyprus, Poland and more... attempt to stay alive a little while longer by taking the assets of their citizens.  And tax-sheltered retirements will be the easiest pickings.

HOW TO PROTECT YOURSELF

Since retirement/pension savings will be the easiest target, immediately divest yourself of as much of those assets as possible -- while they are still assets -- and internationalize them.  Get as much outside of the country with the government that purports to own you and your assets as possible.  I did that in 2008 in Canada and have never regretted it.

If you are not willing or able to cash in retirement/pension savings, look to alternative options.  In the US, for example, you can easily convert your IRA into a self-directed IRA for a few thousand dollars and then you are able to invest in almost any asset worldwide.  You can buy racehorses in Dubai, gold in Switzerland or real estate in Galt's Gulch Chile, just as example.  For advice/info or to turn your current IRA into a self-directed IRA, contactTDVSelfDirectedIRA.com.

A self-directed IRA makes sense for anyone with IRA assets over $20,000.  Below that level it becomes debatable in terms of the cost/benefit ratio.

For those with assets inside or outside (total assets) of an IRA of more than $1 million you should contact TDV Wealth Management for an initial consultation about your options.

And, of course, you can always subscribe to The Dollar Vigilante for the latest news, information and actionable intelligence on surviving the coming dollar (and all other fiat currency) collapse.

Because this collapse is going to be messy.

http://www.marketoracle.co.uk/Article42218.html

The new model of synthesis

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The security scandal, financial crisis, and other world events are changing the way users engage the internet and changing the way we do business.  Global Intel Hub proposes a new model based on synthesis which incorporate your internet activity (workflow), security, privacy, and filter out spam and other unwanted distractions and risks.

Structured Consulting will require any new participant first join the Intel Hub.  Why?  First, any new client should have access to our years worth of research and information.  Many questions will be answered on globalintelhub.com and many tools can solve existing problems without going any further.  For example our partner company Vector Informatics has developed internet marketing (SEO) tools that we provide free with membership.  Also Elite Forex Training has contributed educational courses about Forex trading and international markets.  Based on the old model, users would purchase such tools individually.

Second, by first accessing the hub, members enjoy secure private communications.  This includes secure chat, file exchange (encrypted file storage), and online conferencing.

Netflix charges about $10/month to access their limited database of movies.  Napster charges similar to access music.  Linked in charges for premium subscriptions.  But each are niche content providers.  Intel hub provides content (research & intelligence) as well but much more - we are building a private internet based on this new model, and eventually a financial institution.

The advertising model is out of control.  Websites are so littered with ads which are usually inappropriate that sometimes viewing can be difficult or even impossible.  The old model was to offer free content and charge for ads, this model taken from newspapers who would charge a small fee for the paper, but make most of their money on ads.

Some of these concepts are not unique, but so far no one is offering synthesis.  With the intel hub we are building a one stop portal, your gateway to working online, whether it be for business, protecting your assets, or reading the news.

The concept of sharing is also not unique.  Instead of using free services like Google, a group of users can get together and chip in for their own server.  Before proliferation of internet, gamers were known to have "LAN parties" where a group of 10-30 enthusiasts would come together for a few hours to play games, exchange files, install software, and work together.   But there again, they are filling the need of a specific niche.

globalintelhub.com is simply the information portal, the basis for development of the new model, which will include user participation.  Users with needs, agendas, and talents will evolve the synthesis model.  This is a key difference between the top-down approach taken by internet sites, where they control what you can and can't do, and charge a fee.  The future of the internet, if it is to succeed, must be based on an open-source model, based on dynamic synthesis.  The world is changing rapidly, why shouldn't our modus operandi change as well?

 

NSA’s Greatest Weapon In Surveillance? Outright Ignorance In Tech Consumers

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Submitted by Reggie Middleton on 09/09/2013 13:35 -0400

Should MSFT split up

Should MSFT split up

After reading an interesting article in the New Scientist, How NSA weakens encryption to access internet traffic, I was brought to mind a piece that I wrote to address the single most powerful tool in the NSA's arsenal - the blatant ignorance of the common tech enduser. I wrote intensely on this topic in What Angela Merkel Could Learn From Me and Using Glass To Spy On The Spies, to wit:

"...you can see how and why Android is safer to the populace than all of the popular competition. Windows and iOS all have the same problems, except for the facts that

  • You dont have access to the code
  • You don't have the ability to submit changes to even be considered for acceptance
  • With Android, you don't need for Google to accept your personal changes, you can simply roll your own personal version and use it for yourself which should be the preference for the paranoid types. You can't do this with any other popular OS.
  • The amound of independent eyes on Android trumps that of any other OS, by far. If something has a chance of getting caught (ex. spy code) it will likely get caught on Android code base. This has already happened, read XDA developers code posts for the HTC Evo"

 

 

On that note, quoting the piece from the New Scientist, How NSA weakens encryption to access internet traffic:

The Snowden files say the NSA spends $250 million a year on covertly influencing the product designs of technology companies, suggesting inserting such vulnerabilities is a high priority for the agency.

