2022-02-24_A_Sobering_Discussion_of_How_Things_Could_Get_Worse_in_Days_to_Come
00:00:00.000 | Welcome to Radical Personal Finance, a show dedicated to providing you with the knowledge,
00:00:03.880 | skills, insight, and encouragement you need to live a rich and meaningful life now while
00:00:08.040 | building a plan for financial freedom in 10 years or less.
00:00:11.040 | My name is Joshua Sheets.
00:00:12.040 | Today I want to continue talking about some of the fallout from the Russian invasion of
00:00:17.160 | Ukraine and specifically I want to talk about some things that could happen, potentialities,
00:00:23.400 | in the coming days and weeks.
00:00:29.000 | If you will think about some of these things, you may succeed in making good plans to prepare
00:00:37.960 | for them if they did happen to protect yourself and your family from anything that could potentially
00:00:44.680 | happen.
00:00:45.680 | For context, the day is Thursday, February 24, 2022 and in the last 18 hours Russia has
00:00:53.920 | invaded Ukraine and the extent of the invasion is quite significant.
00:01:01.200 | Situation on the ground is very serious.
00:01:03.920 | You have Russian troops coming in by all methods.
00:01:07.180 | You have Ukrainian government has declared a massive national emergency.
00:01:14.040 | But more than that, they have gone to a system of martial law.
00:01:18.520 | They are on an absolute wartime footing at this point in time.
00:01:23.160 | Even to the point where they are opening up military armories and passing out weapons.
00:01:28.520 | Reportedly, they passed out 10,000 weapons in the central city of Kiev, the capital city
00:01:32.920 | of Kiev.
00:01:33.920 | 10,000 weapons to basically any person who will come and wield those weapons.
00:01:39.200 | I've been trying to confirm this.
00:01:41.120 | I think it seems the case.
00:01:44.800 | But at this point in time, any men of military age are not allowed to leave Ukraine.
00:01:52.440 | The Ukrainian parliament has imposed a national state of emergency and they have announced
00:01:59.800 | compulsory military service for all men of fighting age.
00:02:05.440 | This is even to the point where I have obtained reports, again I'm not a verified journalist,
00:02:11.480 | this is just Joshua's web snooping and looking around, but even reports that the surrounding
00:02:16.840 | nations such as Poland, they are not letting fleeing males enter the nation of Poland.
00:02:25.480 | On the Polish border, they have been accepting Ukrainian refugees, people fleeing Ukraine,
00:02:31.640 | but now they're not even letting Ukrainian men enter the border out of respect for the
00:02:36.640 | government's forced, the Ukrainian government's forced conscription.
00:02:40.680 | So it's an incredibly serious time.
00:02:43.940 | You have a dictator with tremendous force who has made decisions to take things to a
00:02:52.160 | very, very high level.
00:02:54.320 | And of course, as always, it's a real mixture.
00:02:56.440 | One of the amazing things about the modern era is you can watch online, if you're a decent
00:03:02.960 | OSINT enthusiast or if you're a decent web snooper, you can find lots of on the ground
00:03:08.400 | reporting and you can see that there are many areas of intense problems, but on the whole,
00:03:16.560 | it's kind of peaceful in terms of many streets.
00:03:19.760 | Not like it looks like everyone is facing trials all at once, it's just in isolated
00:03:24.880 | areas as the invaders spread across the country.
00:03:28.240 | But certainly the scenes are quite shocking.
00:03:31.240 | I think one of the most shocking things and sobering, you see the Ukrainian people taking
00:03:37.040 | shelter in their underground stations, stretching out and sleeping in the underground stations
00:03:42.220 | for fear of aerial bombardment.
00:03:44.040 | And of course, it harkens back to the images that we know so well from the people sleeping
00:03:50.800 | in the London underground during the aerial bombardments in World War II, etc.
00:03:56.240 | And so a very serious situation.
00:03:59.600 | If you're on the ground in Ukraine, my thoughts are with you and I pray that you'd be protected
00:04:06.920 | and no great courage as you confront those who are invading your land.
00:04:13.560 | If you're on the ground in Russia, there's a whole different set of situations that you
00:04:23.560 | are facing.
00:04:24.560 | There are thousands of Russians protesting the war in public squares and as is always
00:04:31.560 | the case in a tyrannical society.
00:04:34.160 | Like Russia, you have the police sitting there shuffling them off, arresting hundreds and
00:04:38.400 | hundreds of protesters for voicing their opinion in the streets of Russia.
00:04:46.200 | And so it's a serious situation all over.
00:04:49.600 | And today President Biden in the United States announced wide-ranging sanctions, freezing
00:05:00.080 | the assets of Russian banks held in the United States, freezing the assets of various powerful
00:05:06.760 | and notable Russian citizens, widespread sanctions on the nation of Russia.
00:05:14.400 | Now the question is, what happens from here?
00:05:17.320 | And of course, we don't know, we're all guessing.
00:05:20.360 | There's a major difference today from 48 hours ago.
00:05:23.640 | 48 hours ago, the US administration, US intelligence agencies were warning of an almost certain
00:05:29.760 | invasion of Russia and there were many who were quite skeptical of that.
00:05:33.720 | Well now everything is different.
00:05:35.600 | And so the question is, what happens from here?
00:05:37.400 | Where do you go from here?
00:05:39.240 | The international outcry against President Putin and his actions has been significant
00:05:45.320 | and so we can expect quite significant response.
00:05:48.960 | But it would seem foolish to me to think that President Putin has not anticipated the response.
00:05:55.560 | The response that has happened so far is about what you would predict.
00:05:59.520 | You know, economic sanctions are the favorite and most commonly used tool of international
00:06:05.760 | sanctionary, international, I can't say diplomacy, but international actions.
00:06:11.560 | When you have large and powerful countries who don't wish to commit their soldiers and
00:06:17.640 | armed forces to actual war and don't want to engage in even necessarily virtual war,
00:06:24.680 | whether it's lobbying missiles or doing aerial bombardments or engaging in cyber warfare,
00:06:30.600 | you don't want to, then they use sanctions.
