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  1. #35
    Regular Member kelana's Avatar
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    Default NSA Can Spy on Smart Phone Data - SPIEGEL :: iPhone, Android Smartphones, BlackBerry


    Privacy Scandal

    NSA Can Spy on Smart Phone Data


    September 07, 2013 – 06:00 PM

    SPIEGEL has learned from internal NSA documents that the US intelligence agency has the capability of tapping user data from the iPhone, devices using Android as well as BlackBerry, a system previously believed to be highly secure.


    German Chancellor Angela Merkel holds a BlackBerry Z10 smart phone:
    Will the company face a setback following claims the NSA can spy on its phones?


    The United States' National Security Agency intelligence-gathering operation is capable of accessing user data from smart phones from all leading manufacturers. Top secret NSA documents that SPIEGEL has seen explicitly note that the NSA can tap into such information on Apple iPhones, BlackBerry devices and Google's Android mobile operating system.

    The documents state that it is possible for the NSA to tap most sensitive data held on these smart phones, including contact lists, SMS traffic, notes and location information about where a user has been.

    The documents also indicate that the NSA has set up specific working groups to deal with each operating system, with the goal of gaining secret access to the data held on the phones.

    In the internal documents, experts boast about successful access to iPhone data in instances where the NSA is able to infiltrate the computer a person uses to sync their iPhone. Mini-programs, so-called "scripts," then enable additional access to at least 38 iPhone features.

    The documents suggest the intelligence specialists have also had similar success in hacking into BlackBerrys. A 2009 NSA document states that it can "see and read SMS traffic." It also notes there was a period in 2009 when the NSA was temporarily unable to access BlackBerry devices. After the Canadian company acquired another firm the same year, it changed the way in compresses its data. But in March 2010, the department responsible at Britain's GCHQ intelligence agency declared in a top secret document it had regained access to BlackBerry data and celebrated with the word, "champagne!"

    The documents also state that the NSA has succeeded in accessing the BlackBerry mail system, which is known to be very secure. This could mark a huge setback for the company, which has always claimed that its mail system is uncrackable.

    In response to questions from SPIEGEL, BlackBerry officials stated, "It is not for us to comment on media reports regarding alleged government surveillance of telecommunications traffic." The company said it had not programmed a "'back door' pipeline to our platform."

    The material viewed by SPIEGEL suggests that the spying on smart phones has not been a mass phenomenon. It has been targeted, in some cases in an individually tailored manner and without the knowledge of the smart phone companies.


    Correction: The original version of this news story was adapted from a SPIEGEL press release on Saturday that did not include information attributing the March 2010 document cited in the original to Britain's GCHQ intelligence agency. This important information has been added, and the full English version of the article has since been posted online.


    http://www.spiegel.de/international/...-a-920971.html


    ----------------------------------------------------------------------------------------


    UK, US able to crack most encryption used online

    Summary: By weakening encryption standards, inserting vulnerabilities into vendors' technology, and using supercomputer-backed password crackers, the US and the UK are able to break encryption used to back technologies like SSH, HTTPS, and VPNs.

    By Michael Lee | September 6, 2013 -- 00:11 GMT (08:11 SGT) | ZDNet


    Spy agencies in the UK and the US are reportedly able to crack the same encryption used online to routinely secure information.

    The reveal is the latest part of the cache of documents leaked by former US Defence contractor Edward Snowden. According to The Guardian andThe New York Times, the US National Security Agency and the UK counterpart, the Government Communications Headquarters (GCHQ), have been working to ensure that encryption has been undermined in three broad ways. The methods used by the spy agencies are controlling international encryption standards; working with technology companies and online service providers to insert weaknesses in technology and software; and the use of supercomputer brute force encryption keys.

    The US program around vulnerability insertion targets "commercial encryption systems, IT systems, networks, and endpoint communications devices". It has been called the SIGINT (Signals Intelligence) Enabling Project, and is reported to be a US$250 million a year initiative.

    The US documents also outline where the NSA expects its capabilities to be for the 2013 financial year. These include achieving full SIGINT access to an unnamed, but "major communications provider", as well as a "major peer-to-peer voice and text communications system".

    The UK documents around its "BULLRUN" system are more general, and note that its US ally has been leading the charge against "defeating network security and privacy". Its decryption efforts appear to focus mostly around network communications, and the program is run from its Penetration Target Defences (PTD) division.

    "The various types of security covered by BULLRUN include, but are not limited to, TLS/SSL, https (eg, webmail), SSH, encrypted chat, VPNs, and encrypted VoIP."

    Analysts using the BULLRUN system are required by GCHQ to be kept in the dark, noting that they should not necessarily be told how the data they are working on was acquired.

    "Access to BULLRUN does not imply any 'need-to-know' the details of sources and methods used to achieve exploitation, and, in general, there will beno 'need-to-know'," the UK document says.

    Ironically, the UK document emphasises that the existence of BULLRUN must never be known.

    "Any admission of 'fact of' a capability to defeat encryption used in specific network communication technologies or disclosure of details relating to that capability must be protected by the BULLRUN [community of intelligence] and restricted to those specifically indoctrinated for BULLRUN."

    France, Australia, and New Zealand appear to be lagging behind the UK's efforts, as the UK document indicates that they are only expected to introduce BULLRUN at a later date.


    More here.


    ----------------------------------------------------------------------------------------


    NSA Has Full "Back Door" Access To iPhone, BlackBerry And Android Smartphones, Documents Reveal

    09/08/2013


    Two months ago, when we reported that the NSA has successfully inserted illegal access protocols into the Android OS, thus granting it back door access into nearly three quarters of all cell phones, the news was met with skepticism and resistance: how could an open-sourced architecture be so frail and open to penetration was the most common complaint. We wonder if today's news, broken by Germany's Spiegel, according to which the NSA can spy not only on Android smartphones but tap user data on all iPhone and BlackBerry devices "including contact lists, SMS traffic, notes and location information about where a user has been", will be met with the same skepticism or if the realization that every form of privacy is now gone, has finally dawned on the population. Spiegel reports, citing"internal NSA documents that the NSA has the capability of tapping user data from the iPhone, devices using Android as well as BlackBerry, a system previously believed to be highly secure. The documents also indicate that the NSA has set up specific working groups to deal with each operating system, with the goal of gaining secret access to the data held on the phones." While at this point it should come as no surprise that the NSA pervasively spies on Americans without a warrant or clearance, and has access to every device permitting electronic communication, the bigger question is: if everything is being spied on, what is left? Is carrierpigeons.com about to IPO?