It could also be swiping keys directly from online service providers, says Kuhn. The TLS encryption protocol, which puts the "s" in secure https connections, relies on servers storing a secret key to decrypt incoming messages or transactions. The NSA could bribe a system administrator or otherwise infiltrate the organisation to gain access to these keys, allowing it to decrypt any intercepted traffic to the relevant server.

To avoid the NSA's gaze, Kuhn says people should turn to open-source software, where many people evaluate the underlying code and can identify any attempts to weaken it. "There is going to be a lot of pressure on IT decision-makers to justify why they gambled the security of their infrastructure on some close-sourced offering that is very likely infiltrated by NSA programmes."

There's also the news pieces stating that the NSA can access the personal information on popular handsets, including Blackberry, iOS and Android handsets. The NSA apparently had problems with the Blackberry devices, for about a year. Then again, knowing that Blackberry simply handed the keys over to the Indian government, I wouldn't have felt very secure, even for that year.

There are many reasons to avoid closed systems, with security and government systems being just two. There's also downright, market based innovation, as illustrated in this CNBC clip from Thursday...

Here's an example of the innovation that I use for privacy and control - CyanogenMod introduces system level encryption for messaging. The ability to have code scoured, cleaned, and fixed by tens of thousands of others will beat the efforts of any single company - any time of the day. If you really care about your privacy, you should think twice about iOS, Blackberry and Windows.

NSA’s (and GCHQ) Decryption Capabilities: Truth and Lies

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Edward Snowden has revealed new information concerning the cryptographic capabilities of the NSA and GCHQ (TheGuardian, ProRepublica, leaking documents…). The CryptoGirl was bound to look into that topic 😉 Let’s go straight to the point and answer simple questions.

Is cryptography unsecure?

No, I don’t think so. Basically, cryptography is maths (prime numbers, finite fields, polynomials…), and maths are solid science with proofs and demonstrations. Cryptographic algorithms are only seldom broken (e.g MD5). What’s quite often “broken” are implementations, because implementations are imperfect representation of maths. Vulnerabilities range from implementations bugs (buffer overflows etc) to side channel attacks (i.e attacks based on the physical properties of the implementation such as differential power analysis, timing attacks…). Don’t believe me? This opinion of mine is backed by Bruce Schneier, who had access to NSA’s documents: ”They’re doing it primarily by cheating, not by mathematics.”.

Yes, but they seem to be able to defeat SSL!

Yes. Note that SSL is a security protocol, not a cryptographic algorithm.

The documents released by Snowden confirms our fears regarding SSL. As we said in our previous blog, we believe they do it by getting private keys of given domains or performing man-in-the-middle attacks. They could also be using attacks such as BEAST, CRIME) or BREACH.

SSL is so widely deployed that there is much peer review of the protocol (good), but also new vulnerabilities are exposed each year at security conferences. It seems quite likely that the NSA is aware of those vulnerabilities, perhaps even with a few 0-days. enigma crypto rotor

Image courtesy of LaMenta3 via Flickr.

Matthew Green says Microsoft CryptoAPI and OpenSSL are probably among the SSL libraries the NSA is the most likely to break into, and I agree with him. In particular, a few years ago I remember that OpenSSL checked certificate chains only up to 9 levels. Certificates for a given entity are issued by a higher authority, and the higher authority’s certificate is issued by an even higher authority. That’s the chain of trust. So, if you have 10 certificates in your chain, OpenSSL was unable to check the chain and you might claim to be God and would be trusted 🙂 This was a documented issue, I haven’t checked if it has been fixed since.

 

By the way, Bruce Schneier recommends usage of TLS (for those who don’t know, TLS is like “SSL 3.1”, it’s a newer version of SSL). It’s certainly better than SSL in terms of security, but I wouldn’t bet on it as there are (nearly) as many vulnerabilities.

The NSA has supercomputers and excellent cryptographers. They can break the RSA algorithm

I agree with the first sentence and disagree with the second 😉 Sure, they have powerful computers and cryptographers, but that’s not enough to break the RSA algorithm with 2048-bit keys (for instance, this is used in GPG). You need huge computational power to brute force RSA 2048. Currently, the RSA Factoring Challenge record is set to RSA 768, and that’s already tremendous work.

I don’t think the NSA can do much better, and I don’t think they have better cryptographers than those of the entire world. People like Shamir, Rivest, Lenstra, Preneel, Coron, Boneh etc are just exceptional, and I would not think the NSA can influence such a diverse panel of scientists.

In the specific case of RSA, however, note that improper usage or implementations may be insecure. For instance, signing with RSA 1024 with PKCS#1 and a low exponent is not safe. So, if you use your crypto library (OpenSSL, BouncyCastle etc) with those settings, too bad. Note that it’s not that RSA 1024 is insecure, but that particular combination. All cryptographic algorithms are designed to work in a specific well-designed context. If you use them outside that context, their security may fall apart. As developers say, RTFM 😉

The slides say they can do it!