00:06:35.080 | But sanctions certainly seem to have quite limited effects and it would seem to me that
00:06:39.400 | President Putin has spent the last years working very diligently to build up the economic self-sufficiency
00:06:47.000 | of his nation, pay down national debt, improve the situation so that they would not be as
00:06:51.760 | affected by sanctions, and also sought to form alliances, I think, perhaps most interestingly
00:06:58.000 | or worriedly, most notably, perhaps with the nation of China.
00:07:04.360 | At this point in time, I have a couple of serious concerns of things that could happen,
00:07:10.040 | notwithstanding the serious situation that the Ukrainian and Russian people are in.
00:07:15.760 | Those of us who are physically more distant, I think we also have our own concerns.
00:07:21.120 | First, there's going to be a significant disruption in markets, and I think the most
00:07:26.720 | important disruptions will come in the energy markets.
00:07:30.960 | I think you can expect and should expect a significant rise in energy prices.
00:07:36.200 | Now, I'm not competent to elucidate exactly the play-by-play moves that are likely to
00:07:41.640 | come.
00:07:42.640 | One of the interesting pieces of bargaining power that President Putin has is the control
00:07:48.600 | over gas supplies to much of Europe.
00:07:54.200 | While there is some maneuvering at the edges, much of Europe is exceedingly dependent upon
00:08:01.080 | Russian gas supplies.
00:08:03.120 | If you are in Europe, you should be significantly concerned about that and how that may impact
00:08:11.920 | your life.
00:08:12.920 | To the extent, you should consider, of course, electricity prices, fuel prices, etc.
00:08:18.200 | Heating prices may be significantly affected, and that should factor into your thoughts
00:08:23.640 | in terms of your personal finances and/or your investment decisions.
00:08:28.520 | The energy situation in the United States is very concerning because over the last couple
00:08:34.680 | of years, major domestic supplies of energy have been shuttered and turned off.
00:08:40.760 | You had the cancellation of the Keystone Pipeline project that would have brought a tremendous
00:08:45.920 | amount of energy into the United States from our stable northern neighbor.
00:08:51.240 | But what is concerning to me is not just the standard market disruptions, but the potential
00:08:56.560 | for things to escalate to the scale of cyber warfare.
00:09:03.840 | I want to be cautious and not overstate things, but I think the most important and compelling
00:09:10.380 | story of the last year was the Colonial Pipeline hack in the United States that resulted in
00:09:20.120 | widespread fuel shortages, major disruptions in many places in the United States, and again
00:09:27.960 | widespread fuel shortages to the point where many gas stations are simply not prepared.
00:09:34.640 | I think the biggest weakness that you have in many of our nations is our dependence on
00:09:42.400 | electricity, but more properly, you have our dependence upon modern information technology.
00:09:52.820 | It would seem to me that we're pretty well behind the curve in terms of protecting these
00:09:58.500 | technologies from external attack.
00:10:02.100 | Originally, when the technology was invented, it was invented for utilitarian purposes.
00:10:08.540 | It was not invented and planned that it would somehow be a secure utility protected from
00:10:17.660 | modern threats.
00:10:18.660 | Let me give a metaphor example and some practical examples.
00:10:21.860 | If you think about something like email, people are often concerned about the security of
00:10:27.500 | email, rightly so.
00:10:29.180 | You have conversations about things like encryption.
00:10:32.180 | How do you encrypt your emails for privacy?
00:10:34.820 | How do you hold your emails encrypted?
00:10:37.380 | How do you make email secure?
00:10:39.860 | There are certain ways to improve the security of email, but at its core, the fundamental
00:10:45.460 | flaw in a security analysis of email is that email was never designed to be secure.
00:10:51.500 | By its very nature, the way that the system uses header information to process messages
00:10:58.260 | and send them from the sender to the recipient, it was designed to be an open and semi-public
00:11:04.700 | form of communication.
00:11:06.540 | You can come along and you can encrypt certain things.
00:11:10.420 | You can make certain tweaks to improve the security of email, but at its core, email
00:11:16.940 | is fundamentally unsecure because it was never designed with security in mind.
00:11:21.820 | This is why if you are concerned about security and you move from email to something like
00:11:29.220 | a modern secure messaging app, you automatically have a significant upgrade in security because
00:11:35.540 | these new messaging applications were designed with security in mind.
00:11:41.100 | They're substantially more secure.
00:11:42.740 | They protect the metadata.
00:11:43.820 | They have more protection around concealing the identities of the people communicating
00:11:49.540 | in addition to actually securing the message itself.
00:11:53.580 | Now let's go to the world that we live in.
00:11:58.100 | Something like the electrical grids upon which we are so dependent for our modern lifestyle.
00:12:05.580 | The electrical grids were originally an analog system and then they became a digitally operated
00:12:13.620 | and intelligently operated grid system.
00:12:17.340 | But these grids were not originally designed to be secure.
00:12:21.340 | You didn't have the US military coming in and building a grid to be protected.
00:12:27.380 | Rather what you had was computer scientists saying, "Let's make this more efficient."
00:12:32.340 | But there were lots and lots of vulnerabilities in the electrical grid.
00:12:35.540 | One of the things that's so shocking is when you start to look into attacks upon drug or
00:12:41.300 | cell electrical grids, there's abundant evidence of many people who have attacked things like
00:12:46.340 | an electrical grid.
00:12:48.340 | Similar with other aspects of data, information security, etc.
00:12:52.540 | And again you saw in the colonial pipeline situation, the debacle from this past year,
00:12:58.540 | that it's quite possible for smooth, sophisticated people on the other side of the world to manipulate
00:13:09.060 | something as basic and mechanical as a pipeline to very disastrous effect.
00:13:16.220 | When you think about other recent stories, this last couple of weeks in the Canadian
00:13:24.900 | Freedom Convoy protests, you had, remember what you had with the financial situation.