    From Spiegel:

    The United States' National Security Agency intelligence-gathering operation is capable of accessing user data from smart phones from all leading manufacturers. Top secret NSA documents that SPIEGEL has seen explicitly note that the NSA can tap into such information on Apple iPhones, BlackBerry devices and Google's Android mobile operating system.

    The documents state that it is possible for the NSA to tap most sensitive data held on these smart phones, including contact lists, SMS traffic, notes and location information about where a user has been.

    In the internal documents, experts boast about successful access to iPhone data in instances where the NSA is able to infiltrate the computer a person uses to sync their iPhone. Mini-programs, so-called "scripts," then enable additional access to at least 38 iPhone features.

    The documents suggest the intelligence specialists have also had similar success in hacking into BlackBerrys. A 2009 NSA document states that it can "see and read SMS traffic."

    It also notes there was a period in 2009 when the NSA was temporarily unable to access BlackBerry devices. After the Canadian company acquired another firm the same year, it changed the way in compresses its data. But in March 2010, the department responsible at Britain's GCHQ intelligence agency declared in a top secret document it had regained access to BlackBerry data and celebrated with the word, "champagne!"

    The documents also state that the NSA has succeeded in accessing the BlackBerry mail system, which is known to be very secure. This could mark a huge setback for the company, which has always claimed that its mail system is uncrackable.

    In response to questions from SPIEGEL, BlackBerry officials stated, "It is not for us to comment on media reports regarding alleged government surveillance of telecommunications traffic." The company said it had not programmed a "'back door' pipeline to our platform."

    Of course not, it just allowed the NSA to program one. And while the biggest scandal of the Obama administration continues to get ever bigger, and makes Nixon look like an amateur, what is the response? Why a media that aside for a few outlets remains mute... and diversion from the administration of course, in the form of war and hundreds of thousands about to die just to keep the president in his seat.


    ---------------------------------------------------------

    NSA, no way! Anti-spying sentiments on the rise amid steady stream of disclosures — RT USA (2013-09-11)

    http://rt.com/usa/nsa-poll-surveillance-issa-722/


    The National Security Agency isn’t making many friends, apparently: a new poll published this week suggests that a majority of Americans continue to have complaints with the NSA’s surveillance practices amid a myriad of recent disclosures.


    [...]




    ------------------
    "These wars are a function of the current Imperium."

    "A lie told often enough becomes truth" - Vladimir Lenin

    "An unexciting truth may be eclipsed by a thrilling lie." - Aldous Huxley, author of among others, 'Brave New World', 'Brave New World Revisited', 'The Doors of Perception', 'Island' (his last book)


    "For the great majority of mankind are satisfied with appearances, as though they were realities, and are often more influenced by the things that seem than by those that are." - Niccolo Machiavelli

  2. #36
    Regular Member kelana's Avatar
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    Cool The Newest iPhone 5S featuring 'Touch ID' Fingerprint-Sensor Technology

    Apple To Announce Cheaper, Golder, Bigger, Faster iPhone 5S
    09/10/2013

    We just can't wait to hear about the different colors, the camera, the screen size, the cheapness, and everything else that has been rumored to make this Apple announcement as un-evolutionary as many of the previous ones. Of course, there could be 'just one more thing', but we suspect not...

    The highlights:

    APPLE INTRODUCES IPHONE 5S

    IPHONE 5S Includes 'Touch Id' Fingerprint-Sensor Technology
    IPHONE 5S Includes Slow-Motion Video-Recording Feature
    IPHONE 5S Adds Burst Mode To Take 10 Pictures Per Second
    IPHONE 5S Adds Improved Camera Lens
    IPHONE 5S Includes A7 64-Bit Chip
    IPHONE 5S CPU Performance Is 40X From Original iPhone In 2007
    IPHONE 5S Includes White, Black, Gold Colors
    IPHONE 5S Is Twice As Fast As iPhone 5
    Finger-Touch Sensor Is Located On iPhone 5S Home Button
    IPHONE 5S To Cost $199 To $399 With Two-Year Contract


    and don't forget... the NSA still mocks the iPhone users...
    But the kicker is when, in another secret presentation, the NSA itself mocks Orwell, using a reference from the iconic Apple "1984" advertisement...

    ... As it says the man who has become "Big Brother" is none other than AAPL's deceased visionary leader Steve Jobs...

    ... And is so very grateful for Apple's paying clients who make its job so much easier

    ...
    And the punchline:

    • IPHONE 5S INCLUDES 'TOUCH ID' FINGERPRINT-SENSOR TECHNOLOGY



    Now the fingerprint database creation will be made much easier...


    In the meantime, here's the pricing info in
    the USA:

    Apple’s new lower-end iPhone 5c will run US$549 for a 16GB and US$649 for a 32GB model off contract, according to Apple’s store site.

    While the higher-end model iPhone 5s will continue to run US$649 (16GB), US$749 (32GB) and US$849 (64GB) off-contract.

  3. #37
    Regular Member kelana's Avatar
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    Lightbulb Matthew Green Speculates on How the NSA Defeats Encryption



    Bruce Schneier


    Schneier on Security

    A blog covering security and security technology.