No. The information I read in the Guardian’s article in no way states the NSA has the ability to break RSA, nor AES etc. They say that “cryptanalytic capabilities are now coming on line” or that they have “groundbreaking capabilities”, which is far too vague.

True, I haven’t had access to the full set of slides, so I might be missing something important. However, still, I would not trust those slides fully. Why? Because they don’t sound like technical slides from a cryptographer. Would a cryptographer write he has “groundbreaking capabilities”? No. That’s not the way cryptographers talk. They’d rather say “Breakable in o(2^n)” or something like that 😉 For me, the slides emanate from some high level manager. I guess all of us have already seen slides of products which actually do not really correspond to reality, huh?

The NSA influences standards and puts backdoors in applications

Yes, I believe this is possible. Matthew Green summarized it very well: “Cryptographers have always had complicated feelings about NIST, and that’s mostly because NIST has a complicated relationship with the NSA.”

I however wonder exactly which 2006 standard the Guardian refers to.

My guess would be that the same applies to (some) RFCs and IEEE standards such as P1363. Elliptic curve choices are indeed somewhat obscure and could typically have been influenced by the NSA. This is also in line with Bruce Schneier’s recommendation “Prefer conventional discrete-log-based systems over elliptic-curve systems; the latter have constants that the NSA influences when they can.”

As for putting backdoors into programs, to some extent, I can personally guarantee this is true - and not only in the US! Some 15 years ago (waow…), I was a junior developer working on quite well-known encryption product. To comply with the French law and be able to commercialize the product, we had absolutely no other choice than to embed a backdoor for the French government. That backdoor enabled them to decrypt the session key and hence any document encrypted with the tool. I remember the product featured a label like “Approved by SCSSI” (French’s former SSI entity) which, in practice, meant it held the backdoor. In France, laws around cryptography are now less restrictive, but this is just to say I would not be surprised the US asks for key escrows.

What tools can I use?

Bruce Schneier provides several recommendations. See also this document. It’s also worth to have a look at Prism-break. I complement them with a table below of what I think - personal opinion - is secure or not. Unfortunately, “green” does not mean it is guaranteed to be secure. For instance, the implementation may be flawed. But it’s better than orange…

secureornot

– the Crypto Girl

- See more at:  http://blog.fortinet.com/NSA-s--and-GCHQ--Decryption-Capabilities--Truth-and-Lies/#sthash.Cm5TuXXW.dpuf

NSA Revelations Cast Doubt on the Entire Tech Industry

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Six years ago, two Microsoft cryptography researchers discovered some weirdness in an obscure cryptography standard authored by the National Security Agency. There was a bug in a government-standard random number generator that could be used to encrypt data.

The researchers, Dan Shumow and Niels Ferguson, found that the number generator appeared to have been built with a backdoor — it came with a secret numeric key that could allow a third party to decrypt code that it helped generate.

According to Thursday’s reports by the ProPublica, the Guardian, and The New York Times, classified documents leaked by NSA whistleblower Edward Snowden appear to confirm what everyone suspected: that the backdoor was engineered by the NSA. Worse still, a top-secret NSA document published with the reports says that the NSA has worked with industry partners to “covertly influence” technology products.

That sounds bad, but so far, there’s not much hard evidence about what exactly has been compromised. No company is named in the new allegations. The details of the reported modifications are murky. So while much of the internet’s security systems appear to be broken, it’s unclear where the problems lie.

The result is that the trustworthiness of the systems we used to communicate on the internet is in doubt. “I think all companies have a little bit of taint after this,” says Christopher Soghoian, a technologist with the American Civil Liberties Union.

The latest documents show that the NSA has vast crypto-cracking resources, a database of secretly held encryption keys used to decrypt private communications, and an ability to crack cryptography in certain VPN encryption chips. Its goal: to crack in a widespread way the internet’s security tools and protocols.

David Dampier, the director of the Center for Computer Security Research at Mississippi State University, says it’s “wrong” for companies to add backdoors. But he added that the latest revelations of the government’s alleged decryption capabilities aren’t surprising.

“I think that no encryption created by anyone is going to protect you from everyone. The stronger the encryption the harder they are going to work to decrypt it,” he said. “I don’t care what company is selling you encryption software. Whatever they are going to sell you, it can be decrypted. There’s nothing that is infallible.”

The reports talk about the NSA’s attempts to exploit software bugs, break codes and accumulate encryption keys — this is all stuff that most security experts expected the surveillance agency to be doing. But here’s the most unsettling part: A leaked excerpt from the agency’s 2013 budget requesttalks about the NSA working with “US and foreign IT industries to covertly influence and/or overtly leverage their commercial products designs.” The document explicitly says: “These design changes make the systems in question exploitable.”

Daniel Castro, a senior analyst with the Information Technology and Innovation Foundation, calls the latest leaks disturbing. “We went through this debate with the Clipper Chip, and it was clear where public opinion stood,” he says, referring to a backdoor technology the NSA wanted to install in all encryption two decades ago.

