The ‘underwear bomber’ incident on Christmas Day on the NWA flight landing in Detroit should serve as a wake-up call for us all. All the security measures put in place by governments supposedly to protect us against terrorists are not working. The government’s knee-jerk response is to increase security checks. Both these facts are of serious concern to our security, privacy and freedom. Allow us to explain…
Here at Q Wealth our intention is to bring you the common sense analysis behind the headlines. We base this analysis on our extensive experience and our good friends in both the ‘civil liberties’ and ‘intelligence’ communities. Bearing in mind that few facts of the case are known as yet and we are relying on TV reports for our information, here is our initial analysis – first of the actual event, then of the consequences. Warning: It is scary stuff.
First the good news: no-one was badly hurt. The underwear bomber burned his butt. Initial reports suggest he did not have a bomb, but rather some powder sewn into his underwear that he tried to inject with a liquid to cause a fire. Fortunately aircraft interiors are designed to be flame resistant, cabin crew are suitably trained and equipped with fire extinguishers, and one brave passenger physically restrained the terrorist. These three basic, sensible precautions saved the passengers and crew on that flight and the people on the ground below.
Whatever one may think of multi-billion dollar global spying operations and intrusive airport security measures, if they worked it would at least be a strong argument in favor of them. But this incident shows they do not work. The suspect’s father, a prominent banker, had taken the extraordinary step of reporting his suspicions about his son to the US embassy. The UK had refused to renew the suspect’s student visa because of his apparent terrorist connections. Yet here he was in possession of a valid US visa, travelling in his own name, allowed on board a flight to the US.
Airport security in Amsterdam, where the suspect boarded, is as ‘good’ as anywhere else. This writer passed through one of the new full body scanners there nearly a year ago. These are the super-duper new machines that are due to be rolled out over the USA next year. On my particular flight, the business class passengers were being checked by the new machine, while economy class passengers were being checked using the older method.
Nobody informed us what the machine was so I guess the majority of business class passengers had no idea they were having these photos taken. But a properly trained terrorist, especially one with a mechanic engineering degree like this one, who had something sewn into his underwear would surely have recognized the machine and snuck into the other line.
We are civil libertarians but we certainly recognize the need for airport security. The normal airport security that was in place in Europe (but not the US) in 2001 did not particularly bother passengers. It involved a quick scan of the hand-luggage and passing through a metal detector, as well as routine scanning of all checked baggage – measures which would very likely have prevented the 9/11 hijackers. I can also see the logic behind separating laptops at the scanner.
But none of the rules introduced since (restrictions on liquid, taking shoes off etc) make any sense. Does anyone think for a moment that a terrorist is incapable of forging a prescription from a Nigerian doctor that would allow him to take a syringe and more liquid that normal on board a plane? Depriving us of blankets and pillows or restricting hand luggage is just about inconveniencing passengers for absolutely zero security benefit.
Frankly, there is nothing more we can do in terms of physical airport security. It is impossible to introduce a fool-proof system. If a person is smart and determined enough they will be able to carry dangerous items past poorly-paid security guards – people who are taught to function like robots by reacting to whatever the latest threat is and, especially in the USA, to using scare tactics to bully passengers. And while the west wages war in other parts of the world, there will always be those smart and determined people.
Then another personal gripe of mine. More pressure on the use of cash payments for airline tickets. Last night US media were making a big deal of the fact that this guy paid cash for his ticket in Nigeria. All the ‘experts’ claim this is a warning sign of potential terrorist activity. I hope the people who are really in charge, rather than the so-called experts on TV, aren’t so stupid. I took the liberty of checking out the State Department’s website and here is what they say about use of credit cards in Nigeria:
The Nigerian currency, the naira, is non-convertible. U.S. dollars are widely accepted. Nigeria is a cash economy, and it is usually necessary to carry sufficient currency to cover the expenses of a planned visit, which makes travelers an attractive target for criminals. Credit cards are rarely accepted beyond a few upscale hotels. Due to credit card fraud in Nigeria and by cohorts in the United States, credit card use should be considered carefully. While Citibank cashes some traveler’s checks, most other banks do not. American Express does not have offices in Nigeria; however, Thomas Cook does. Inter-bank transfers are often difficult to accomplish, though money transfer services such as Western Union are available.