    September 11, 2013

    Matthew Green Speculates on How the NSA Defeats Encryption


    This blog post is well worth reading, and not just because Johns Hopkins University asked him to remove it, and then backed down a few hours later.


    https://www.schneier.com/blog/archiv...w_green_s.html


    About Bruce Schneier



    Bruce Schneier is an internationally renowned security technologist, called a "security guru" by The Economist. He is the author of 12 books -- including Liars and Outliers: Enabling the Trust Society Needs to Survive -- as well as hundreds of articles, essays, and academic papers. His influential newsletter "Crypto-Gram" and his blog "Schneier on Security" are read by over 250,000 people. He has testified before Congress, is a frequent guest on television and radio, has served on several government committees, and is regularly quoted in the press. Schneier is a fellow at the Berkman Center for Internet and Society at Harvard Law School, a program fellow at the New America Foundation's Open Technology Institute, a board member of the Electronic Frontier Foundation, an Advisory Board Member of the Electronic Privacy Information Center, and the Security Futurologist for BT -- formerly British Telecom.



    ~~~~~~~~~~~~~~~~~~~~~~~~~


    Read also "The NSA's next move: silencing university professors?"

    On 9 September, Johns Hopkins University asked one of its professors to take down a blog post on the NSA.

    This actually happened yesterday (9/9/2013):

    A professor in the computer science department at Johns Hopkins, a leading American university, had written a post on his blog, hosted on the university's servers, focused on his area of expertise, which is cryptography. The post was highly critical of the government, specifically the National Security Agency, whose reckless behavior in attacking online security astonished him.

    Professor Matthew Green wrote on 5 September:

    I was totally unprepared for today's bombshell revelations describing the NSA's efforts to defeat encryption. Not only does the worst possible hypothetical I discussed appear to be true, but it's true on a scale I couldn't even imagine.

    The post was widely circulated online because it is about the sense of betrayal within a community of technical people who had often collaborated with the government.

    [...]


    http://www.theguardian.com/commentis...-johns-hopkins


    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


    A Few Thoughts on Cryptographic Engineering


    Some random thoughts about crypto. Notes from a course I teach. Pictures of my dachshunds.


    Thursday, September 5, 2013

    On the NSA



    Let me tell you the story of my tiny brush with the biggest crypto story of the year.

    A few weeks ago I received a call from a reporter at ProPublica, asking me background questions about encryption. Right off the bat I knew this was going to be an odd conversation, since this gentleman seemed convinced that the NSA had vast capabilities to defeat encryption. And not in a 'hey, d'ya think the NSA has vast capabilities to defeat encryption?' kind of way.No, he'd already established the defeating. We were just haggling over the details.

    Oddness aside it was a fun (if brief) set of conversations, mostly involving hypotheticals. If the NSA could do this, how might they do it? What would the impact be? I admit that at this point one of my biggest concerns was to avoid coming off like a crank. After all, if I got quoted sounding too much like an NSA conspiracy nut, my colleagues would laugh at me. Then I might not get invited to the cool security parties.

    All of this is a long way of saying that I was totally unprepared for today's bombshell revelations describing the NSA's efforts to defeat encryption. Not only does the worst possible hypothetical I discussed appear to be true, but it's true on a scale I couldn't even imagine. I'm no longer the crank. I wasn't even close to cranky enough.

    And since I never got a chance to see the documents that sourced the NYT/ProPublica story -- and I would give my right arm to see them -- I'm determined to make up for this deficit with sheer speculation. Which is exactly what this blog post will be.

    'Bullrun' and 'Cheesy Name'

    If you haven't read the ProPublica/NYT or Guardian stories, you probably should. The TL;DR is that the NSA has been doing some very bad things. At a combined cost of $250 million per year, they include:

    1. Tampering with national standards (NIST is specifically mentioned) to promote weak, or otherwise vulnerable cryptography.
    2. Influencing standards committees to weaken protocols.
    3. Working with hardware and software vendors to weaken encryption and random number generators.
    4. Attacking the encryption used by 'the next generation of 4G phones'.
    5. Obtaining cleartext access to 'a major internet peer-to-peer voice and text communications system' (Skype?)
    6. Identifying and cracking vulnerable keys.
    7. Establishing a Human Intelligence division to infiltrate the global telecommunications industry.
    8. And worst of all (to me): somehow decrypting SSL connections.

    All of these programs go by different code names, but the NSA's decryption program goes by the name 'Bullrun' so that's what I'll use here.

    How to break a cryptographic system

    There's almost too much here for a short blog post, so I'm going to start with a few general thoughts. Readers of this blog should know that there are basically three ways to break a cryptographic system. In no particular order, they are:


    1. Attack the cryptography. This is difficult and unlikely to work against the standard algorithms we use (though there are exceptions like RC4.) However there are many complex protocols in cryptography, and sometimes they are vulnerable.
    2. Go after the implementation. Cryptography is almost always implemented in software -- and software is a disaster. Hardware isn't that much better. Unfortunately active software exploits only work if you have a target in mind. If your goal is mass surveillance, you need to build insecurity in from the start. That means working with vendors to add backdoors.
    3. Access the human side. Why hack someone's computer if you can get them to give you the key?

    Bruce Schneier, who has seen the documents, says that 'math is good', but that 'code has been subverted'. He also says that the NSA is 'cheating'. Which, assuming we can trust these documents, is a huge sigh of relief. But it also means we're seeing a lot of (2) and (3) here.

    So which code should we be concerned about? Which hardware?

    SSL Servers by OS type. Source: Netcraft.

    This is probably the most relevant question. If we're talking about commercial encryption code, the lion's share of it uses one of a small number of libraries. The most common of these are probably the Microsoft CryptoAPI (and Microsoft SChannel) along with the OpenSSL library.

    Of the libraries above, Microsoft is probably due for the most scrutiny. While Microsoft employs good (and paranoid!) people to vet their algorithms, their ecosystem is obviously deeply closed-source. You can view Microsoft's code (if you sign enough licensing agreements) but you'll never build it yourself. Moreover they have the market share. If any commercial vendor is weakening encryption systems, Microsoft is probably the most likely suspect.

