Britannia Radio

Dear Daily Crux reader,  This month, many people were shocked by reports that the U.S. government has been unconstitutionally spying on the calls and e-mails of every single American. But regular Crux readers weren't surprised… This scandal is just a small glimpse of a much larger and growing threat. Originally published last spring, the interview below was one of the most controversial we've featured… But as recent events have shown, it's likely one of the most important as well. Whether you're new to the Crux or never miss an issue, we urge you to take a few minutes to review this important advice immediately. If you didn't take action before, time could be running out. Regards,  Justin Brill  Managing Editor, The Daily Crux  www.thedailycrux.com

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The Daily Crux Sunday Interview It's time to protect yourself from  a dangerous trend…   The Daily Crux: We were recently introduced to your work by our friends at Casey Research. For readers who aren't familiar, can you give us a little background on yourself?    Pete Kofod: I served in the U.S. Army for 16 years… most of the time in the Special Operations community, including six years on a Special Forces detachment.   After leaving active duty, I went to work in the Information Technology (IT) sector… eventually starting Datasages, a company that provides strategic IT consulting and now cloud computing solutions for medium-sized organizations.   My most recent project is co-founding Theia Global, a company geared toward providing risk management and contingency planning solutions for individuals. We provide synopsis and analysis of existing and emerging risks and threats, as well as training to help mitigate what we believe are core risks in today's environment.   Crux: We enjoyed your recent essay, "The Race Through the Gate." In it, you use systems engineering terms to explain a dangerous situation you see developing in the world – and especially the U.S. – today. You refer to it as a "cultural race condition." Can you briefly explain what this means?    Kofod: Sure… In simple terms, a race condition is a situation in which the outcome of an event is highly unpredictable because it depends closely on the sequence and timing of underlying forces, events, and agents of change.   On one hand, we are seeing the Internet and social media as a force of global liberalization and individual empowerment. As an agent of cultural change, the last time information distribution underwent such a radical transformation was over 500 years ago… when Gutenberg invented the movable-type printing press.   This is very threatening to "the establishment," which has relied on centralized control of message and medium to maintain their position of advantage.   We are seeing significant efforts on the establishment's part to restrict movement of information, capital, and people. While some of these restrictions are being introduced through legislation, many are being implemented administratively with little to no notice.   The good news is, if history is any guide, these restrictions will eventually fail… But the journey in the meanwhile may get a bit "bumpy."  Crux: One of the key points in your essay is that the outcome of this "race" is likely to be incredibly positive for individuals and society as a whole, but it will be extremely dangerous and volatile for those living through it. What kind of dangers do you expect?    Kofod: We are already seeing the dangers. The unrest in the Middle East, fueled by decades of misrule, has seen social media as key to organizing opposition against entrenched regimes.   The eurozone is reaching for its favorite playbook in dealing with economically stressed members, but the people want no part of it. I don't think we've seen the last country opting out of a bailout, like Iceland did.   Like the Moroccan plate spinner, it is only a matter of time before the mess comes crashing down.   In the United States, a privacy activist recently posted a YouTube video showing how simple it is to bypass the TSA body scanners, an action that resulted in him being visited by several government agencies. Talk about shooting the messenger.   I participated in a digital security conference a few years back. One of the speakers, a 35-year veteran bureaucrat from some Federal agency said in his presentation, "We have to get our hands around cyber." He must have said it a dozen times.   Aside from the fact that using the word "cyber" as a noun instead of a prefix makes no sense, his organization taking this position is very instructive. We should be prepared for significant pushback from the old guard. They have much to lose and will not give it up without a struggle.   I would not be surprised to see increased encryption controls, along with what we are already seeing in the financial sector. As your readers know, in the United States, citizens are now required to list all overseas financial holdings once the total value exceeds $10,000.   I wouldn't be surprised if as a part of a personal tax return, citizens were required to submit all private encryption keys. All for the common good, of course… ----------Advertisement--------- A crazy new way for the gov't to spy on you  If you think privacy in America is disappearing now, wait until you see what the government has up its sleeve next. Get the full story here… --------------------------------- Crux: You recommend some very specific steps that individuals can take to protect themselves. First, you suggest that everyone needs to participate in social media. For those readers who aren't particularly tech savvy, can you explain why this is important… and some practical ways to get started?    