“If these claims are true, and the NSA introduced backdoors into global security standards, this seems like a clear perversion of democracy,” Castro added. “This just further erodes the competitiveness of U.S. tech companies. In particular, I think this enlarges the scope of companies that will suffer backlash since cryptographic standards are often embedded in hardware.”

Castro wrote a report last month predicting that Snowden’s PRISM revelations could cost the U.S. cloud-computing industry as much as $35 billion over the next three years as companies shied away from U.S. internet service providers, which are said to be providing government access to their servers.

You’ll hear much the same from Dave Jevans, the founder of Marble Security, an enterprise mobile security provider and the former chief executive of IronKey, He says that it “would be extremely bad” for a tech company to give the government a backdoor.

“It may not be the death knell,” he added, referring to Crypto AG, a Swiss encryption companies alleged to have rigged their machines for the NSA in the 1990s. ”They’re still around, but barely.”

But not everyone thinks that U.S. competitiveness will be hit. The documents talk about the NSA working with foreign companies too. “I don’t think there’s going to be any direct major impact because there aren’t any other countries that are cherubs in all this either,” says Paul Kocher, president of Cryptography Research.

The number generator found in 2007 — called Dual_EC_RNG — was hardly a technical triumph. It was clumsy and slow and never widely used, but it is supported in Microsoft’s Windows operating system.

Microsoft has said in the past that it does not provide the government with “direct and unfettered” access to customer data, and it says much the same today. “We have significant concerns about the allegations of government activity reported yesterday and will be pressing the government for an explanation,” the company said Friday.

But the doubt is still there. And that’s the problem.

http://www.wired.com/threatlevel/2013/09/tech-industry-tainted/

When the Lights Go Out On November 13, 2013

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(DaveHodges) – There are very dark storm clouds gathering around the country and North America as a whole. Things are about to get dark, very dark in just a few short weeks. In just over two months, on November 13-14, 2013, the lights are about to go out. Will the lights come back on? It depends on who you ask. Given the past behavior of those in power, it would behoove all of us to prepare for the fact that we could be living for an extended time with no electricity.

November’s North American Power Grid Takedown Drill

Within most false flag events lies a terror drill which substantively ties together the drill with the terrorist event. The 9/11 attacks and the 7/7 bombings serve as prime examples of hiding a false flag event within a terror drill. This strategy has worked very well before and on so many occasions that it would be naive to not expect this scenario to be played out again when the time is right and the anticipated maximum benefit can be realized from the event.

Along these lines of a coming false flag terror event, the New York Times is currently reporting that “thousands of utility workers, business executives, National Guard officers, F.B.I. anti-terrorism experts and officials from government agencies in the United States, Canada and Mexico are preparing for an emergency drill in November that will simulate physical attack and cyber attacks that could take down large sections of the power grid.” To date, 150 businesses have volunteered to participate in the drill. This is a scheduled two-day drill commencing on November 13th.

The Past Is the Best Predictor of the Future

With the possibility that the upcoming terror drill will turn into a false flag event, it would be in everyone’s best interest to examine this event more closely and to prepare accordingly.

This government has recently left a trail of catastrophic doomsday scenarios a mile wide, the most severe of which speaks to an EMP attack. Many of whom are aware of the coming drill, fear an EMP attack which will permanently disable the grid as TV viewers have seen in the popular TV show, Revolution. Personally, I do not expect to see an all-encompassing EMP attack because so many of the police state surveillance grid assets would be impacted (e.g. surveillance cameras, NSA spy grid capabilities, etc.) and so many resources have been used in its development. Yet, given the unlikely event of an EMP attack, it seems that nearly everyone from former DHS director, Janet Napolitano to former CIA director, James Woolsey have discussed the possibility of a grid takedown through an EMP attack. Further, the Nuclear Energy Regulatory Commission in their, NERC PowerPoint presentation, stated that one of the possible outcomes of an attack will be a “prolonged blackout…”

Although I do not believe that an EMP attack is in our immediate future, it is likely that a false flag terror attack on our power grid, set to coincide with the November North American blackout drill, will take place.

The working scenario that has emerged is that World War III is on the horizon. Syria was to be the flash point. However, with American and international sentiment running so high against American involvement in the Syrian conflict, Obama needs a Plan B in order to get America into war, because it does not appear that Congress is going to give him the authorization that he needs to force our way in Syria culminating in a military stand-off between the Russians and the Chinese and the United States. Subsequently, if Obama fails to obtain Congressional support to attack Syria, he could very well turn his attention to the takedown of the power grid and he could still achieve his goals in under two months.

If and when the power grid is compromised, this would plunge North America into an abyss of darkness. Some people will undoubtedly anticipate “three days of darkness” which will lead to a roll-out of draconian martial law. Certainly, some of the recent government preparations speak to this possibility with FEMA stockpiling massive amounts of food and the acquisition of 2.6 billion rounds of ammunition by DHS. And with the roll-out of martial law, the will of the people and of Congress would no longer matter and Obama would be free to prosecute any conflict he would deem necessary. Personally, this would be an attractive option for Obama because he might very well be setting himself up to be King for life.