00:13:31.820 | So originally the Canadian truckers had a GoFundMe account set up.
00:13:36.940 | Then the Canadian government sued GoFundMe and said, "We're going to block the funds."
00:13:42.260 | GoFundMe said, "All right, well, we're going to give some of the money back and then the
00:13:46.460 | money doesn't go back.
00:13:49.260 | We're going to return our people's donations if they claim them.
00:13:52.060 | And then the money that's not claimed, we're going to send it on to some not-for-profit
00:13:55.620 | entities."
00:13:56.620 | And everybody made a ruckus.
00:13:57.620 | A few hours later, they said, "We're going to send the information back."
00:14:00.220 | But the important point, sorry, send the money back and then they refunded everybody's donations.
00:14:06.180 | The important thing here though is what happened next.
00:14:09.020 | Next, the site GiveSendGo, which bills itself as an alternative Christian-oriented collection
00:14:18.060 | site for fundraisers said, "Well, we'll step up and we'll protect the truckers."
00:14:23.500 | And so they started raising money for the truckers saying, "We're not going to buckle
00:14:29.200 | our knees like GoFundMe did in face of government control."
00:14:32.260 | Well, some, I don't know who, but some hackers took on GiveSendGo and they succeeded in a
00:14:43.660 | couple of things.
00:14:44.660 | Number one, they scraped all of the data from those who contributed to the GiveSendGo campaign
00:14:52.180 | and they started publishing that hacked, scraped data online.
00:14:58.060 | The second thing they did was they took the website down and they replaced it with their
00:15:04.580 | own messages, rather crude messages saying, "Why are you doing this?"
00:15:09.580 | And so they showed their power over the GiveSendGo website.
00:15:15.620 | That data that they scraped and then published was then used and is being used as a major
00:15:23.840 | point of division and controversy within primarily Canadian communities and then also other communities
00:15:33.360 | around the world as well.
00:15:36.100 | Journalists started going through that data and they started studying who is involved
00:15:40.680 | in that data.
00:15:41.920 | Who is, what are the names that are there?
00:15:47.520 | What are the domain names of the email addresses?
00:15:49.900 | There are various staffers filed because they made their contribution to GiveSendGo using
00:15:53.800 | their corporate email address.
00:15:55.720 | Companies are being asked.
00:15:56.840 | Journalists are emailing people saying, "Hey, there's somebody with your name and your email
00:16:02.080 | address made a $40 donation to the Freedom Convoy campaign in Canada, which is now of
00:16:08.800 | course billed as an insurrection in the Canadian system.
00:16:13.280 | And so people trying to throw over the government, what do you have to say for yourself?"
00:16:17.800 | And then what has also happened is that information has been used and spread still farther.
00:16:23.560 | So there have been reports of people taking those names and addresses of the people making
00:16:30.200 | the donations and they're printing them out on basically shame lists, printing them on
00:16:35.000 | a paper and putting them on the front doors of their building saying, "You should know
00:16:39.640 | your neighbours.
00:16:40.640 | Here are the 15 people in our building that contributed to the occupation of Ottawa 2022.
00:16:46.780 | And here are their names, here are their contribution amounts, et cetera.
00:16:49.520 | Know your neighbours."
00:16:50.840 | And so this information is being used to sow significant levels of distrust and disharmony
00:16:58.680 | in what was formerly a country where you had a pretty peaceful, harmonious relationship
00:17:06.520 | among its citizens.
00:17:10.080 | Those are a couple of stories of relatively isolated events.
00:17:14.680 | Now, when you think about somebody or a military empire with far more resources than those
00:17:26.640 | particular events, you're not dealing with something small.
00:17:31.560 | Those events are small with regard to the widespread destruction that can be raised
00:17:37.840 | through hacking, through cyber warfare.
00:17:41.360 | And the Russian cyber warfare capabilities are extraordinarily extensive.
00:17:49.240 | They're being used to some extent right now as the Russian armies invade Ukraine.
00:17:55.960 | They'll be used by the dictator of Russia himself as he suppresses dissent, as he works
00:18:03.320 | in his own society, he will use his cyber warfare capabilities.
00:18:07.520 | The question is, will those cyber warfare capabilities be used beyond the borders of
00:18:15.400 | Russia and Ukraine?
00:18:17.560 | I don't know, but I consider it a significant threat, very much worth thinking about.
00:18:23.480 | What would that look like?
00:18:24.480 | I don't know.
00:18:25.480 | It could be quite significant in terms of disruption of electricity grids, disruption
00:18:34.500 | of pipelines, those things could be seriously costly and seriously disruptive.
00:18:41.040 | They could be more of what Russia has been doing significant amounts of, of just simply
00:18:46.360 | misinformation campaigns, sowing discord and distrust among societies, including the American
00:18:55.280 | society.
00:18:56.840 | That's a very, very significant and powerful thing.
00:18:59.400 | You see that right now.
00:19:00.400 | You see that, that right now the political administration in the United States enjoys
00:19:08.440 | extraordinarily low levels of consensus and support because of the widespread distrust
00:19:17.040 | among the American population.
00:19:20.000 | The significant levels of acrimony, of infighting, of arguing, etc. has been enhanced by many
00:19:28.880 | misinformation campaigns.
00:19:31.400 | It's hard for me to assess the percentage of the blame, how much goes to real legitimate
00:19:40.080 | conversations over and disagreements over the issues at hand, how much is to blame for
00:19:45.720 | people for the fundamental nature of the downsides of communicating with one another on Twitter,
00:19:55.080 | how much is due to the Russian misinformation farms, I don't know.
00:20:00.280 | But I do know it's a significant problem and it makes, it makes it very, very difficult
00:20:06.840 | for a nation to give some kind of unified effective response.
00:20:15.600 | I think this is a far bigger risk than many people are thinking of or considering.
00:20:22.640 | Again I don't see how President Putin would gain by antagonizing a country like the United
00:20:31.040 | States.