Kofod: The power of social media lies in the power of smaller groups within a larger group. When you combine the concept of "six degrees of separation" with the power of Internet-delivered content, powerful messages can spread explosively.   Consider the recent "Kony 2012" YouTube video that was promoted on Facebook. Regardless of the controversy that surrounds the producers of the video, it's irrefutable that the medium served as an incredibly powerful conduit of the movie's message.   A few years ago, there was no mechanism in place for such viral distribution of content. Social media serves today as an early reporting system for news and events that are of interest to people. In time, it may well be the only reporting system.   It concerns me when people say that they "don't do Facebook." It indicates that they believe social media to be a technology concept. Many people are concerned about privacy… and those concerns are certainly valid. But there are ways in which you can obtain maximum benefit from social media with marginal impact to privacy. While some things can be inferred based on the demographics of your network, by maintaining diverse interests, you don't telegraph your deepest-held values.   In my article, I state that contributing to social networks is optional, which is true. I would encourage people to get started by opening a Facebook account. You do not have to enter any personal information that you don't want to. Name and e-mail is about it, and the e-mail is not public if you don't want it to be. You can even create a "throw away" e-mail address on Gmail for that purpose alone.   Begin by adding some friends and see what they post. By familiarizing yourself with  Facebook, you will develop a sense of how quickly information can be processed and distributed.   Crux: You mention some specific precautions regarding social unrest as well. What do readers need to know?    Kofod: Managing risk is a highly individualized process. For example, a person that requires dialysis three times a week needs a risk management plan that is far different than that of a healthy young person starting off a career…   That being said, there are a couple points that are universal to social unrest. One is that it can happen anywhere. All that is needed is a triggering event, such as rising gas prices, reduction in government services, or even a natural disaster, such as Hurricane Katrina.   Second, and perhaps not as obvious, is that peaceful, productive citizens who get caught up in social unrest have two potential adversaries.   One is obviously the rioting element that may steal your property or worse. The other is the State, whose primary objective is to restore order… its order. Protecting your property and welfare is not their highest priority. You may find that reporting property crime during social unrest is, at best, a fool's errand.   And if a person lives in an area with a vulnerable supply chain for basic necessities, including food, water, and power, I would strongly encourage them to develop mitigating strategies and contingency plans.   For example, if you live in greater Chicago, an area with a population of 10 million, food travels an average of 1,500 miles from the farm to your plate. So it is critical to have a backup plan should the food supply chain become disrupted.   If you have critical medical needs, you should work with your medical care provider team to develop alternate solutions.   It goes without saying that having some cash in hand is very important. I, of course, recommend holding physical gold as well, but that is obviously a philosophical preference.   Fundamentally, the key is to consider what your daily life looks like. In social unrest, what would be catastrophically impacted versus what would represent a temporary nuisance?    Of course, keeping a healthy distance from social unrest is usually the best course of action. I recently spoke with Doug Casey and David Galland of Casey Research, and told them that there is nothing dangerous about a large structure collapsing, provided you are far enough away from it. I was semi-joking, but sometimes all you need to do to avoid a mess is to get away from it.   Once you identify what your mitigating steps and contingency plans are to the risks you have identified, your next step is to determine and develop the skills and resources needed to support those plans. Having a backup plan that is neither viable nor logistically supportable is not helpful.   If possible, take the plans through a test run. One of the biggest issues that large companies deal with is disaster recovery of the IT environment. Yet for all the money that they spend on such solutions, they rarely take the time to test their backups.   Believe me, you need to test your backup plans. You will be surprised how initial assumptions don't always play out.   Finally, physical security is obviously an issue during social unrest. An interesting, yet underreported fact is that we are starting to see low-ransom kidnapping on the rise. It's not all about the multi-million dollar ransoms that Hollywood loves to project. The middle class and upper middle class are seeing it as well.   As the lower and middle class increasingly feel financially marginalized, some of its members are taking desperate measures to make ends meet. This is not only a crime of Mexico and Somalia… ----------Advertisement--------- Do you know what to do if you are in a public area and someone starts shooting?  Do you know the safest place to sit on any airplane… Or the clever $20 technique that thwarts almost all burglars? Get the facts on dozens of survival secrets here. --------------------------------- Crux: You also mention the growing importance of "digital risk." Is this a concern for everyone today? What are some things readers can do to protect their digital identity?    Kofod: It absolutely is a concern for everyone. Whether you like it or not, you have a digital identity, and it is probably far more detailed than you would think.   