A Pentagon-sponsored report warns that the United States faces new threats from mass destruction weapons in the form of cyber, electronic and financial attacks, in addition to more well-known dangers from nuclear, chemical and biological WMD arms.
“In addition to the prolific conventional [weapons of mass destruction] threats posed by a vast network of state and non-state actors, the U.S. must also contend with emerging threats that are not conventionally recognized as WMD,” said the report produced last month for the office of the Undersecretary of Defense for Intelligence.
“Very few of America’s adversaries will attempt to challenge the unmatched strength of the U.S. military in a traditional conflict, but they may employ alternative asymmetric approaches.
“It is therefore necessary to consider emergent, nontraditional threats, such as cyber, electromagnetic pulse (EMP), and economic attacks, in a comprehensive discussion of WMD threats.”
On financial warfare, the report mentions the 1999 Chinese military book, “Unrestricted Warfare,” which advocates that China’s military utilize stock-market crashes, computer viruses and currency manipulations.
# You can read the FBIS translation of the Chinese military book, “Unrestricted Warfare,” online
# Here: http://www.cryptome.org/cuw.htm
“Essentially, any threat to the U.S. economy is a threat to the country as a whole, and the potential impact of an economic attack is considered increasingly significant,” the report said.
The new Pentagon report appears to build on one produced for the Pentagon in 2009 by financial consultant Kevin Freeman, who stated that the United States’ 2008 financial crash may have been deliberate sabotage by terrorists or foreign states.
That study was criticized by senior Obama administration officials, including the Pentagon’s special operations policymaker, Michael Vickers, who is currently undersecretary of defense for intelligence. U.S. officials said Mr. Vickers blocked further study into possible financial warfare behind the economic crisis. Mr. Freeman wrote a book on the issue called “Secret Weapon.”
# Some stuff about the book; "Secret Weapons": http://secretweapon.org/ and
# used copies seem to be selling starting at $7.
The new Pentagon report said the May 6, 2010 “flash crash” when markets fell by 10 percent “may have been caused by an economic attack by one or a combination of methods,” including the manipulation of computer algorithms that control trading or exchange traded funds that allow traders to short sell mass quantities of stock quickly and anonymously. It also could have been the result of covert currency-manipulation by the holder of a significant U.S. debt — such as China — designed to intentionally weaken the value of the dollar by preventing the United States from selling its debt to others.
On cyber-WMD, the report said that in an age when 2 billion people use the Internet, “a coordinated cyberattack could compromise national security, shut down commerce and destroy the U.S. power grid.”
According to the report, China currently has some 180,000 cyberspies; and, during attacks in 2007 and 2009, they hacked into Pentagon networks and “stole several terabytes of data, including the blueprints for U.S. F-35 and F-32 joint-strike fighter planes, essentially compromising America’s defense technology.”
Russia conducted cyberattacks in 2008 against the Republic of Georgia prior to its military strikes. The cyberattacks disabled Georgia’s national network “effectively eliminating the chance to mount an appropriate response to the attack.”
Another emerging WMD threat is an electromagnetic pulse, or EMP, attack — the up to 1,000-mile-wide disruption of all electronics produced by a nuclear burst or a high-tech EMP weapon.
“The detonation of an EMP weapon would cause the disruption or destruction of electrical-based systems, which would lead to chaos by impoverishing or neutralizing a society, rather than annihilating it outright,” the report said.
The United States’ heavy reliance on electronics means an EMP attack would be devastating.
The report concludes that economic vitality is key to U.S. national security; but, with the global economy, the country is facing significant vulnerabilities.
The report urged the U.S. government to develop a national strategy and capability to defend the U.S. economy from every form of economic attack.
The September report, “Weapons of Mass Destruction: An Evolving Threat,” was produced by contractor Universal Strategy Group, Inc., for the undersecretary of defense for intelligence and its Combating Terrorism Support Office.
# I'm not finding the report online.
Mr. Freeman, the financial security specialist, took issue with the report. He said that former Treasury Secretary Henry Paulson revealed in a 2010 book that Russia dumped American bonds in 2008 and urged the Chinese to do the same.
“The Chinese did not at that time but this does not mean they won’t,” Mr. Freeman said in an email.
He said the Pentagon report was “naive” and provided a “politically correct answer” that failed to address what he said were very real risks from Chinese financial warfare.
A number of scenarios exist that would involve China's government taking coercive action to dump or threaten to sell off U.S. bonds, Mr. Freeman said.
“If they perceive us as wounded, they might be willing to suffer in the short term to accomplish larger goals,” he said.
Also, the report’s assertion that dumping U.S. securities would be inflicting harm on China “assumes a domestic economic stability [in China] that may not exist ,” he said. “The situation is much more complex than that."