00:20:32.160 | It would seem to me, not knowing all of his evil machinations, it would seem to me that
00:20:38.600 | he has his ambitions, he has tested and proven a number of times with the annexation of Crimea,
00:20:44.960 | the invasions in Georgia, he has tested and proven that he can take certain levels of
00:20:49.720 | military action and get away with it and be left alone by the rest of the world.
00:20:56.280 | And right now it would seem pretty obvious that no one is particularly interested in
00:21:01.960 | signing up to go and fight alongside the Ukrainians.
00:21:04.560 | The Ukrainians are pretty much on their own.
00:21:07.120 | Certainly Western countries are willing to send some levels of materiel support, I'm
00:21:14.920 | sure intelligence support, information sharing, etc. but there's no appetite for outright
00:21:22.840 | side-by-side fighting with the Ukrainians from at least any government that I can see.
00:21:29.000 | And so it's going to be pretty much down to the Russians and the Ukrainians themselves
00:21:33.400 | to fight out their problems, or at least as far as they're going to go.
00:21:39.720 | But that doesn't mean that other countries may not be involved.
00:21:43.720 | I think that it's easy to, when you live in a place like the United States or in Canada,
00:21:50.720 | it's easy where most of my listeners do live, it's easy to feel protected and secure.
00:21:56.000 | I think the United States has proven time and again that she has very little to fear
00:22:02.800 | with regard to outright invasion.
00:22:06.480 | Certainly you can go back and you can look at the invasion of 1812 and try to learn from
00:22:11.600 | whatever lessons there are from that period.
00:22:14.120 | But in terms of actually invading the United States, it is an almost impossible country
00:22:22.520 | to invade from a military perspective.
00:22:28.120 | What are the reasons for that?
00:22:29.120 | Well number one, of course, the nation is massive and has the world's largest military
00:22:33.520 | spending, and that military spending has created a very, very significant level of military
00:22:42.240 | infrastructure.
00:22:43.240 | It's my opinion that the US military is actually quite weak, both on a relative basis
00:22:49.400 | and on an absolute basis.
00:22:51.280 | What I mean is it's much weaker today than it was a decade ago, or a couple decades ago,
00:22:57.760 | for reasons of lack of investment, lack of intelligent leadership, and also just distraction
00:23:03.780 | from the core of the mission.
00:23:06.640 | It would seem to me, not being a military guy, that the military itself is quite weak.
00:23:11.680 | And also just in terms of the results, what's actually happened.
00:23:16.640 | To me it seems obvious that the US military hasn't won a war since World War II.
00:23:20.880 | And there's been a successful campaign that we all point to of Desert Storm, and then
00:23:26.440 | it turned out that that wasn't as successful long term as anybody thought.
00:23:30.980 | And so when you actually look at the results, the results are not good.
00:23:34.200 | But I think that where all of the biting would be about US involvement in foreign wars, if
00:23:38.920 | somebody ever actually invaded the country, that would instantly unite virtually all Americans.
00:23:45.200 | Because at its core, even though the American culture is one that thrives on argument, dissent,
00:23:51.680 | debate, fighting, etc.
00:23:53.640 | It's a very violent culture.
00:23:56.060 | It's something where there would be an incredible unification.
00:23:59.120 | And due to the strong military, due to the strong militia, and I mean that in the informal
00:24:10.120 | sense, meaning that all adults are part of the militia in terms of the local people,
00:24:15.440 | due to the widespread levels of gun ownership in the United States, right, the Ukrainian
00:24:19.240 | government is handing out 10,000 rifles to anybody in Kiev.
00:24:22.520 | I don't know what 10,000 rifles is going to do in a city of millions and millions of people,
00:24:28.560 | in a nation of tens of millions of people.
00:24:31.280 | But it's a good start.
00:24:32.280 | In the United States, every third person has a gun collection that can arm all of their
00:24:37.400 | neighbors.
00:24:38.400 | And so in terms of defense, I don't think you would ever have any kind of military defense.
00:24:44.480 | Traditionally, that's why the United States has been so concerned about intercontinental
00:24:48.240 | ballistic missiles, about nuclear threats, etc.
00:24:52.080 | But I think in the modern age, the bigger threat is cyber warfare.
00:24:56.560 | I think the bigger threat is disruption due to cyber warfare.
00:25:01.560 | Because the Russian military could unleash a series of cyber attacks on the United States
00:25:07.800 | that could be broadly devastating, very, very devastating in terms of actual impact, actual
00:25:16.800 | disruption, actual empty gas stations, actual electric plants not working anymore, actual
00:25:23.280 | fires blown off due to voltage overloads, etc.
00:25:30.880 | Actual widespread destruction in cities and in economies in terms of companies going down
00:25:38.520 | and main and computers being affected and software not working anymore.
00:25:43.600 | And actual effects, so whether that is most extreme levels of cyber warfare like that,
00:25:49.600 | or the more minor, just increasing levels of misinformation, argument, lack of distrust,
00:25:55.680 | more distrust between neighbors.
00:25:57.280 | It's very, very serious to consider the impact in the modern age.
00:26:01.880 | And so while I don't know that that would lead to the defeat of a nation or the conquering
00:26:07.160 | of a nation, I think it could lead to major disruptions in your and my lifestyle, major,
00:26:14.040 | major costs.
00:26:15.600 | What would the response then be?
00:26:17.720 | I don't know.
00:26:18.720 | I'm not a sufficient chess player.
00:26:21.000 | I don't understand the dynamics at work well enough to understand where things would go,
00:26:29.240 | but it would not be good.
00:26:32.080 | Let me turn attention now to what I do think is a serious, serious threat that needs to
00:26:38.000 | also be considered.
00:26:39.360 | And I would say it would be the increasing alliance or the increasing impact in the growth
00:26:48.640 | of China.
00:26:50.480 | And it would seem to me the biggest concern right now is of course Taiwan.
00:26:54.560 | The Chinese government has claimed the nation of Taiwan as being its own for a very long
00:27:00.240 | time.