The Constitutional Kill Switch

I would then expect that the takedown of the grid, no matter how temporary, could lead to the imposition of total Federal tyranny and the implementation of the Constitutional kill switch, otherwise known as, Executive Order 13603, in which the government would control every resource in the country including the involuntary conscription of any person for any purpose which would be overseen by the Secretary of Labor. All food and water would be subject to Federal control, whether this would be your family garden, your food stockpiles…anything… anybody is subject to confiscation by FEMA and DHS under Executive Order 13603 which is martial law on steroids.This would give those in charge total control over the vast resources of this country.

First, there are some very serious implications which could result from a grid shutdown, but the cost-benefit analysis favoring the elite going through with this plot.

Just as the CIA backed al-Qaeda needed a game-changing even to bring in the US military to break the Syrian stalemate by staging a false flag chemical weapons attack, the globalists need a game-changing event in America. Taking down the grid is a move in that direction, and what better way to accomplish this goal than an embedded event within a terrorist drill.

Bankster Benefits to a Grid Shutdown

There are some tangible benefits to the banksters perpetrating a grid shutdown. In the aftermath of a grid shut down, a shut down that might only last a few days, the Internet would go down and the banksters could restore the Internet at some point with Chinese types of censorship controls which would effectively silence the truth movement. McCain at one time wanted offensive bloggers fined $300,000. Senator Jay Rockefeller stated that he wished the Internet had never been invented. Both men may soon get their way.

A power grid shut down would also allow for the full implementation of a North Korea type of police state apparatus under the guise of keeping order. The NSA would provide the intelligence and DHS would provide enforcement. And I think the beleaguered citizens of the United States would soon discover why FEMA signed the bilateral agreement which allows Russian troops on our soil. Certainly, if the Russians are used to supplement martial law, we could conclude that all the drama over Syria may be very well-orchestrated theater and that Russian and the United States are on the same side and are serving the same “Gnomes of Zurich” banksters. Yes, war could still happen between the two super powers, but it would be a contrived war, not a spontaneous event.

An additional benefit to conducting this drill is that it will allow the banksters to test their ability to shut down power to selected communities and/or regions. This would be a useful tool in combating the insurrection that surely will follow the tyranny of what is coming.

In a grid shutdown, the above developments are likely given the cast of players who are making the grand decisions impacting this country. However, a perpetual state of martial law, extreme Internet control and insurrection suppression through denial of power do not represent the final goals in this latest plot against our citizens.

Conclusion

It is completely understandable as to why some people are viewing this terror drill with extreme suspicion. Sometimes, when journalists cover events, they get a feeling for what lies ahead without fully knowing all the facts. I, too, like so many of my colleagues have that sick feeling in the pit of my stomach which is screaming at me that this terror drill will produce some very ominous spin-off complications. And as bad as the November 13th terror drill may be, I strongly fear that this event will have a second possibility which contains some very dire consequences in which the resulting effects will be much more devastating than just suffering through a prolonged blackout.

There is a strong possibility that there could be a false flag attack embedded within the false flag attack coming upon our grid and I will address that possibility in the next article in this series.

Dave is an award winning psychology, statistics and research professor, a college basketball coach, a mental health counselor, a political activist and writer who has published dozens of editorials and articles in several publications such as Freedoms Phoenix, News With Views and The Arizona Republic.

The Common Sense Show features a wide variety of important topics that range from the loss of constitutional liberties, to the subsequent implementation of a police state under world governance, to exploring the limits of human potential. The primary purpose of The Common Sense Show is to provide Americans with the tools necessary to reclaim both our individual and national sovereignty.

NSA Has Full “Back Door” Access To iPhone, BlackBerry And Android Smartphones, Documents Reveal

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Two months ago, when we reported that the NSA has successfully inserted illegal access protocols into the Android OS, thus granting it back door access into nearly three quarters of all cell phones, the news was met with skepticism and resistance: how could an open-sourced architecture be so frail and open to penetration was the most common complaint. We wonder if today's news, broken by Germany's Spiegel, according to which the NSA can spy not only on Android smartphones but tap user data on all iPhone and BlackBerry devices "including contact lists, SMS traffic, notes and location information about where a user has been", will be met with the same skepticism or if the realization that every form of privacy is now gone, has finally dawned on the population. Spiegel reports, citing"internal NSA documents that the NSA has the capability of tapping user data from the iPhone, devices using Android as well as BlackBerry, a system previously believed to be highly secure. The documents also indicate that the NSA has set upspecific working groups to deal with each operating system, with the goal of gaining secret access to the data held on the phones." While at this point it should come as no surprise that the NSA pervasively spies on Americans without a warrant or clearance, and has access to every device permitting electronic communication, the bigger question is: if everything is being spied on, what is left? Is carrierpigeons.com about to IPO?

From Spiegel:

The United States' National Security Agency intelligence-gathering operation is capable of accessing user data from smart phones from all leading manufacturers. Top secret NSA documents that SPIEGEL has seen explicitly note that the NSA can tap into such information on Apple iPhones, BlackBerry devices and Google's Android mobile operating system.

