North Korea Thread: DPRK Launching Missiles With New ICBM
- Thread starter newarkhiphop
- Start date
Red Shield
Global Domination
Financial Warfare and North Korea
On Wednesday, April 5, 2017, I had the honor of conducting a seminar on financial warfare for a class from the U.S. Army War College.
The War College is based in Carlisle, Pennsylvania, but my seminar was conducted in New York City as part of a visit to the city by the class.
The U.S. Army War College is not a typical educational institution. Courses are offered at the graduate level only. There is no undergraduate curriculum. Students are typically midcareer officers: captains, majors and lieutenant colonels who are preparing for senior leadership positions.
My class was even more elite than typical War College students. I taught a group of about 15 officers as part of the Advanced Strategic Art Program. These students are the best and brightest in the military who are being specially trained in strategic thinking and planning.
The seminar students included officers from the Army, Marines, Navy and Air Force. Some had military postings, while others were on secondment to the Department of Homeland Security, U.S. Border Patrol, National Security Agency and the Defense Intelligence Agency.
The students were all heading to new assignments after completing their class work at the War College. When the new assignments were disclosed, some just muttered “Hawaii” in muted tones. They could not be more specific, but I took “Hawaii” to mean the Hawaii Cryptologic Center, HCC, on Oahu, which is the NSA’s super-secret listening post for signals intelligence from Asia.
In five or 10 years, you can expect members of this class to achieve a general’s rank and to hold positions at the highest levels of the Defense Department, National Security Council and agencies in the Intelligence Community such as the CIA or NSA.
As I mentioned above, the subject of my seminar was “Financial Warfare.” The fact that the dean and program leaders had included financial warfare on the curriculum of a strategic arts program shows how financial weapons have penetrated the battlespace.
Future leaders of the U.S. military will not be considered versed in all of the arts of war unless they have had at least some exposure to financial weapons, tactics and strategy.
My seminar plan covered two hours, of which the first hour would be formal presentation and the second hour was reserved for discussion. I encouraged the class to ask questions or interject in the first hour as well. I warned them I was perfectly capable of speaking for several hours without pausing for breath, and if they did not want to hear me go on for that long, it was in their interests to start the dialogue as soon as possible.
The students were only too happy to oblige. The questions began within minutes of the start of the presentation and kept coming. That was fine with me. That kind of interaction is the difference between a true seminar and a lecture.
The questions were among the most thoughtful and technically proficient I have ever been asked. It was interesting to me that a military audience asked more sophisticated financial questions than the typical audience of investors and economists that I routinely address.
It was quite a positive testament to the preparedness of our financial war fighters among the senior officer ranks.
My presentation began by defining financial warfare as the effort to:
Degrade and defeat the capabilities of adversaries by nonkinetic means through sanctions, capital markets, banking systems, exchanges, clearinghouses and payments channels for cash, stocks, bonds, deposits, commodities, foreign exchange and derivatives.
I unpacked this definition by explaining the difference between the banking system (mostly about deposits, cash and money transfers) and capital markets (having to do with securities underwriting and trading and derivatives).
I also explained the difference between exchanges and clearinghouses. In a future crisis, the role of clearinghouses may prove crucial both as a means to untangle the web of cross-obligations, and as a vulnerable node that could be the target of an enemy attack.
Other topics covered in the seminar included financial sanctions, the role of gold in transferring wealth while avoiding digital payments systems in order to escape detection and interdiction and an endgame that could lead to the demise of the U.S. dollar as the benchmark global reserve currency.
One topic of discussion was North Korea, since it’s very much in the news because of its nuclear program.
North Korea is moving as fast as it can, putting all its resources into that program. But it’s a very poor country, and its leadership would rather let the people starve than deprive the military of the money they need.
So North Korea is trying to scrape together any hard currency it can. How?
Largely through illegal activities, like weapon sales to Iran. Think of North Korea as a crime family running multiple rackets, whether it’s illegal arms sales, garbage collection, gambling, drugs or other rackets.
North Korea also runs a large counterfeiting racket. For years North Korea counterfeited massive amounts of high-quality counterfeit bills called “supernotes” — fake U.S. $50 and $100 bills so convincing only a trained expert could distinguish them from the genuine article.
Incidentally, I should mention that it looks like North Korea was the perpetrator of last year’s $81 million theft from the country of Bangladesh.
It was a strange story. Bangladesh, a poor country, had their reserves, their national savings basically, on deposit at the Federal Reserve Bank in New York. And $81 million dollars went missing in a cyber heist. And now the evidence points to North Korea.
How has North Korea been getting paid for its illegal weapon shipments to, say, Iran? And how does it pay for its imports? How does North Korea conduct these transactions?
The U.S. has placed North Korea under financial sanctions to lock it out of the international banking system. But there are ways around them.