00:27:01.240 | The nation of Taiwan bristles at that and says, "No, we're an independent nation."
00:27:05.760 | And you have a very uncomfortable argument going on on a world basis whether Taiwan is
00:27:11.360 | a country or not.
00:27:13.720 | China has so far held back from militarily forcing itself on Taiwan and invading Taiwan.
00:27:24.120 | But you have a very powerful nation, the nation of China, which has for years systematically
00:27:29.820 | been working on taking over and expanding its scope and expanding its influence.
00:27:36.520 | And many analysts have for quite a while expected China to sometime soon take action and go
00:27:45.200 | ahead and seek by force to invade Taiwan.
00:27:48.240 | I don't understand myself how these countries think that their military invasion is going
00:27:53.480 | to do any good.
00:27:55.480 | I don't understand how the Russian nation or how President Putin could think that his
00:28:02.440 | invasion of Ukraine is going to do any good if the Ukrainian people are not with him.
00:28:07.200 | But maybe I don't understand it.
00:28:09.560 | Similarly, if the nation of Taiwan wants to be a separate and independent nation, I don't
00:28:19.200 | understand how it would do the Chinese government any good to think that they could bring them
00:28:24.960 | in by force.
00:28:26.800 | But then again, throughout history it's happened, right?
00:28:29.280 | It happened in the United States when you had many states seek to secede from the federal
00:28:35.200 | government.
00:28:36.200 | The federal government went after them with force, forced them to not be able to secede,
00:28:41.040 | and it worked.
00:28:42.040 | It kept the nation together.
00:28:43.100 | So maybe I'm naive.
00:28:45.400 | But I think there's a very good reason right now, if you are in Taiwan, there's a very
00:28:50.640 | good reason right now to take a foreign vacation, to get out for a time.
00:28:55.720 | Now perhaps you are committed to fighting for the independence of Taiwan and you're
00:28:59.960 | going to take up arms against China, that's your prerogative to do so.
00:29:03.640 | But if you're not going to fight and take up arms against China, this would seem like
00:29:06.440 | a pretty good time to consider taking, to at least be watching sources of information
00:29:11.280 | very, very carefully, and even to consider taking some significant time off for a foreign
00:29:18.280 | vacation or send your children and your family for some time abroad while you stay involved
00:29:24.560 | in your business affairs, your job, etc.
00:29:26.400 | But keep a close eye on your sources of information to be able to get out.
00:29:30.640 | Remember, in any kind of dangerous event like this, you have to get out before everyone
00:29:36.440 | else decides they have to get out.
00:29:39.520 | You could get out of Ukraine pretty easily three weeks ago, a month ago.
00:29:44.060 | You could not get out easily two days ago, three days ago, even before the invasion.
00:29:48.680 | And you can't get out now.
00:29:50.580 | If you're a military-aged man, they have conscripted you into the national defense.
00:29:58.240 | And all respect to those who serve, but I don't intend to be myself conscripted into
00:30:03.360 | an army.
00:30:04.920 | That doesn't line up with my idea of freedom, nor do I think it's a particularly useful
00:30:09.060 | way to die in terms of impactful, as a soldier sent off to war by a president to be cannon
00:30:18.800 | fodder.
00:30:19.800 | Here's a gun, go shoot.
00:30:20.800 | That's not useful service.
00:30:22.680 | That's cannon fodder stuff.
00:30:25.160 | If you're going to be involved in a resistance movement, be involved in a resistance movement.
00:30:29.160 | Don't be stuck into some military unit, at least not a conventional unit.
00:30:33.080 | Be a long-range sniper or a sophisticated placer of improvised explosive devices.
00:30:41.800 | Do something that's going to be impactful, not just conscripted with everyone else, at
00:30:45.240 | least in my opinion.
00:30:51.160 | If China starts to use this event as cover for its own actions, things could get even
00:31:00.480 | more significant.
00:31:02.860 | And that could happen very, very quickly.
00:31:07.800 | Whether it is an invasion of Taiwan, whether it's something else, the point is that could
00:31:13.620 | happen very, very quickly.
00:31:18.080 | So what do you do?
00:31:19.080 | I've laid out some of my concerns.
00:31:22.320 | What do you do?
00:31:24.220 | As I see it, all of the standard advice that I have been giving for many years applies.
00:31:30.240 | And you have a couple of lines that you go down.
00:31:32.960 | Number one is you engage in basic preparedness.
00:31:36.720 | You make sure, in the old days it was called civil defense.
00:31:41.720 | Civil defense, the concept of civil defense is can you defend your nation against, can
00:31:47.100 | you empower civilians, non-military personnel in your nation to defend themselves effectively
00:31:56.800 | against foreign invasion?
00:31:58.880 | That was the classic concept of civil defense.
00:32:01.720 | A few years ago I heard an interview with a historian, a British historian, who was
00:32:06.760 | analyzing the effectiveness of the British civil defense programs.
00:32:09.960 | And I wish I could lay my hands on it for the facts and figures, but it was resoundingly
00:32:14.560 | effective.
00:32:15.560 | And so what was the basic concept of civil defense?
00:32:17.760 | Part of it was equipping people to be independent.
00:32:26.160 | Of course, part of it was actual protection, building fallout shelters, having community
00:32:30.160 | shelters, having community air raid drills, and then providing for the storage of supplies
00:32:35.540 | and defenses of the local community.
00:32:38.360 | So today we don't usually talk about this in the terms of civil defense.
00:32:42.000 | These are not words that we use much.
00:32:44.440 | We talk about it in terms of prepping or preparedness.
00:32:47.220 | But all of the basics still exist.
00:32:50.280 | The basics of making sure you have supplies of food, supplies of water, supplies of fuel,
00:32:57.440 | supplies of medical supplies.
00:33:00.200 | And if you think about it, there's what I always refer to as the commonality of disasters,
00:33:04.320 | that it's the basic preparedness that you'd make for an event of a pandemic, some kind
00:33:13.640 | of significant pandemic, all the way to cyber warfare.