 

The documents state that it is possible for the NSA to tap most sensitive data held on these smart phones,including contact lists, SMS traffic, notes and location information about where a user has been.

 

In the internal documents, experts boast about successful access to iPhone data in instances where the NSA is able to infiltrate the computer a person uses to sync their iPhone. Mini-programs, so-called "scripts," then enable additional access to at least 38 iPhone features.

 

The documents suggest the intelligence specialists have also had similar success in hacking into BlackBerrys. A 2009 NSA document states that it can "see and read SMS traffic."

 

It also notes there was a period in 2009 when the NSA was temporarily unable to access BlackBerry devices. After the Canadian company acquired another firm the same year, it changed the way in compresses its data. But in March 2010, the department responsible at Britain's GCHQ intelligence agency declared in a top secret document it had regained access to BlackBerry data and celebrated with the word, "champagne!"

 

The documents also state that the NSA has succeeded in accessing the BlackBerry mail system, which is known to be very secure. This could mark a huge setback for the company, which has always claimed that its mail system is uncrackable.

 

In response to questions from SPIEGEL, BlackBerry officials stated, "It is not for us to comment on media reports regarding alleged government surveillance of telecommunications traffic." The company said it had not programmed a "'back door' pipeline to our platform."

Of course not, it just allowed the NSA to program one. And while the biggest scandal of the Obama administration continues to get ever bigger, and makes Nixon look like an amateur, what is the response? Why a media that aside for a few outlets remains mute... and diversion from the administration of course, in the form of war and hundreds of thousands about to die just to keep the president in his seat.

Finally, while two months ago we joked when we presented the following two graphics, now we are no longer so sure it is a joke:

From this:

To this: 

UK censorwall bans VPNs

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UK mobile providers, including O2 and its reseller GiffGaff, areblocking commercial VPN providers that help to secure sensitive communications from criminals, hackers and government spies. In particular, O2/GiffGaff block IPREDator, my favorite VPN service. The carriers claim that because these services could be use to bypass their Internet censorship tools -- switched on by default, a regime that is coming soon to hardline Internet connections, thanks to demands from Prime Minister David Cameron -- they, too, must be blocked.

The only way to stop Internet users from accessing "bad" websites is to spy on all their Internet traffic (you have to look at all their traffic in order to interdict the forbidden sites). So it follows that any censorship system must also ban any privacy/security tools. The UK is raising a generation of Internet users who are told that "security" requires them to make their sensitive, personal information available to anyone who is listening in on the network, because otherwise they might see sexually explicit material. Instead of teaching kids how to stay safe online, the official UK Internet safety policy requires them to be totally naked in all their online communications.

Adults are allowed to opt out of the filter -- though some carriers make this hard, requiring them to present themselves in person with their passports in hand -- but that's beside the point. Having been told that the filter blocks "adult" content (though it fails miserably at this, by any definition of "adult"), how many parents will be willing to say, "No, I don't want this filter on my kids' phones?"

TorrentFreak has learned that VPN provider iPredator is already blocked under the “adult filter” of some, if not all, mobile providers. TorrentFreak has seen communication between the mobile provider GiffGaff and iPredator which makes it clear that the VPN’s website is blocked because it allows kids to bypass the age restrictions.

“[...] websites or services that offer, inter alia, a method for younger members to access over 18 content, without age verification; such as VPN services, are blocked [...],” the provider explained.

GiffGaff claims that they can’t change anything in the filter’s settings since they use O2′s network and referred to the Independent Mobile Classification Body (IMCB) for further details. TorrentFreak contacted IMCB for a comment on the issue last week, but they are yet to respond.

UK Internet Filter Blocks VPNs, Australia to Follow Soon?[Ernesto/TorrentFreak]

UK censorwall bans VPNs - Boing Boing

UK Internet Filter Blocks VPNs, Australia to Follow Soon?

In the UK mobile Internet providers are required to block content that may be considered “harmful” to children. The filter mainly targets adult oriented content, but one provider now says that VPN services also fall into this category as they allow kids to bypass age restrictions. Down Under a similar filtering proposal is making headlines today, but after a policy backflip it appears that Australia may escape a mandatory Internet filter for now.

Internet filters are now on the political agenda in many countries around the world.

While China and Iran are frontrunners for political censorship, the UK isleading the way when it comes to porn and other types of adult content.

All mobile Internet providers are currently complying with a voluntary code of practice to make adult content inaccessible on their networks by default. Subscribers then have the option to lift the block if they can verify that they are at least 18 years old.

However, mobile filtering alone is not enough to protect the children. Last month Prime Minister David Cameron announced a default filter for all Internet connections. This means that in the near future UK Internet subscribers will be required to opt-in if they want to view adult content online.

After the news broke the Open Rights Group warned that this new filter could also block other content too, including anonymizing services such as VPNs. And indeed, it now appears that this worry isn’t as far-fetched as some thought.

TorrentFreak has learned that VPN provider iPredator is already blocked under the “adult filter” of some, if not all, mobile providers. TorrentFreak has seen communication between the mobile provider GiffGaff and iPredator which makes it clear that the VPN’s website is blocked because it allows kids to bypass the age restrictions.