Your online purchases, your search history, your social media profiles, your text messages, and tax records all form part of your digital identity. It is simply impractical to try to eliminate your digital twin sibling.   Fundamentally, protecting your digital identity is similar to protecting your physical person and property, with two significant differences. One is that your digital identity is not geographically constrained, so the protection mechanisms must follow the data.   Perhaps more significantly is the fact that your digital identity, by definition, is shared with others. That means that to a certain extent, you have to rely on others to treat your personal information with care.   On top of that, the right to privacy from the State has all but been eviscerated. Sure, there are some quaint laws regarding privacy, but they represent a fig leaf in a snow storm.   When I entered the IT sector in the mid-1990s, there was a saying that you should never write anything in e-mail that you were not willing to see that evening on the news. Unfortunately today, the biggest part of your digital identity is not under your direct control. This includes tax records, medical records, cell phone records, and what others say about you on social media sites like Facebook.   Instead of trying to retreat in to a cave, stay informed about what the real risks are. Engage with digital privacy and security experts who can help develop mitigating strategies to minimize the risks in your life.   The truth is that it is impossible to completely eliminate risks associated with your digital identity. The key is to not be the low-hanging fruit for those who would seek to exploit it. Make it hard enough and they will move on.   Here is a simple recommendation: Don't use the same password on every website.   You are literally placing the safety of your digital identity in the hands of the website with the weakest security policies. Yes, it is inconvenient to manage that many passwords, but there are plenty of good password storage programs out there. Use one that securely syncs with your mobile device.   I have been very happy with SplashID Safe, but there are dozens out there. The key is that it is not the tool, but following the process that mitigates your risk. Password complexity and using a different password for every website can significantly reduce your chances of things going awry. If you use the same password for banking as you do for the local softball team website, you are setting yourself up for a very bad day.   There are dozens of other mitigating steps, but password management is a key weakness that most people ignore, frankly because it is a hassle.    Crux: Finally, you note the importance of "teaming" and sharing resources. Any suggestions here?    Kofod: The core premise of the article is that the world is growing geometrically in complexity and existing social structures are starting to crack.   There is simply no way for an individual to obtain all the knowledge and develop the skills on their own to effectively manage the associated risks of this change and complexity. Technology changes, financial system instability, and social upheaval are all part of the ever-changing landscape before us.   The reason your readers subscribe to your publications is because they know they can't do it by themselves. They recognize certain risks and opportunities in the world, but know they will need guidance and supporting facts… And they have long-since given up on traditional broadcast media as the infallible source of actionable information.   I heard a speaker once say that where you are in five years is a function of what you read and who you hang out with today. If your information diet consists of the mind-numbing pabulum spewed forth by traditional mass media, don't be surprised if things don't pan out the way you want them to.   Conduct regular goal exercises and identify factors that would prevent them from being achieved. Then expose yourself to teams and organizations that share your outlook and want to see you succeed.   This is not revolutionary news, but it does require swimming against the stream. And above all, it requires a commitment to a life of continuous learning. Whether subscribing to newsletters, reading thought-provoking books, attending investment conferences, or joining communities of individuals who share your outlook, these are the commitments that must be made and followed through to achieve goals centered on independence.   Thomas Jefferson said that the price of freedom is eternal vigilance. In this instance, eternal vigilance involves becoming and remaining a student of a rapidly changing world, looking for hidden trends, and making prudent course corrections and contingency plans.   Crux: You've certainly given us a lot to think about. Any parting thoughts?    Kofod: We are living in a very exciting time. I believe the opportunities that lie before us will make the past pale in comparison. Taking advantage of those opportunities, however, will require you to keep your head on swivel.   As existing social structures – including some sovereign nations – go through radical transformations, there will be some bumpy rides… not unlike a plane entering the jet stream.   That means you must have resilient systems in place to carry you to the next level. Failing to do so will, at best, leave you in a position of not making gains, and may potentially set you up for significant losses.   By staying informed on emerging opportunities as well as threats, you can set yourself up for substantial gains while significantly reducing downside risks in all aspects of your life.   Crux: Thanks so much for talking with us, Pete.   Kofod: You're welcome. Thank you for inviting me.