00:33:17.440 | If you imagine the electricity going off to your house for a couple of weeks, what would
00:33:21.800 | you need to survive that?
00:33:24.360 | If you imagined that there was unrest in the streets, the stores were empty for some periods
00:33:30.140 | of weeks, what would you need to survive that?
00:33:32.120 | That's the basics of home preparedness.
00:33:35.000 | And so you would almost certainly survive the effects of a few weeks of the stores being
00:33:42.000 | empty, disruptions in fuel supplies.
00:33:44.760 | You would survive that.
00:33:45.760 | It's just a matter of in what comfort, in what peace does your family survive that?
00:33:52.560 | And again, just to connect the dots, how could that happen?
00:33:55.840 | Well, if there was some kind of cyber attack that disrupted on a broad scale, the supplies
00:34:03.180 | of fuel like happened with the Colonial Pipeline hack this last year.
00:34:09.800 | And if there were shortages of fuel like happened this past year, such to the point that the
00:34:15.160 | 18-wheelers couldn't run, things would be disrupted.
00:34:19.800 | If that were exacerbated by some kind of wide scale attack on telecommunications infrastructure,
00:34:27.920 | and there were sophisticated cyber attacks on large companies, large trucking companies,
00:34:34.640 | large distribution companies.
00:34:36.200 | I mean, consider, if the Israeli government can get a worm into the Iranian nuclear centrifuges
00:34:45.920 | that cause the whole thing to blow up, then I would imagine that the Russian government
00:34:50.600 | could pretty easily get a worm into the Walmart distribution center that wrecks their ordering
00:34:55.480 | system.
00:34:56.480 | Well, imagine what happens if ordering breaks down.
00:34:59.400 | I'll tell you what had happened, actually.
00:35:02.640 | A few days ago, I was in a local hardware store.
00:35:05.120 | I went into the hardware store and the computer system was down.
00:35:08.960 | And so all the point of sale, point of service terminals were not working.
00:35:14.120 | And so this particular hardware store, they had a backup plan, but everything was a mess.
00:35:21.920 | And they had lines of all the workers were gathered up front trying to do the work.
00:35:26.440 | And what they're doing is they were scanning, they were manually taking the SKU number from
00:35:31.600 | the barcode of the things that I was trying to buy, going on the company website to find
00:35:37.120 | the price, and then manually filling out sales tickets of that particular price so that they
00:35:43.840 | could, and creating these manual order receipts for people purchasing things.
00:35:48.840 | But it took what is, of course, usually a quick and effective process, and it made it
00:35:53.000 | take five times as long, six, eight times as long as it would usually take due to the
00:35:58.640 | simple fact that their system wasn't working for them to take, scan the code and have the
00:36:06.920 | computer do all the totals for you on your pricing system.
00:36:10.600 | Now I want you to imagine that on a more widespread basis with a company that is totally automated,
00:36:17.480 | such as Walmart, Home Depot, Lowe's, Kroger, Publix, any widespread store.
00:36:27.860 | If I were in charge of the cyber warfare department in the Russian military, and I knew that one
00:36:37.040 | of our longstanding enemies was the United States, I would have a list myself of the
00:36:41.680 | top 300 companies in every industry.
00:36:45.440 | And I'd have some kind of virus or worm ready to go to get into these company systems and
00:36:51.240 | blow them up, not literally, but just to drive chaos into their system.
00:36:58.920 | American stores and global stores, right?
00:37:00.640 | Doesn't matter whether it's Carrefour in France or Walmart in the United States or Intermarché
00:37:05.080 | elsewhere, it's all the same.
00:37:08.840 | Stores, everything is run on the just-in-time inventory system.
00:37:12.340 | That's what I've, remember for years, I've talked to you about this.
00:37:15.960 | And the just-in-time inventory system is an amazing, amazing invention of the modern age.
00:37:22.040 | It is extraordinarily efficient, keeps prices low, and it keeps more selection on the shelves
00:37:28.680 | than anything ever imagined in human history.
00:37:32.600 | The basic idea of the just-in-time inventory system is as a product goes out the scanner
00:37:39.040 | at the front door, then it should be coming back onto the loading dock in the back door.
00:37:43.880 | And the companies that use this have incredibly sophisticated systems that run it.
00:37:51.360 | And what has happened in the modern age is it's actually gotten better than before, where
00:37:55.320 | companies have gotten very, very good at dealing with supply line disruptions.
00:38:00.480 | There have been a few empty shelves that you've seen in your local area over the past couple
00:38:04.320 | of years, but for the most part, they haven't been significant.
00:38:07.480 | And if you look at the performance of companies like HEB in the Southwest, in light of a hurricane,
00:38:15.320 | their systems are amazing.
00:38:16.560 | Or Costco has done a great job with it.
00:38:18.400 | If there's a hurricane or an event coming, they can quickly send supplies.
00:38:22.960 | But all of that is built upon interconnected computer data transfer, artificial intelligent
00:38:32.800 | analysis of that data, et cetera.
00:38:35.660 | So imagine some kind of cyber warfare attack.
00:38:39.720 | Imagine that the Russian military inserts a worm into the Walmart ordering system.
00:38:46.880 | And imagine that it has the ability just simply to disrupt that inventory system.
00:38:58.020 | Everything could go haywire.
00:38:59.480 | And how quickly can you bring that stuff back online?
00:39:02.140 | It's not a dark ages kind of thing.
00:39:04.100 | It's not like we automatically go back to horses and buggies and single bottom plows
00:39:08.200 | and we're spending the next hundred years.
00:39:10.680 | No, but it's disruptive, potentially extremely disruptive.
00:39:16.880 | Again, I don't know the extent of this, but I guarantee, if you know that the intelligent
00:39:27.320 | services of the world, again, the example I like to use is when they got a worm into
00:39:34.480 | the Iranian centrifuges and made them melt down.