    And this is a problem because Microsoft IIS powers around 20% of the web servers on the Internet -- and nearly forty percent of the SSL servers! Moreover, even third-party encryption programs running on Windows often depend on CAPI components, including the random number generator. That makes these programs somewhat dependent on Microsoft's honesty.

    Probably the second most likely candidate is OpenSSL. I know it seems like heresy to imply that OpenSSL -- an open source and widely-developed library -- might be vulnerable. But at the same time it powers an enormous amount of secure traffic on the Internet, thanks not only to the dominance of Apache SSL, but also due to the fact that OpenSSL is used everywhere. You only have to glance at the FIPS CMVP validation lists to realize that many 'commercial' encryption products are just thin wrappers around OpenSSL.


    Unfortunately while OpenSSL is open source, it periodically coughs up vulnerabilities. Part of this is due to the fact that it's a patchwork nightmare originally developed by a programmer who thought it would be a fun way to learn Bignum division.* Part of it is because crypto is unbelievably complicated. Either way, there are very few people who really understand the whole codebase.




    On the hardware side (and while we're throwing out baseless accusations) it would be awfully nice to take another look at the Intel Secure Key integrated random number generators that most Intel processors will be getting shortly. Even if there's no problem, it's going to be an awfully hard job selling these internationally after today's news.

    Which standards?

    From my point of view this is probably the most interesting and worrying part of today's leak. Software is almost always broken, but standards -- in theory -- get read by everyone. It should be extremely difficult to weaken a standard without someone noticing. And yet the Guardian and NYT stories are extremely specific in their allegations about the NSA weakening standards.

    The Guardian specifically calls out the National Institute of Standards and Technology (NIST) for a standard they published in 2006. Cryptographers have always had complicated feelings about NIST, and that's mostly because NIST has a complicated relationship with the NSA.

    Here's the problem: the NSA ostensibly has both a defensive and an offensive mission. The defensive mission is pretty simple: it's to make sure US information systems don't get pwned. A substantial portion of that mission is accomplished through fruitful collaboration with NIST, which helps to promote data security standards such as the Federal Information Processing Standards (FIPS) and NIST Special Publications.

    I said cryptographers have complicated feelings about NIST, and that's because we all know that the NSA has the power to use NIST for good as well as evil. Up until today there's been no real evidence of malice, despite some occasional glitches -- and compelling evidence that at least one NIST cryptographic standard could have contained a backdoor. But now maybe we'll have to re-evaluate that relationship. As utterly crazy as it may seem.

    Unfortunately, we're highly dependent on NIST standards, ranging from pseudo-random number generators to hash functions and ciphers, all the way to the specific elliptic curves we use in SSL/TLS. While the possibility of a backdoor in any of these components does seem remote, trust has been violated. It's going to be an absolute nightmare ruling it out.

    Which people?

    Probably the biggest concern in all this is the evidence of collaboration between the NSA and unspecified 'telecom providers'. We already know that the major US (and international) telecom carriers routinely assist the NSA in collecting data from fiber-optic cables. But all this data is no good if it's encrypted.

    While software compromises and weak standards can help the NSA deal with some of this, by far the easiest way to access encrypted data is to simply ask for -- or steal -- the keys. This goes for something as simple as cellular encryption (protected by a single key database at each carrier) all the way to SSL/TLS which is (most commonly) protected with a few relatively short RSA keys.

    The good and bad thing is that as the nation hosting the largest number of popular digital online services (like Google, Facebook and Yahoo) many of those critical keys are located right here on US soil. Simultaneously, the people communicating with those services -- i.e., the 'targets' -- may be foreigners. Or they may be US citizens. Or you may not know who they are until you scoop up and decrypt all of their traffic and run it for keywords.

    Which means there's a circumstantial case that the NSA and GCHQ are either directly accessing Certificate Authority keys** or else actively stealing keys from US providers, possibly (or probably) without executives' knowledge. This only requires a small number of people with physical or electronic access to servers, so it's quite feasible.*** The one reason I would have ruled it out a few days ago is because it seems so obviously immoral if not illegal, and moreover a huge threat to the checks and balances that the NSA allegedly has to satisfy in order to access specific users' data via programs such as PRISM.

    To me, the existence of this program is probably the least unexpected piece of all the news today. Somehow it's also the most upsetting.

    So what does it all mean?
    I honestly wish I knew. Part of me worries that the whole security industry will talk about this for a few days, then we'll all go back to our normal lives without giving it a second thought. I hope we don't, though. Right now there are too many unanswered questions to just let things lie.

    The most likely short-term effect is that there's going to be a lot less trust in the security industry. And a whole lot less trust for the US and its software exports. Maybe this is a good thing. We've been saying for years that you can't trust closed code and unsupported standards: now people will have to verify.

    Even better, these revelations may also help to spur a whole burst of new research and re-designs of cryptographic software. We've also been saying that even open code like OpenSSL needs more expert eyes. Unfortunately there's been little interest in this, since the clever researchers in our field view these problems as 'solved' and thus somewhat uninteresting.

    What we learned today is that they're solved all right. Just not the way we thought.
    Notes:

    * The original version of this post repeated a story I heard recently (from a credible source!) about Eric Young writing OpenSSL as a way to learn C. In fact he wrote it as a way to learn Bignum division, which is way cooler. Apologies Eric!

    ** I had omitted the Certificate Authority route from the original post due to an oversight -- thanks to Kenny Patterson for pointing this out -- but I still think this is a less viable attack for passive eavesdropping (that does not involve actively running a man in the middle attack). And it seems that much of the interesting eavesdropping here is passive.

    *** The major exception here is Google, which deploys Perfect Forward Secrecy for many of its connections, so key theft would not work here. To deal with this the NSA would have to subvert the software or break the encryption in some other way.


