STRATFOR has just published an interesting piece that is available free to non-subscribers on their website (Read the online version). It covers some interesting points that match with some of our earlier analysis.
Here are a few of the key quotes:
The J-20 Test's Timing
"Perhaps more interesting than the test was its timing, with its associated political implications…Gates asked Hu about the test when the two met in Beijing. According to some media reports citing American officials present at the meeting, Hu appeared surprised by the question and somewhat perplexed by the details of the test — the implication being that Hu was unaware of the test and that the Chinese military may have acted out of turn. Gates told reporters that Hu had assured him the timing was coincidental. After being asked for his own thoughts regarding the relationship between the military and the political leadership in China after his meetings with Chinese civilian and defense leaders, Gates noted that he had become concerned about that relationship over time…Although Gates did not say the Chinese military tested the J-20 without political clearance from Hu, the idea was certainly suggested by the media coverage and Gates' response."
The STRATFOR article goes on to suggest that Hu had to have been aware of the Stealth Fighter test. Either way, it shows that the Chinese Military has a very strong position in the country either with or without the involvement of civilian leadership. They were willing to test weapons openly in advance of a State visit to the U.S.
The show of strength with a Stealth Fighter is an example of a traditional military approach. Yet, it is well-documented that the Chinese have an equally robust Unrestricted/Irregular Warfare strategy. This approach requires that efforts be undertaken covertly for maximum impact. The goal is to weaken your enemies situation without being blamed. We've already established that Financial Warfare is part of Unrestricted Warfare according to Chinese military doctrine. Remember the definition from the book:
"Financial warfare [in which a country is subjugated without a drop of blood being spilled] means entering and subverting banking and stock markets and manipulating the value of a targeted currency."
According to the doctrine, new concept weapons should be used against enemies without them even aware that you are using them. Quoting Unrestricted Warfare (CIA/DIA translation):
"… the Americans have not been able to get their act together in this area. This is because proposing a new concept of weapons does not rely on the springboard of new (military) technology, it just demands lucid and decisive thinking. However, this is not a strong point of the Americans who are slaves to technology in their thinking… As we see it, a single man-made stock market crash, a single computer virus invasion, or a single rumor or scandal that results in a fluctuation in the enemy country's exchange rates…can all be included in the ranks of new-concept weapons."
Read that quote carefully. Read it again. All experts agree that the Chinese military has a sophisticated cyber-warfare effort. There is no doubt that they continue to attempt to hack every strategic system on a regular basis. If that is true, and it is, why is it so hard to imagine a willingness to crash our stock market (which we have defined as Phase Two) or try to manipulate our currency (defined as Phase Three)?
We have already demonstrated that George Soros believes that a "bear raid" was behind the 2008 collapse. Our research has gone into excruciating detail in describing how that could have happened (including the specific mechanisms) without leaving fingerprints. We know that the PLA has studied Soros and therefore understands the mechanisms. We have shown that the PLA has been busy testing weapons that until last week our defense intelligence establishment didn't believe could exist. And, we have the military doctrine paper from 1999 that demonstrates that the military intended to create new weapons including how to crash our stock market and manipulate our currency. And they intended to do it while Americans remained ignorant and solely focused on old-concept weapons.
Was the May 6th Flash Crash a Chinese Military Test?
Given all that we have just explained, it is impossible to rule out the possibility that a direct attack on our stock market has or could take place, perhaps without fingerprints. Our markets are extremely vulnerable because more than 70% of trading is now done via computer algorithms, naked access, or via dark pools where there is no transparency. There is no doubt that hedge funds, offshore trading, and computer networks represent new-concept weapons in Chinese thinking. BARRON's had a report dated September 11, 2010 that confirmed at least the possibility that such a weapons test could happen:
How Foreigners Could Disrupt U.S. Markets
By JIM MCTAGUE
SATURDAY, SEPTEMBER 11, 2010
"An informal meeting of members of the House Committee on Homeland Security heard some scary testimony related to the May 6 flash crash.
MALEVOLENT FOREIGN TRADERS PROBABLY did not trigger the stock market's May 6 flash crash, which saw the Dow Jones Industrial Average within five minutes break all records for intraday nose dives. But witnesses before an informal convocation of the House Committee on Homeland Security on July 20 were united in their conviction that the nation's 10 or so stock exchanges and 50-plus related trading venues are vulnerable to attacks from traders overseas.
This is a frightening revelation…Industry witness…are critical of many strategies employed by so-called high-frequency traders, who use algorithmic programs to simultaneously discover short-term pricing inefficiencies and other arbitrage opportunities in virtually every market.
Foreigners theoretically could gain "naked access" to an exchange through the sponsorship of a brokerage firm…The sub-custodian chain can bury the identity of high-frequency traders in Eastern Europe and elsewhere who raise serious regulatory concerns."
It is time to get very serious about the Economic Warfare threat. The Chinese are right. Americans are ignorant of new concept weapons and their impact. This Blog, now reaching thought leaders across the country, and personal efforts of the past two years are designed to provide a rapid education before it is too late.
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