00:39:38.800 | You know that these countries are very, very sophisticated and very good and they have
00:39:42.720 | backup plans.
00:39:43.720 | And this cyber warfare is a powerful, powerful form of warfare that we've really not seen.
00:39:50.280 | We've never seen used.
00:39:51.960 | And yet we know that it is part of military planning.
00:39:57.120 | Now again, imagine something similar happening if we brought the nation of China into it.
00:40:04.880 | Imagine if you had a conflict where China goes ahead and invades Taiwan and now the
00:40:13.000 | United States is responding, supporting its ally, Taiwan, in an actual kinetic way and
00:40:18.720 | it unleashes something like cyber warfare.
00:40:21.920 | It's a very serious threat.
00:40:27.080 | I don't think it's actually even most important to talk about things like the nuclear threat.
00:40:34.320 | I think the cyber warfare threat is significant enough.
00:40:39.200 | But I want you to remember, because our memories are short, I want you to remember how quickly
00:40:45.720 | things can go from zero to panic.
00:40:49.120 | Do you remember a couple of years ago, President Trump was President of the United States and
00:40:54.200 | there was the banter back and forth with North Korea.
00:40:58.320 | And then one day there was an alert that went out by mistake on the Hawaii emergency warning
00:41:05.840 | system saying take cover, missiles inbound, something like that.
00:41:10.520 | I want you to remember, at no time in my life have I ever feared nuclear war.
00:41:16.760 | But a couple of years ago, when everyone was, the big conflict between North Korea and the
00:41:22.120 | United States, President Trump going back and forth with President Kim Jong-un, I think
00:41:29.280 | it's un, right?
00:41:32.760 | That was a serious event and it happened quickly.
00:41:36.960 | And you can see just how quickly things can emerge.
00:41:41.600 | So I was giving you solutions.
00:41:43.520 | Quick preparedness comes into place, making sure that you have the ability to do without
00:41:50.520 | external systems of support for some weeks, a month would be ideal.
00:41:55.840 | Of course, you can set higher targets, six months, a year is great, but it's a significantly
00:42:02.760 | higher level of commitment to go to that.
00:42:05.640 | But if today you started to prepare for, what would you do?
00:42:09.840 | Imagine this, right, if I flip off the breaker to your house and the water supply to your
00:42:15.480 | house, what would you do to live for a month without going to the store?
00:42:20.200 | And that's prepping, that's what you basically need.
00:42:22.840 | So how do you provide against that?
00:42:25.000 | Talked quite a lot about it, maybe do more, used to sell a course on it, maybe I will
00:42:29.080 | in the future, if you're interested let me know.
00:42:30.980 | But that's preparedness, there's plenty of information out there.
00:42:34.640 | And so you should engage in that.
00:42:36.680 | You should also be prepared to go someplace safe.
00:42:40.800 | If ideally you should have the ability, some kind of backup plans to go from where you
00:42:45.480 | are to another place that you think would be safer.
00:42:50.400 | There's some, this can be as simple as another town.
00:42:54.320 | Right now there are certain cities in Ukraine that are being targeted.
00:42:59.600 | If you can get out of those cities and go to other cities that are not currently being
00:43:03.360 | targeted you can improve your safety.
00:43:07.760 | Again I don't expect hot warfare in the United States, but local events can make certain
00:43:15.660 | places undesirable.
00:43:17.880 | Big cities can be especially flammable.
00:43:22.940 | So do you have a safe place to go?
00:43:25.680 | If money is no option I would just keep a vacation house, a country vacation house.
00:43:30.120 | It's a wonderful place to go, it's a backup place, it's out of the main city, that's a
00:43:34.600 | place that your family enjoys going.
00:43:36.840 | Why?
00:43:37.840 | Well again, one place can be threatened by certain events.
00:43:43.120 | This is where you do get to the area of what if there were actually a nuclear threat?
00:43:47.320 | Do you have the ability to go to a place that's less of a target?
00:43:51.320 | Although of course you could choose your housing decisions by picking a book like Joel Skousen's
00:43:59.080 | Strategic Relocation which puts nuclear target maps and you analyze your state and you analyze
00:44:04.440 | your city based upon likely nuclear targets and likely wind flows, etc.
00:44:11.840 | Most of us don't choose our housing like that.
00:44:14.640 | But if you have the ability to go from a big city you'll sleep better, to a country house,
00:44:18.800 | a country vacation house, you'll sleep better at night.
00:44:20.840 | If you have the ability to leave a country that was involved in a conflict and go to
00:44:25.200 | a country that's not involved in a conflict you'll sleep better at night.
00:44:30.120 | So this is where we get into kind of this dual fold scenario.
00:44:34.360 | One is preparing to be secure in your home, the other is preparing to leave a place that
00:44:41.320 | is bad and go to a place that is better.
00:44:45.600 | That leaving can be local, moving from a neighborhood that's threatened by floodwaters to a neighborhood
00:44:49.800 | that's not threatened by floodwaters, going inland 20 miles to get away from the significant
00:44:54.720 | risk of storm surge in a storm or wind damage.
00:44:59.440 | It can be regional, seeking to go from a region that's heavily affected by an event, region
00:45:03.800 | that's affected by an event to a region that's less affected, or it can be international,
00:45:07.120 | seeking to go from a country that is involved in some kind of international conflict to
00:45:11.360 | a neutral country, something like that.
00:45:14.640 | So more on that in the days to come.
00:45:18.600 | Just want to encourage you, be prepared.
00:45:21.840 | Be prepared as best you can with whatever that means to you.
00:45:26.080 | Because things have gotten significantly more perilous.
00:45:31.240 | I hope and pray that the perilous reality in which we live at the moment calms down
00:45:38.680 | and becomes less perilous.
00:45:40.720 | But I wanted to point out to you a couple of scenarios that are reasonable, realistic
00:45:46.160 | ways that things could get much more difficult in coming weeks and months.
00:45:52.920 | It's worth considering those scenarios.