    Posted by Matthew Green at 11:27 PM




    About Matthew Green

    I'm a cryptographer and research professor at Johns Hopkins University. I've designed and analyzed cryptographic systems used in wireless networks, payment systems and digital content protection platforms. In my research I look at the various ways cryptography can be used to promote user privacy.



    http://blog.cryptographyengineering....09/on-nsa.html

  4. #38
    Regular Member kelana's Avatar
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    Exclamation Vladimir Putin Addresses American People Through The New York Times (2013-09-11)


    Vladimir Putin Addresses America In NYT Op-Ed; Calls For Caution In Syria, Denounces "American Exceptionalism"


    09/11/2013


    Authored by Vladimir Putin, originally posted at The New York Times, highlights ours (ZH)


    A Plea For Caution From Russia

    Recent events surrounding Syria have prompted me to speak directly to the American people and their political leaders. It is important to do so at a time of insufficient communication between our societies.

    Relations between us have passed through different stages. We stood against each other during the cold war. But we were also allies once, and defeated the Nazis together. The universal international organization — the United Nations — was then established to prevent such devastation from ever happening again.

    The United Nations’ founders understood that decisions affecting war and peace should happen only by consensus, and with America’s consent the veto by Security Council permanent members was enshrined in the United Nations Charter. The profound wisdom of this has underpinned the stability of international relations for decades.

    No one wants the United Nations to suffer the fate of the League of Nations, which collapsed because it lacked real leverage. This is possible if influential countries bypass the United Nations and take military action without Security Council authorization.

    The potential strike by the United States against Syria, despite strong opposition from many countries and major political and religious leaders, including the pope, will result in more innocent victims and escalation, potentially spreading the conflict far beyond Syria’s borders. A strike would increase violence and unleash a new wave of terrorism. It could undermine multilateral efforts to resolve the Iranian nuclear problem and the Israeli-Palestinian conflict and further destabilize the Middle East and North Africa. It could throw the entire system of international law and order out of balance.

    Syria is not witnessing a battle for democracy, but an armed conflict between government and opposition in a multireligious country. There are few champions of democracy in Syria. But there are more than enough Qaeda fighters and extremists of all stripes battling the government. The United States State Department has designated Al Nusra Front and the Islamic State of Iraq and the Levant, fighting with the opposition, as terrorist organizations. This internal conflict, fueled by foreign weapons supplied to the opposition, is one of the bloodiest in the world.

    Mercenaries from Arab countries fighting there, and hundreds of militants from Western countries and even Russia, are an issue of our deep concern. Might they not return to our countries with experience acquired in Syria? After all, after fighting in Libya, extremists moved on to Mali. This threatens us all.

    From the outset, Russia has advocated peaceful dialogue enabling Syrians to develop a compromise plan for their own future. We are not protecting the Syrian government, but international law. We need to use the United Nations Security Council and believe that preserving law and order in today’s complex and turbulent world is one of the few ways to keep international relations from sliding into chaos. The law is still the law, and we must follow it whether we like it or not. Under current international law, force is permitted only in self-defense or by the decision of the Security Council. Anything else is unacceptable under the United Nations Charter and would constitute an act of aggression.

    No one doubts that poison gas was used in Syria. But there is every reason to believe it was used not by the Syrian Army, but by opposition forces, to provoke intervention by their powerful foreign patrons, who would be siding with the fundamentalists. Reports that militants are preparing another attack — this time against Israel — cannot be ignored.

    It is alarming that military intervention in internal conflicts in foreign countries has become commonplace for the United States. Is it in America’s long-term interest? I doubt it. Millions around the world increasingly see America not as a model of democracy but as relying solely on brute force, cobbling coalitions together under the slogan “you’re either with us or against us.”

    But force has proved ineffective and pointless. Afghanistan is reeling, and no one can say what will happen after international forces withdraw. Libya is divided into tribes and clans. In Iraq the civil war continues, with dozens killed each day. In the United States, many draw an analogy between Iraq and Syria, and ask why their government would want to repeat recent mistakes.

    No matter how targeted the strikes or how sophisticated the weapons, civilian casualties are inevitable, including the elderly and children, whom the strikes are meant to protect.

    The world reacts by asking: if you cannot count on international law, then you must find other ways to ensure your security. Thus a growing number of countries seek to acquire weapons of mass destruction. This is logical: if you have the bomb, no one will touch you. We are left with talk of the need to strengthen nonproliferation, when in reality this is being eroded.

    We must stop using the language of force and return to the path of civilized diplomatic and political settlement.

    A new opportunity to avoid military action has emerged in the past few days. The United States, Russia and all members of the international community must take advantage of the Syrian government’s willingness to place its chemical arsenal under international control for subsequent destruction. Judging by the statements of President Obama, the United States sees this as an alternative to military action.

    I welcome the president’s interest in continuing the dialogue with Russia on Syria. We must work together to keep this hope alive, as we agreed to at the Group of 8 meeting in Lough Erne in Northern Ireland in June, and steer the discussion back toward negotiations.

    If we can avoid force against Syria, this will improve the atmosphere in international affairs and strengthen mutual trust. It will be our shared success and open the door to cooperation on other critical issues.

    My working and personal relationship with President Obama is marked by growing trust. I appreciate this. I carefully studied his address to the nation on Tuesday. And I would rather disagree with a case he made on American exceptionalism, stating that the United States’ policy is “what makes America different. It’s what makes us exceptional.” It is extremely dangerous to encourage people to see themselves as exceptional, whatever the motivation. There are big countries and small countries, rich and poor, those with long democratic traditions and those still finding their way to democracy. Their policies differ, too. We are all different, but when we ask for the Lord’s blessings, we must not forget that God created us equal.





    ------------------
    "These wars are a function of the current Imperium."

    Currency Wars, Trade Wars then World Wars. "When all else fails, they take you to War." - Gerald Celente

    "I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones." - Albert Einstein




  5. #39
    Regular Member kelana's Avatar
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    Default Laurence Kotlikoff: "The US Fiscal Gap Is $200 Trillion..."


    Laurence Kotlikoff: "The US Fiscal Gap Is $200 Trillion..."


