“Let your plans be dark and impenetrable as night, and when you move, fall like a thunderbolt.”
— Sun Tzu, “The Art of War”
It all starts innocently enough …
You’re checking your bank statement online when the power goes out.
You figure everything will come back on in a few minutes. But after an hour, you call the power company and … “Your call cannot be completed as dialed.”
You give your buddy a call … same thing.
Your texts aren’t going through, either.
You turn on the TV … blank screen.
You find your portable radio and turn it on. Finally, you find a station …
It’s not just your neighborhood … the whole city is down.
You decide you’d better make a quick run into town to grab some supplies.
But you don’t get far before you’re stuck. Traffic is tied up worse than you’ve ever seen … with every traffic light out or blinking red.
You finally get to the supermarket, but the shelves are already bare.
The ATMs aren’t working either … and your bank is closed.
Cars are lined up at every gas station. The pumps aren’t working.
Then you hear about similar things happening in New York … Boston … Chicago … Atlanta …
The entire U.S. power grid is offline.
It was a massive cyberattack on the U.S. homeland.
It’s America’s nightmare … millions are hunkering down, their lives turned upside-down.
I get your skepticism, but I’m not the only one who’s worried about something like this.
In fact, The Boston Globe claims a “cyber world war” is already in progress … and that it will culminate in “bloody, digital trench warfare.”
Cyber wars have in fact already occurred … in the Republic of Georgia, for example.
Russia took down that country’s internet in 2008. That may be across the world for many of us, yet it has the ability to do us harm wherever we may live.
But the greatest threat, in my opinion, is China.
According to a former U.S. information security official, more than 730,000 American computers are infested by Chinese “zombies” — malicious software packages that infect computers and allow hackers to turn them into “slave” computers for use in cyberattacks.
|De-classified map showing Chinese cyberattacks. Notice the concentration of attacks against technology targets in San Francisco, financial targets in New York and military-intelligence targets around Washington, D.C.|
But it’s an attack on our national infrastructure that scares me the most.
With China’s economy slowing and its epic $34 trillion debt growing …
Its leaders — thinking their national strength has peaked — could decide to make the ultimate gamble.
To thumb their nose at Donald Trump … and make CHINA great again!
Unlike atomic bombs or ICBMs, cyber weapons don’t need a campus of brilliant scientists to be deadly. All they need is a roomful of computers and a small corps of people trained to use them.
And unlike conventional warfare, a cyberattack can be launched instantaneously … from anywhere in the world.
By far, the most devastating attack would be on the U.S. power grid …
Without electricity, the electric gas pumps won’t work, so trucks couldn’t get fuel to transport food to supermarkets.
Traffic lights wouldn’t work, so huge traffic jams would paralyze cities.
Credit card readers wouldn’t work … ATMs would go down … banks couldn’t open.
Most businesses couldn’t function, leading to devastating financial losses from major corporations to mom-and-pop establishments on Main Street.
Cyberhackers working for Russia crippled three Ukrainian utilities on Dec. 23, 2015, plunging hundreds of thousands of civilians into darkness on a chilly winter’s eve.
A year later, Russian hackers knocked out a major transmission sub-station, causing a smaller blackout in the capital city of Kiev.
Ukraine proved that hostile actors could create blackouts with a variety of cyber tools and get away with it.
The threat is so serious that in June 2018, a group of presidential advisers said the country needs to prepare for a “catastrophic power outage” caused by a cyberattack.
The National Infrastructure Advisory Council even says resources should be stockpiled in communities to prevent mass migrations of desperate people.
Imagine if someone “simply” penetrated a stock exchange …
In one scenario, an attacker could activate a drone placed inside the order entry system of, say, the New York Stock Exchange. Once inside, the attacker would place large sell orders on highly liquid stocks like Apple or Facebook.
An attack like this would be launched on a day when the market was already down 3% or more.
The result could be a jaw-dropping decline of 20% or more in a single day, comparable to Black Monday in 1987 … or the Crash of ’29.
Tens of millions of Americans would suffer an immediate loss of wealth as prices plunge and accounts are locked-down or frozen.
But it isn’t all gloom and doom. The Trump administration proposed granting $17.43 billion for cybersecurity in 2020 … a 5% increase from 2019’s budget.
The goal is a broad-based cybersecurity strategy for government networks, critical infrastructure and technology.
As an investor, you can grab some of this money with the ETFMG Prime Cyber Security ETF (HACK).
And with it trading near the bottom of its range, this just may be your chance to catch a ride as it breaks to the upside.
All the best,