00:45:55.080 | As I stated this morning, it's worth believing that they can happen, and then it's worth
00:46:00.560 | protecting yourself against them.
00:46:03.200 | I feel like my list of preparations is incomplete.
00:46:07.240 | For example, in your company, I think as best you're capable of, you should think about
00:46:12.440 | what would happen if your company suffered a cyber attack.
00:46:16.320 | What would happen if your information were leaked out?
00:46:18.760 | I had planned to do a show on information privacy.
00:46:21.720 | Maybe I'll do that soon.
00:46:22.840 | But in light of the Give, Send, Go hack, it's important to always think about information
00:46:27.680 | privacy.
00:46:28.980 | If you were being targeted by a hacker who's upset with your political contributions, or
00:46:34.480 | if you were being targeted by a cyber warfare unit in a foreign military, what could be
00:46:41.520 | made to leak out from the information?
00:46:46.720 | That's even without going to the level of paranoia of your smart devices or your connected
00:46:51.160 | house.
00:46:52.160 | Just what information would you not want to become public?
00:46:55.520 | Is that information protected as a matter of course?
00:46:58.440 | None of us are perfectly protected, but it's worth thinking about.
00:47:02.600 | It's worth considering.
00:47:05.000 | It's worth making sure that you have PDF backups of your bank records stored in an offline
00:47:10.800 | file.
00:47:11.800 | This is the classic conundrum.
00:47:14.600 | The things that you do to prepare for one thing often turn out to be not so great in
00:47:22.160 | another.
00:47:23.160 | An example would be having paper backups.
00:47:24.400 | Generally, I would advise you against receiving paper statements, paper investment statements,
00:47:30.360 | paper credit card statements, paper bank statements.
00:47:33.280 | I advise you against receiving those things because they pose, in today's world, a significant
00:47:39.520 | risk of identity theft.
00:47:41.960 | A mailbox pirate comes along and gains access to the information.
00:47:46.720 | The paper itself is often not well secured.
00:47:49.280 | Somebody can break into your home safe or your desk drawer and often have access to
00:47:54.040 | your private information.
00:47:55.760 | I generally believe that it is better for you to have your financial records stored
00:48:02.560 | on the encrypted website with a secure login for you, and then you can go and get them
00:48:08.120 | when you need them.
00:48:09.120 | The problem is that most of us are lazy about going and getting those records.
00:48:14.400 | If Vanguard or Fidelity suffered a hack, I just want you to imagine, right?
00:48:20.920 | Imagine the chaos that could be strewn across the world and across American society if Vanguard
00:48:28.560 | were targeted by the Russian military with a sophisticated hack, a sophisticated worm
00:48:36.440 | or some kind of malicious code that is installed in it.
00:48:40.880 | Vanguard, I'm sure, worked very hard to be protected from that, but they're not ready
00:48:45.040 | for an attack from a foreign nation state actor.
00:48:51.480 | I spend enough time listening to talks by hackers, red team planners.
00:48:59.440 | I spend enough time listening to them to know that a determined adversary can get into any
00:49:08.560 | organization, any computer system, etc.
00:49:11.840 | I just have a hard time believing that if I were in charge of a cybersecurity department
00:49:19.000 | at a large foreign nation state and I had plans of how I'd disrupt the United States,
00:49:26.520 | again, I don't believe that I could be successful attacking the United States with an invasion
00:49:33.400 | force.
00:49:34.400 | I don't think that I would even probably be successful attacking the United States with
00:49:38.400 | an intercontinental ballistic missile, conventional or nuclear.
00:49:42.080 | That would just not be good and there would be a disproportionate response.
00:49:46.320 | But I do think I could be very successful at completely disrupting the United States
00:49:50.840 | with a cyber attack.
00:49:53.600 | And so if I were in charge of a cybersecurity or cyber warfare environment, I would have
00:50:00.640 | a list of the top 10 banks.
00:50:02.520 | Bank of America, Chase Bank, Wells Fargo, just go down the list of the top 10 banks
00:50:08.240 | and imagine a sophisticated attack against those top 10 banks.
00:50:13.480 | I would include the top 10 investment companies, Vanguard, Fidelity, even the little ones,
00:50:22.040 | like how to mess up e-trade, Robinhood, just go down the list.
00:50:26.440 | I would have targets and plans and software prepared for attacking those entities.
00:50:31.880 | And so again, imagine that the files in the computer systems are completely disabled of
00:50:39.720 | these banking and investment companies.
00:50:41.920 | Think about the havoc that that would wreak on the US society, on the US stock market,
00:50:49.480 | on the US financial system.
00:50:53.880 | It would be very, very serious.
00:50:57.000 | So I don't know necessarily that having offline copies of your financial data is necessarily
00:51:04.120 | going to help you in an event like that, but it probably can't hurt.
00:51:07.840 | So things like that.
00:51:09.920 | And again, I just go back to the solutions that are realistic.
00:51:16.680 | All day I've been tweeting pictures of lines at ATMs in Ukraine, people trying to get their
00:51:22.360 | money out of the bank.
00:51:25.320 | Make sure you have cash.
00:51:27.460 | Make sure that you have a plan to...
00:51:28.760 | I'm going to stop there.
00:51:30.520 | I go over the solutions nonstop.
00:51:32.680 | So just wanted to bring you some sobering commentary on what could happen from here.
00:51:39.000 | And we hope that it will not happen, but things have changed dramatically in the last 18 to
00:51:45.280 | 24 hours.
00:51:46.520 | Depending on what happens in the coming days, things could change more dramatically indeed.
00:51:52.480 | And wasn't it...
00:51:57.040 | I think there was Lenin had some kind of quote that was something like, "Sometimes you can
00:52:03.280 | go decades with only days happening and sometimes you can live decades in a couple of days."
00:52:08.680 | And so it's very possible that in the days to come that would be the case.
00:52:13.360 | Be thoughtful and may God be with you and your family as we pray for and support the
00:52:18.880 | people being victimized in Ukraine and elsewhere right now.
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