    2013-09-11

    While it is easy and often enjoyable to distract oneself with daily drudgery such as who will bomb whom (if not so enjoyable for those on the receiving end of said bombs), the key word in the sentence is just one:
    "distract" and as Kyle Bass pointed out correctly, the best, and most "economy-boosting" of all distractions ends up with the proverbial red button being pushed. Sadly, with an economy which Boston University's Larry Kotlikoff defines as "arguably in worst fiscal shape than any other developed country", there is much to be distracted by such as wars here and there. So for those who have no desire to prove the axiom that ignorance is bliss, or to have their heads stuck in the sand, here is a must read interview between Goldman Sachs' Hugo Scott-Gall and the iconoclast economist who, in a vast minority, calls it like it is.

    Here is the full interview:

    Hugo Scott-Gall: You argue that the official debts that countries report are economically meaningless numbers. Please explain this?

    Larry Kotlikoff: Every dollar the government takes in or pays out can be labelled in economically arbitrary ways. For example, the government can call our social security contributions “taxes” or “official borrowing.” And it can call our social security benefits “transfer payments” or “return of principal or principal plus interest.” There is nothing in the math of economic theory that pins down the government’s word choice and each labelling convention will produce a different reported time path of debt, deficits, taxes, and spending. At their heart, these measures are linguistic and convey nothing about a country’s underlying fiscal policy – only about what the government decides to put on and keep off the books.

    Uncle Sam is very powerful, but he has only one set of vocal cords. We are all free to label past, present, and projected future government receipts and outlays any way we want, as long as our labelling convention is internally consistent (e.g., if we label government receipts as borrowing, we need to label other outlays as debt service). Consequently, we can produce any past, current, and projected future measure of the government’s debt and other fiscal quantities. With the right past labelling, we can say the current debt to GDP ratio is miles higher than Rogoff-Reinhart’s critical 90 percent. Or, we can argue that the debt to GDP ratio is hugely negative. The Economics labelling problem tells us that what we measure as the size of standard fiscal variables is language- or frame of reference-dependent. This is fundamentally no different from physics. The measurement of time and distance is not uniquely pinned down by the math. What time you report and how you measure the size of physical objects depends on one’s frame of reference (direction and rate of speed through space) or language, if you will.

    Here’s another way to see my point. My mother gets checks from the US Treasury all the time. They all look the same except for their amounts. Some are for social security and some are for holding Treasury bonds. But Uncle Sam is discounting the amounts coming on the Treasuries and including that in his official debt measure, while ignoring the amounts coming for social security benefits. Using economically meaningless fiscal indicators to guide fiscal policy is like driving in NY with a map of LA. If you aren’t careful, you’ll drive into the East River.


    Hugo Scott-Gall:
    If conventional fiscal measures are, as you say, content free, what should we measure?

    Larry Kotlikoff: Every dynamic mathematical model of the economy that economists write down (and thousands are being constructed each year) includes what’s called the government’s intertemporal budget constraint. This constraint simply requires that the present value of government outlays, no matter how labelled, equals the present value of government receipts, no matter how labelled. In this over-time government balance sheet, the outlays represent the liabilities and the receipts represent the assets. If the value in the present of the liabilities exceeds the value in the present of the receipts, the government’s balance sheet isn’t balanced, with the difference between the liabilities and assets call the fiscal gap. The fiscal gap doesn’t suffer from an economics labelling problem for a simple reason - it puts everything on the books. The fiscal gap is the true measure of a government’s debt. And once one determines its size, one can assess the impact on our children of paying it off if it’s all dumped into their laps. This is part of a companion analysis, called Generational Accounting, which I initiated in the late 80s together with my co-author, UC Berkeley economist Alan Auerbach and my then student, Jagaadesh Gokhale (now at the Cato Institute).


    Hugo Scott-Gall:
    How big is the US fiscal gap and what does US generational accounting show?

    Larry Kotlikoff: The CBO will release its 2013 long-term fiscal projection, called the Alternative Fiscal Forecast (an alternative to the Extended Budget Forecast produced for Congress) this Fall. But
    I estimate the US fiscal gap at US$200 tn, 17 times the reported US$12 tn in official debt in the hands of the public. And this incorporates this year’s tax increases and spending sequestration. What would it take to come up with US$200 tn in present value? The answer is tax hikes or spending cuts, or a combination of the two, amounting to 10 percent of GDP, starting immediately and continuing indefinitely. To do so via spending cuts, alone, would require an immediate and permanent 36% cut in all non-interest spending. To do so via tax hikes, alone, would need an immediate and permanent 55% increase in all federal taxes. Hence, a description of the fiscal adjustments made over the last year could be “too little too late.” In terms of generational accounting, were we to leave our kids and future descendants to cover the entire fiscal gap, they’d face tax rates over their lifetimes around twice as high as those we face.


    Hugo Scott-Gall:
    How do we get better fiscal book keeping?

    Larry Kotlikoff: At my encouragement and that of The Can Kicks Back – a non-profit in DC run by twenty-somethings fighting for generational equity, Senators Kaine and Coons – two Democrats – and Senators Thune and Portman – two Republicans – have just co-introduced THE INFORM ACT. The Bill, which I largely drafted in consultation with Alan Auerbach, will require three agencies in the US government (the CBO, the OMB and the GAO) to do fiscal gap analysis as well as generational accounting on an ongoing basis. To date, 12 Nobel Laureates in economics, over 500 of the nation’s other leading economists, George Shultz, the Former Secretary of the Treasury, State and Labor and the OMB Director, and other prominent government officials, and thousands of non-economists have endorsed the bill at www.theinformact.org. I’m hoping everyone in the country will go to the site, endorse the bill, and spread the word.


    Hugo Scott-Gall:
    How do you recommend solving this issue?

    Larry Kotlikoff: Measuring our fiscal gap and disclosing its implications for ourselves and our children is just step one in addressing our fiscal issues. What’s really needed is the adoption of radical, but generationally fair reforms to our tax, social security, and healthcare system. Maintaining the status quo is not an option. When a patient needs heart surgery, radical surgery is often the safe option. America needs radical policy surgery. I lay out postcard length reforms of out tax, social security, healthcare, and banking systems at www.thepurpleplans.org. Many of these plans have been endorsed by the economics’ profession’s top economists.