For example, North Korea can use Chinese and Russian banks as cover.
Through what’s called correspondent banking relationships, North Korea could have an account at a Chinese or maybe Russian bank. And since that Chinese or Russian can do business around the world, it can just act as an agent for the North Korean bank.
The U.S. can impose sanctions on Chinese and Russian banks doing business in the U.S. that facilitate North Korean payments. That’s an effective form of sanction, but it risks escalating tensions with Russia and China.
But importantly, North Korea also makes many transactions with physical gold.
I’ve talked before about what I call the Axis of Gold, including Russia, China, Iran, and Turkey. So I would also include North Korea in that list, although as a junior member.
If you want to buy oil in the open market you pay in dollars. But if you want to ship ballistic missile components or equipment to enrich uranium, you might want to use gold. And a lot of this type of business is being done in gold because it’s physical, not digital. It can’t be hacked or traced. Unlike digital money in bank accounts, it can’t be frozen. You just put it on a plane or ship and send it to its destination.
So there’s a substantial gold trade going on behind the scenes. That’s one reason, but not the only reason of course, why these countries are acquiring so much gold.
I have contacts in the national security industry community who have, in their own roundabout way, been able to confirm that to me, so it’s very clear that’s what’s happening.
This is the type of information you don’t see in the headlines. This is very granular, but it’s all going on behind the scenes.
In the end, financial warfare is another important realm of global politics that cannot be ignored.
Regards,
Jim Rickards
On Wednesday, April 5, 2017, I had the honor of conducting a seminar on financial warfare for a class from the U.S. Army War College.
The War College is based in Carlisle, Pennsylvania, but my seminar was conducted in New York City as part of a visit to the city by the class.
The U.S. Army War College is not a typical educational institution. Courses are offered at the graduate level only. There is no undergraduate curriculum. Students are typically midcareer officers: captains, majors and lieutenant colonels who are preparing for senior leadership positions.
My class was even more elite than typical War College students. I taught a group of about 15 officers as part of the Advanced Strategic Art Program. These students are the best and brightest in the military who are being specially trained in strategic thinking and planning.
The seminar students included officers from the Army, Marines, Navy and Air Force. Some had military postings, while others were on secondment to the Department of Homeland Security, U.S. Border Patrol, National Security Agency and the Defense Intelligence Agency.
The students were all heading to new assignments after completing their class work at the War College. When the new assignments were disclosed, some just muttered “Hawaii” in muted tones. They could not be more specific, but I took “Hawaii” to mean the Hawaii Cryptologic Center, HCC, on Oahu, which is the NSA’s super-secret listening post for signals intelligence from Asia.
In five or 10 years, you can expect members of this class to achieve a general’s rank and to hold positions at the highest levels of the Defense Department, National Security Council and agencies in the Intelligence Community such as the CIA or NSA.
As I mentioned above, the subject of my seminar was “Financial Warfare.” The fact that the dean and program leaders had included financial warfare on the curriculum of a strategic arts program shows how financial weapons have penetrated the battlespace.
Future leaders of the U.S. military will not be considered versed in all of the arts of war unless they have had at least some exposure to financial weapons, tactics and strategy.
My seminar plan covered two hours, of which the first hour would be formal presentation and the second hour was reserved for discussion. I encouraged the class to ask questions or interject in the first hour as well. I warned them I was perfectly capable of speaking for several hours without pausing for breath, and if they did not want to hear me go on for that long, it was in their interests to start the dialogue as soon as possible.
The students were only too happy to oblige. The questions began within minutes of the start of the presentation and kept coming. That was fine with me. That kind of interaction is the difference between a true seminar and a lecture.
The questions were among the most thoughtful and technically proficient I have ever been asked. It was interesting to me that a military audience asked more sophisticated financial questions than the typical audience of investors and economists that I routinely address.
It was quite a positive testament to the preparedness of our financial war fighters among the senior officer ranks.
My presentation began by defining financial warfare as the effort to:
Degrade and defeat the capabilities of adversaries by nonkinetic means through sanctions, capital markets, banking systems, exchanges, clearinghouses and payments channels for cash, stocks, bonds, deposits, commodities, foreign exchange and derivatives.
I unpacked this definition by explaining the difference between the banking system (mostly about deposits, cash and money transfers) and capital markets (having to do with securities underwriting and trading and derivatives).
I also explained the difference between exchanges and clearinghouses. In a future crisis, the role of clearinghouses may prove crucial both as a means to untangle the web of cross-obligations, and as a vulnerable node that could be the target of an enemy attack.
Other topics covered in the seminar included financial sanctions, the role of gold in transferring wealth while avoiding digital payments systems in order to escape detection and interdiction and an endgame that could lead to the demise of the U.S. dollar as the benchmark global reserve currency.