So any airline flying from Nigeria had better accept cash payments…
But this is not an article about airport security. Travelling is a hassle these days but lack of pillows is a minor annoyance in the greater scheme of things.
Think for a moment about what would have happened if this attack had succeeded. The indirect consequences could be much worse than the direct ones. Think back to September 11th, 2001. Only this time imagine it worse. A lockdown of the USA. Borders could be sealed. Banks could be closed (Google the ‘bank holiday’ conspiracy theories…) and ATMs switched off. Assets could be appropriated by the government, as is common in times of war. Telecommunications and the internet could stop working. Martial law could be imposed. Events could easily get out of hand – causing blood in the streets, figuratively if not literally.
Similar things could easily happen elsewhere too. In the UK, for example, it is well known that the military have an emergency plan to seal off the whole of Greater London.
As smart individuals we need to make sure we are properly prepared for such catastrophes. Unfortunately, I think the probability of a successful major terrorist attack within the next few years is high, and it is more than likely to target the financial system. This would in many ways be awfully convenient for the powers that be, too – since then they would have somebody else to blame for a total collapse of the financial system that is happening already (see the related post links below to read about the decline in the value of the US dollar or ‘dollar devaluation‘)
I certainly hope I am wrong, and I am by no means saying that all the above things are going to happen. But I consider it would be smart to be prepared. It’s clearly better to have contingency plans in place and never have to use them, than the other way around.
So let’s treat this incident as a wake up call. We all get lazy. We all get stuck in our routines as soon as we feel a little bit comfortable and secure. But it should be a serious New Year’s resolution to put into place strong strategies to protect not just your assets but yourself. Don’t put it off. Do it now before it’s too late!
What do I mean? Different people have different necessities. But here are some of the basics:
- Physical gold and silver: The majority should be stored outside your home country, but you need some at home. Silver coins are better to barter for things like food. Both silver and gold are great investments. But if trading on the markets is suspended then all your ETFs, mining stocks, Perth Mint Certificates and the like will be worthless, at least in the short term. You need a proportion of your portfolio in physical metals. More on Buying Physical Gold Bullion Offshore here.
- Second residencies and passports: Again, it’s all about diversifying risk. Identifying yourself and your family as citizens of a neutral country may just come in very handy one day. Mobility is essential for your security. In the meantime, having legal residence (the papers) and/or a bolt hole (physical property) in a secure jurisdiction like a tax haven, well away from potential problems, is also reassuring. Rather than being forced to flee to an unknown place, you can just step comfortably in to a new life you have waiting for you. And the legal residence can lead to a second passport by naturalization after a few short years. More on Second Passports and Residencies here.
- Offshore Banking: Something as simple as opening a multi currency bank account outside your home jurisdiction can reduce and spread risk. Hold funds in various currencies and financial instruments. Any prudent investor should have international and foreign currency holdings and a multi currency account is a good starting point. For greater security and personal privacy consider the use of a Panama Foundation or Corporation. More on Offshore Banking matters here.
- Alternative Incomes: What would you do if you had to abandon your business tomorrow and leave the country? You should have not just assets in place overseas, but also a secure income stream from some sort of business you can run internationally. More on Offshore Wealth Creation here.
- Understand and Use Privacy Technology: Secure your internet communications. And, though this is certainly more difficult, think about what you would do if you didn’t have access to the internet. I don’t believe the whole internet will collapse, but parts of it certainly could. More on Privacy Technology in our new Secure Computing report, available in the members area.
There are lots more contingency plans you might need to put in place, depending on your family, your business, and your personal situation. For this reason we offer a free e-mail consultation to all paid-up Q Wealth members (obviously in our own time, it can take a few weeks for your reply) and we encourage you to attend our events where such contingency plans are discussed.
The first and most important step, if you like this article and haven’t already done so, is to sign up for our free Q Bytes newsletter to benefit from free weekly tips on major themes like offshore banking, asset protection, personal security, precious metals, and offshore wealth creation.