    Let me lay out just one of these plans - the Purple Health Plan. The costs of Medicare, Medicaid, the new health exchanges, and employer-paid healthcare (here the costs entail loss of revenue because premiums are exempt from taxes) constitute 60% of the fiscal gap. The Purple Health Plan would eliminate these four systems and start with a clean slate. Under the plan, each US citizen gets a voucher each year, the size of which is determined by his pre-existing medical condition. The voucher is used to purchase, in full, the Basic Health Plan from an insurance provider. The Basic Health Plan’s coverages are established by a panel of doctors subject to the constraint that the costs of all the vouchers never exceeds 10% of GDP. Those who could afford it would be free to buy supplemental policies. No insurer could turn anyone away, but since each voucher is individually rated, insurers would have no incentive to cheery pick. This simple reform, in essence, the healthcare system of Germany, Israel, Holland, Switzerland, and Japan, retains private provision, turns the Basic Health Plan into a commodity with insurance providers competing to attract and retain participants. A very large share – roughly 60% – of America’s fiscal gap can be eliminated via this reform alone. Adopting the other purple plans would eliminate the rest of the fiscal gap without visiting untoward hardship on anyone.


    Hugo Scott-Gall:
    Will society be able to hold current demographic fiscal systems together where young people are heavily taxed...

    Larry Kotlikoff:
    Our country is broke. It’s not broke in 50 years or 30 years or 10 years. It’s broke today. Six decades of take as you go has led us to a precipice. That’s why almost the entire economics profession is talking as one at www.theinformact.org. Economists from all political persuasions are collectively sending our government a warning about what is, effectively, a nuclear economic bomb. I’ve been around economics for a long time. I’ve never seen such a strong response to a proposed Congressional bill. This is the profession sending a statement to the President and Congress that’s not unlike the warning physicists sent via Einstein to Roosevelt about the bomb.


    Hugo Scott-Gall:
    What does all of this mean for overall consumption and savings in the US?

    Larry Kotlikoff: Our huge
    off-the-books fiscal problems were created as a result of the take-as-you-go policies of the post war periods that passed on benefits to older people at the expense of younger people. This systematic intergenerational redistribution produced a massive increase in the absolute and relative consumption of the elderly and a massive decline in our net national saving rate, from 15% in 1950 to 1% now. The ratio of the consumption of a 70-year-old compared to a 35-year-old is about 2.5 times larger today than it was back in 1950. And the reason they’re consuming so much more is that they get the entire set of benefits, from healthcare and social security to tax cuts. National saving finances most domestic investment, so as we’re saving next to nothing means we’re also investing next to nothing. Last year’s net domestic investment rate was 5%, only a third of the 1950 level. And less domestic investment means slower real wage growth, as workers have less capital with which to operate. Finally, since we Americans aren’t saving, we can’t invest in our country. So $4 out of every $5 of investment in the US is now by foreigners. In the late 1970s, Alan Auerbach and I pioneered the development of large-scale computable general equilibrium life-cycle models that we could simulate on a computer. In this and subsequent research, we were able to simulate the impact of take-as-you-go fiscal policy. What we see from these increasingly sophisticated computer models matches exactly what you see in the country, less saving, less investment, less growth, and stagnant wages. While generational policy is not the sole driver of post-war secular economic trends, it’s likely the biggest.


    Hugo Scott-Gall:
    How do other countries compare to the US when you look at their fiscal gaps?

    Larry Kotlikoff:
    The US is arguably in worst fiscal shape than any other developed country. But Greece, the UK, and Japan are close runner ups. As mentioned, our fiscal gap is 10% of the present value of our future GDP. In Germany it’s around 5%, while Canada, Australia and New Zealand are close to zero. Even Italy's long-term fiscal gap is just half of the US’s, yet Italian government bonds sell at a much lower price than US government bonds simply because people don't understand the pension reforms that Italy has rolled out or that Italy has much better control of its healthcare spending.

    The case of Norway is also very interesting. I conducted generational accounting with a Norwegian economist named Erling Steigum back in the mid-90s, which proved that while Norway was reporting a huge surplus because of how it was labelling its transactions, in reality the country was spending at far too high a rate. To its credit, the government went ahead and continued carrying out this analysis on a regular basis, and as a result, created a generational trust fund, where some of the North Sea oil revenue is set aside for future generations. This has left them in a much better position today. Chile, another resource-dominated economy, has also got a similar trust fund in effect. The Canadians have also been very careful about their long-term liabilities. So, some countries are acting more responsibly.


    Hugo Scott-Gall:
    Have you considered the impact of fewer jobs, driven by rising automation, in your analysis?

    Larry Kotlikoff: Automation and the structural loss of jobs is a very important issue. In fact, Jeff Sachsand I have together written about the implications of smart machines, machines that today can substitute almost perfectly, if not more than perfectly for people, and constitute, effectively, competing robots. We’re not far from the day when machines will drive cars too. While that sounds great, the other side of the coin is that younger people are earning less and saving less, and so, they bring much less wealth into old age than previous generations did. Owing to this vicious cycle, these youngsters, who as a group are not the prime owners of capital, aren't going to reap the benefits from this new technology. The beneficiaries are instead going to be a small number of people who are either the inventors, or older people who have the capital to help get the invented technology in place. So, we’re going to see wealth redistributed further, from young workers to older people, with yet direr implications for national saving, domestic investment and growth. Indeed, technological change can, through these general equilibrium feedback effects, end up making all of society worse off in the long run, unless one is careful to redistribute to the young losers from the old winners.