One topic of discussion was North Korea, since it’s very much in the news because of its nuclear program.
North Korea is moving as fast as it can, putting all its resources into that program. But it’s a very poor country, and its leadership would rather let the people starve than deprive the military of the money they need.
So North Korea is trying to scrape together any hard currency it can. How?
Largely through illegal activities, like weapon sales to Iran. Think of North Korea as a crime family running multiple rackets, whether it’s illegal arms sales, garbage collection, gambling, drugs or other rackets.
North Korea also runs a large counterfeiting racket. For years North Korea counterfeited massive amounts of high-quality counterfeit bills called “supernotes” — fake U.S. $50 and $100 bills so convincing only a trained expert could distinguish them from the genuine article.
Incidentally, I should mention that it looks like North Korea was the perpetrator of last year’s $81 million theft from the country of Bangladesh.
It was a strange story. Bangladesh, a poor country, had their reserves, their national savings basically, on deposit at the Federal Reserve Bank in New York. And $81 million dollars went missing in a cyber heist. And now the evidence points to North Korea.
How has North Korea been getting paid for its illegal weapon shipments to, say, Iran? And how does it pay for its imports? How does North Korea conduct these transactions?
The U.S. has placed North Korea under financial sanctions to lock it out of the international banking system. But there are ways around them.
For example, North Korea can use Chinese and Russian banks as cover.
Through what’s called correspondent banking relationships, North Korea could have an account at a Chinese or maybe Russian bank. And since that Chinese or Russian can do business around the world, it can just act as an agent for the North Korean bank.
The U.S. can impose sanctions on Chinese and Russian banks doing business in the U.S. that facilitate North Korean payments. That’s an effective form of sanction, but it risks escalating tensions with Russia and China.
But importantly, North Korea also makes many transactions with physical gold.
I’ve talked before about what I call the Axis of Gold, including Russia, China, Iran, and Turkey. So I would also include North Korea in that list, although as a junior member.
If you want to buy oil in the open market you pay in dollars. But if you want to ship ballistic missile components or equipment to enrich uranium, you might want to use gold. And a lot of this type of business is being done in gold because it’s physical, not digital. It can’t be hacked or traced. Unlike digital money in bank accounts, it can’t be frozen. You just put it on a plane or ship and send it to its destination.
So there’s a substantial gold trade going on behind the scenes. That’s one reason, but not the only reason of course, why these countries are acquiring so much gold.
I have contacts in the national security industry community who have, in their own roundabout way, been able to confirm that to me, so it’s very clear that’s what’s happening.
This is the type of information you don’t see in the headlines. This is very granular, but it’s all going on behind the scenes.
In the end, financial warfare is another important realm of global politics that cannot be ignored.
Regards,
Jim Rickards
MoA - Why North Korea Needs Nukes - And How To End That
Media say,
the United States may
or may not
kill a number of North Koreans
for this or that
or no good reason
but call North Korea
'the volatile and unpredictable regime'
Now consider what the U.S. media don't tell you about Korea:
BEIJING, March 8 (Xinhua) -- China proposed "double suspension" to defuse the looming crisis on the Korean Peninsula, Chinese Foreign Minister Wang Yi said Wednesday.
"As a first step, the Democratic People's Republic of Korea (DPRK) may suspend its nuclear and missile activities in exchange for the suspension of large-scale U.S.-Republic of Korea (ROK) military exercises," Wang told a press conference on the sidelines of the annual session of the National People's Congress.
...
Wang said the nuclear issue on the Korean Peninsula is mainly between the DPRK and the United States, but China, as a next-door neighbor with a lips-and-teeth relationship with the Peninsula, is indispensable to the resolution of the issue.
FM Wang, 'the lips', undoubtedly transmitted an authorized message from North Korea: "The offer is (still) on the table and China supports it."
North Korea has made the very same offer in January 2015. The Obama administration rejected it. North Korea repeated the offer in April 2016 and the Obama administration rejected it again. This March the Chinese government conveyed and supported the long-standing North Korean offer. The U.S. government, now under the Trump administration, immediately rejected it again. The offer, made and rejected three years in a row, is sensible. Its rejection only led to a bigger nuclear arsenal and to more missiles with longer reach that will eventually be able to reach the United States.
North Korea is understandably nervous each and every time the U.S. and South Korea launch their very large yearly maneuvers and openly train for invading North Korea and for killing its government and people. The maneuvers have large negative impacts on North Korea's economy.
North Korea justifies its nuclear program as the economically optimal way to respond to these maneuvers.