“[...] websites or services that offer, inter alia, a method for younger members to access over 18 content, without age verification; such as VPN services, are blocked [...],” the provider explained.

 

giffgaff-blocked
 

GiffGaff claims that they can’t change anything in the filter’s settings since they use O2′s network and referred to the Independent Mobile Classification Body (IMCB) for further details. TorrentFreak contacted IMCB for a comment on the issue last week, but they are yet to respond.

Based on the above it is safe to say that censorship is a slippery slope, especially without any oversight. VPNs are used for numerous purposes and bypassing age restrictions is certainly not the most popular one. If this holds up then proxy services and even Google’s cache may soon be banned under the same guise.

Earlier today news broke that Australia may soon be confronted with an equally restricted Internet. The opposition, which is likely to form the new Government, has put forward a proposal to start filtering adult content on both mobile networks and fixed access Internet lines.

Inspired by the UK, the goal of these filters is to protect children from harmful content.

“As has recently been achieved in the UK, we expect these standards will involve the major internet service providers providing home network filters for all new home broadband services, which will be switched on as the default unless the customer specifies otherwise,”the proposal reads.

Interestingly, the coalition quickly distanced itself from the plan once it hit the news. The proposal was deleted and statements Liberal MP Paul Fletcher made to ZDNet were swiftly characterized as non policy.

So it appears that Australia may escape mandatory Internet filters, for now at least.

The UK example, however, begs the question how effective these blocklists are to begin with, and how broad they have to be to reach their goal. If a kid is smart enough to go to a VPN provider in order to unblock content, he or she clearly doesn’t want to be protected.

As we have seen time and time again with piracy-related website blockades, those who want to circumvent blocked content on the Internet will find a way. Unless you take down the entire Internet of course. That might just work.

http://torrentfreak.com/uk-internet-filter-blocks-vpns-australia-to-follow-soon-130905/

Further Reading: http://torrentfreak.com/should-authorities-decrypt-vpns-and-tor-or-ban-them-altogether-130817/

Boing Boing’s Guide to Defeating Censorware

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(see story here)

"The Internet interprets censorship as damage
and routes around it." -- John Gilmore

If your employer or corrupt, undemocratic, dictator-based government uses a filtering service such as Secure Computing's SmartFilter to block access to BoingBoing.net -- or anything else online -- you can try the following workarounds:

  • Distributed BoingBoing mirrors everything on BoingBoing.net at random IP addresses to foil filters.
  • Read "Technical Ways to Get Around Censorship," a helpful primer from Reporters Without Borders: Link.
  • Google can act as a lightweight, proxy-like tool for accessing forbidden sites -- but don't rely on this method for anonymity. Link.
  • The popular RSS reader Bloglines can offer lightweight help in some cases, too. Boing Boing reader Tom says, "I work for a BIG financial services company that apparently uses (not-so-) SmartFilter because BoingBoing has recently become a forbidden site. I use Bloglines as my RSS reader so that I can access the blogs I read from work and home. It turns out that Bloglines is acting as sort of a proxy, since it connects to your RSS feed and not my computer, I'm still able to read BoingBoing at work. Since you publish the full text of your entries in your feeds I'm not missing much, though any photos linked directly from your site are edited out."
  • A group called Peacefire created proxy software called Circumventor to bypass censorware. Install this software on your home computer and allow others to use your proxy to access the web, or use your proxy from work or school to access any web site. (Thanks, Sean!)
  • Bennett Haselton of Peacefire, who developed Circumventor, says:

    "For 90% of users in the USA affected by SmartFilter, there is no reason to use anything but Circumventor. The reasons are:

    1) It's simple to set up. Just run three simple point-and-click installers. We even have a wizard that comes up automatically to help you set up port forwarding on your router if you've never done it before.
    2) You are not required to install anything on the "censored" computer, you just bring a URL in with you to work.
    3) It works even if the censored network blocks direct connections to IP addresses outside the network (which would break some of the other solutions recommended in this guide).

    "If you're in Iran, Saudi Arabia, or some other country censored by SmartFilter, then your best choices are (a) TOR, or (b) use a Circumventor if you can get someone in a "free country" to set one up for you. (The reason Circumventor works for 90% of workplace-filtered users in the U.S. is that they can almost always set it up on their home computer and take the URL in with them. But not everybody in a censored *country* has someone outside who can help them.)

    "Circumventor is the *only* method (as far as I know) that will work reliably on computers where people are blocked from installing their own software (or even changing proxy settings) -- because after you install it on your home computer, all it gives you is a URL, and you can take that URL in with you to work and use it whenever you want. Many people in workplaces and libraries are blocked from installing software on their computers. Or even if they could, it would be a definite 'smoking gun' if anyone noticed that the software had been installed; whereas our software leaves fewer traces. (There is a 'smoking gun' in the form of a URL in the URL history, but that's much less likely to be noticed than a TOR icon on your desktop!)"