Each time the U.S. and South Korea launch their very large maneuvers, the North Korean conscription army (1.2 million strong) has to go into a high state of defense readiness. Large maneuvers are a classic starting point of military attacks. The U.S.-South Korean maneuvers are (intentionally) held during the planting (April/May) or harvesting (August) season for rice when North Korea needs each and every hand in its few arable areas. Only 17% of the northern landmass is usable for agriculture and the climate in not favorable. The cropping season is short.
The southern maneuvers directly threaten the nutritional self-sufficiency of North Korea. In the later 1990s they were one of the reasons that led to a severe famine.
Its nuclear deterrent allows North Korea to reduce its conventional military readiness especially during the all important agricultural seasons. Labor withheld from the fields and elsewhere out of military necessity can go back to work. This is the official North Korean policy known as 'byungjin'.
A guaranteed end of the yearly U.S. maneuvers would allow North Korea to lower its conventional defenses without relying on nukes. The link between the U.S. maneuvers and the nuclear deterrent North Korea is making in its repeated offer is a direct and logical connection.
The North Korean head of state Kim Jong-un has officially announced a no-first-use policy for its nuclear capabilities:
"As a responsible nuclear weapons state, our republic will not use a nuclear weapon unless its sovereignty is encroached upon by any aggressive hostile forces with nukes," Kim told the Workers' Party of Korea congress in Pyongyang. Kim added that the North "will faithfully fulfill its obligation for non-proliferation and strive for the global denuclearization."
During the congress, as elsewhere, Kim Jong Un also emphasized (transcript, pdf, v. slow) the above described connection between nuclear armament and economic development. Summarized:
After decades of emphasizing military strength under his father, Korea is moving toward Kim's “byongjin” — a two-pronged approach aimed at enhancing nuclear might while improving living conditions.
The byongjin strategy, despised by the Obama administration, has been successful:
What are the sources of [North Korea's economic] growth? One explanation might be that less is now spent on the conventional military sector, while nuclear development at this stage is cheaper—it may only cost 2 to 3 percent of GNP, according to some estimates. Theoretically, byungjin is more “economy friendly” than the previous “songun” or military-first policy which supposedly concentrated resources on the military.
To understand why North Korea fears U.S. aggressiveness consider the utter devastation caused mostly by the U.S. during the Korea War:
via Jeffrey Kaye - bigger
Imperial Japan occupied Korea from 1905 to 1945 and tried to assimilate it. A nominal communist resistance under Kim Il-sung fought against the occupation. After the Japanese surrender in 1945 the U.S. controlled and occupied the mostly agricultural parts of Korea below the arbitrarily chosen 38th parallel line. The allied Soviet Union controlled the industrialized part above the line. They had agreed on a short trusteeship of a united and independent country. In the upcoming cold war the U.S. retracted on the agreement and in 1948 installed a South Korean proxy dictatorship under Syngman Rhee. This manifested an artificial border the Koreans had not asked for and did not want. Kim Il-sung still commanded a strong resistance movement in the south and hoped to reunite the country. The Korea War ensued. It utterly destroyed the country. All of Korea was severely effected but especially the industrialized north which lost about a third of its population and all of its reasonably well developed infrastructure - roads, factories and nearly all of its cities.
Every Korean family was effected. Ancestor worship is deeply embedded in the Korean psyche and its collectivist culture. No one has forgotten the near genocide and no one in Korea, north or south, wants to repeat the experience.
The country would reunite if China and the U.S. (and Russia) could agree upon its neutrality. That will not happen anytime soon. But the continued danger of an "accidental" war in Korea would be much diminished if the U.S. would accept the North Korean offer: an end to aggressive behavior like threatening maneuvers against the north in exchange for a verified stop of the northern nuclear and missile programs. North Korea has to insist on this condition out of sheer economic necessity.
The U.S. government and the "western" media hide the rationality of the northern offer behind the propaganda phantasm of "the volatile and unpredictable regime".
But it is not Korea, neither north nor south, that is the "volatile and unpredictable" entity here.
You're a great poster but I'm Korean and let me just say this is utter complete bull shyt.
Red Shield
Global Domination
byongjin
Always figured nukes as a deterrent.. but I did not know that about their growing season. Cold game..
the cac mamba
Veteran
the irony of this entire line
What is the problem here?
In your own words, tell me what is wrong with this?
I want North Korea to fail. Miserably. Quickly. And with as little damage to their neighbors as possible.
ill
Superstar
Whats your family think of the current situation? Do you have any family back in the homeland - how are they dealing with this?
ill
Superstar
They're already a failed state. Relax.
88m3
Fast Money & Foreign Objects
You right!
88m3
Fast Money & Foreign Objects
this is what happens when you allow yourself to get astroturfed by blogs all day
ORDER_66
Demon Time coming 2024
Anticipating for that breaking news about missile(s) being launched.
Me too... South Korea is so damned beautiful...