  • Rich says, "This cgi-bin script is the guts inside Peacefire's Circumventor - a Perl CGI script that proxys for you. While Circumventor is a full script to get it working under Win2k/XP, the cgiproxy script alone lets you get it going on Linux and (presumeably) Mac OSX. And the best part - the setup is dirt simple - if you're already running a web server, pretty much just drop it in your cgi-bin directory.
  • Access the TOR network. The more people who run Tor servers, the faster and more anonymous the network becomes.
  • Using an SSH tunnel, VPN, or anonymous overlay to an unfiltered network is widely considered to be the best way to protect yourself while accessing "prohibited" content. (Thanks, chris)
  • Chris says, "There is a new option in OpenSSH that allows for ethernet level tunneling using the kernel's TUN interface. This is probably the most powerful solution if you have access to a friendly system to use as the end point of the tunnel. Manual for ssh, see -w option: Link. For ssh_config, see Tunnel option: Link. And one more way to use SSH as a tunnel is to with SOCKS: Link. osx example script: Link.
  • Breaking out of a Proxy Jail. Link (Thanks, Mutz!)
  • Try Daveproxy, and other services listed on the proxy list at samair.ru/proxy together withAntiFirewall (a small app that tests proxies). (Thanks, Joao Barata!)
  • Try Java Anonymous Proxy. JAP uses the TOR network, and installation is pretty easy for non-nerds. (Thanks, Jonas)
  • The Bitty browser, while not initially designed as an anonymizing tool, has helped some of our readers work around corporate internet filters. (Thanks, Scott Matthews!)
  • Some of our readers have found the Coral Content Distribution Network (CCDN) helpful for evading internet blocks. Just add ".nyud.net:8090" at the end of boingboing.net -- for example, instead of typing http://www.boingboing.net to your browser's address line, instead typehttp://www.boingboing.net.nyud.net:8090. If port 8090 is blocked for some reason, the Coral Cache also functions on port 8080. Or, try adding .cob-web.org:8888 to the URL if the Coral Cache is blocked, for an alternate cache network. (Thanks, BeHE, Tian and Michael!)
  • Check out the regularly updated list of public proxy servers at publicproxyservers.com.
  • For BoingBoing readers in the UAE or Qatar, or other countries where BoingBoing is blocked, one anonymous reader tells us: "There is an internet via satellite called OPENSKY sold throughwww.broadsat.com which goes around these problems. Using VPN with normal dialup, the signal gets sent back from Europe, so, uncensored. Works really well and is cheap!"
  • Andy Armstrong says, "I've also set up a proxy for boingboing at boingboing.hexten.net."
  • Ben says, "You can also set your home computer up for remote access. Windows XP has the components built in. If you run XP at home it will take you about 30 min to set up. You can find instructions here. Once you set up remote access you can use Zone Edit freeware to set up a static IP, even if you are on a cable modem. If you really want to go all out register a website for $5 and have that point to the Zone Edit IP address. I can hit my home computer from anywhere with web access, and have its full functionality, including censor-free web browsing."
  • Marcus Aurelius says, "This is how I dodged Etisalat's (The UAE ISP and telco) proxy-server blacklist. It is only really useful for text-rich sites since it involves using Lynx a text browser."
  • Abdul Aziz says, "It's a pain to know that countries and companies alike are blocking and censoring sites like Boing Boing. I face this at my office everyday. I've mentioned two ways on my site by which you can bypass these proxies and filters safely and securely without breaking any rules or arousing the network admin's suspicions." Link
  • Former Censorware Project chief programmer Seth Finkelstein posts anti-censorware resources here .
  • A tutorial on how to bypass Internet Censorship using proxies, shells, JAP, and the like: Link(Thanks, Seth Finkelstein)
  • Michael sez:

    The Anonymizer company has a contract with the Voice of America to provide anonymous internet access for users in a number of foreign countries, including Iran and China. Here's how an Anonymizer sysadmin describes the Iranian portion of the service: "It's based off of PrivateSurfing [...]. Added features for the Iran proxy is full time SSL, URL encryption, Farsi language support, and we switch the proxy website about once a month (every time the Iranian government blocks us). We perform checks on the service from within Iran to see if our site is actually blocked (yes, it works), and we maintain a database of all known e-mail addresses that we can detect as being located in Iran. Every time we switch the proxy site we send an e-mail informing them of the new free proxy location so the citizens of Iran can find it. The sites are also broadcast via radio and TV into Iran by the VOA. To be honest, we're usually about a day behind the blocks, due mostly to time zone differences."

Or...

  • If you're accessing BoingBoing from work, you may be able to ask your system administrator towhitelist BoingBoing.net. That's shorthand for selectively removing the domain from a list of forbidden sites provided by the filtering software vendor. If your employer uses SmartFilter, for example, a sysadmin can selectively allow the BoingBoing.net domain, while keeping the rest of the entries for the "blocked" category in which BoingBoing is listed. Bribing your network administrator with cartons of Skittles and Red Bull may expedite this option. (Thanks, mcsey!)

http://boingboing.net/censorroute.html

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