    About Laurence Kotlikoff

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    Laurence Jacob Kotlikoff (born January 30, 1951) is a William Warren FairField Professor at Boston University, a Professor of Economics at Boston University, a Fellow of the American Academy of Arts and Sciences, a Research Associate of the National Bureau of Economic Research, a Fellow of the Econometric Society, a former Senior Economist, and President Reagan's Council of Economic Advisers.
    Kotlikoff, on his own and with co-authors, has made major contributions in the fields and subfields of generational economics, fiscal policy, computational economics, economic growth, national saving, intra- and intergenerational inequality, sources of wealth accumulation, intergenerational altruism and intrafamily risk sharing, banking, and personal finance. He has also done important work on Social Security, healthcare, tax, and banking reform.



    ----------------


    # And please note that this mind-boggling amount "owed" to the society and others, the said US$200,000,000,000,000, just belongs to the Federal government.

    It does not include the debt and promises of the entire 57 states.


    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~


    And here's an article from one year ago:

    Blink! U.S. Debt Just Grew by $11 Trillion - Bloomberg
    By Laurence Kotlikoff & Scott Burns, Aug 9, 2012


    Republicans and Democrats spent last summer battling how best to save $2.1 trillion over the next decade. They are spending this summer battling how best to not save $2.1 trillion over the next decade.

    In the course of that year, the U.S. government’s fiscal gap -- the true measure of the nation’s indebtedness -- rose by $11 trillion.

    The fiscal gap is the present value difference between projected future spending and revenue. It captures all government liabilities, whether they are official obligations to service Treasury bonds or unofficial commitments, such as paying for food stamps or buying drones.

    Some question whether “official” and “unofficial” spending commitments can be added together. But calling particular obligations “official” doesn’t make them economically more important. Indeed, the government would sooner renege on Chinese holding U.S. Treasuries than on Americans collecting Social Security, especially because the U.S. can print money and service its bonds with watered-down dollars.

    For its part, economic theory sees through labels and views a country’s official debt for what it is -- a linguistic construct devoid of real economic content. In contrast, the fiscal gap is theoretically well-defined and invariant to the choice of labels. Each labeling choice changes the mix of obligations between official and unofficial, but leaves the total unchanged.


    Read further here.


  6. #40
    Regular Member kelana's Avatar
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    Cool Larry Summers: The Sudden Departure as the Top Horse for the Fed #1


    Larry Summers: The Sudden Departure as the Top Horse for the Fed #1


    Monday, September 16, 2013
    By Greg Palast for Vice Magazine


    On Sunday afternoon (Sep. 15), facing a revolt by his own party's senators, Obama dumped Larry as likely replacement for Ben Bernanke as Chairman of the Federal Reserve Board.

    Read here the fascinating story behind the scene. Miss not the Secret "End-Game" Memo about the derivative deregulation vis-à-vis WTO negotiation.


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    Cover for TIME Magazine U.S. edition of February 15, 1999 | Vol. 153 No. 6
    L-R: Robert Rubin, Alan Greenspan, and Lawrence Summers

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  7. #41
    Regular Member kelana's Avatar
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    Default The 7 choices left to the military-industrial complex


    THE 7 CHOICES LEFT TO THE MILITARY-INDUSTRIAL COMPLEX


    September 12th, 2013

    Since 2002 the US government has presided over one of the most dramatic financial bubbles of all time: the bubble of the military-industrial complex. (A few will remember that Dwight Eisenhower warned Americans about this in 1961.)



    This bubble, like all others, will pop, and it looks to be deflating right now. The amounts of money that have been spent in the past decade can only be characterized as obscene. But the point that really matters is this:

    Military spending is just part of the bubble.

    In addition to the military complex, we have a massive intelligence complex.

    Not only that, but we also have a massive law enforcement complex. The Department of Homeland Security has given them at least $34 Billion in the past several years, on top of their take from local taxes, state taxes, fines, seizures, and other Fed money.

    Take a look at these graphs. First, defense spending:



    Then, intelligence spending, or as close as I've been able to get to real numbers:




    Lastly, War on Drugs spending, which we’ll use as a proxy for overall law enforcement spending (numbers that are more difficult to acquire):


    Needless to say, this multi-headed beast is huge, requiring oceans of money... and it's about to have its rations cut. Actually, that may be why they're so hot for a war in Syria -- they need to goose spending again, and quickly.


    Power Corrupts, but Arrogance "Stupidizes"

    Yeah, I know that word's not in the dictionary, but it should be.

    These agencies are drunk on power and stupid on arrogance.

    There's no other way to describe a situation where the intelligence and law enforcement branches of this beast have been waging a war against the American people for the last few years.

    Think of the endless search for "domestic terrorists," the sickening NSA spying on everyone, and the 135 SWAT team raids per day in America. Apparently it has never entered their minds that people might eventually resent being abused.

    It's also useful to understand that "intelligence agency" is the same thing as "secret service" and very little different from "secret police." They've had secret courts for some time, after all.

    I won't even talk about the rampant corruption that runs through all of these departments; you can either trust me on that one or not.

    And this situation reaches all the way to local cops. I had a conversation recently with a young man who recently completed a stint with the US Marines and didn’t know what he wanted to do next. At one point, he said that he thought about being a police officer (an easy fit for a Marine), but he rejected the idea.

    "Why?" I asked.

    "Cops are bullies," he responded.

    And indeed they are. They lie all the time, they intimidate people all the time, and they treat everyone as a violent perp. (Except if you're rich or politically connected, of course.) Like the rest of the military-industrial complex, they are out of control.

    There used to be cops who were exceptions to this young man's "bully" statement, but they have been vanishing rapidly. Cops are routinely taught to intimidate and lie.

    What Dooms Them

    So, while things look absolutely horrible at the moment, the rug is being pulled out from underneath these wastrels.

    The issue here (as it so often is) is fiat currency. The money for all of this War Welfare has NOT come from taxes. Instead, it has come from deficits, a.k.a. money printing. The problem is, the money printing game is sputtering. And without a strong money printing program, future increases in military spending will have to come from increased taxes -- and there simply isn't any more to be taken.

    American workers already have about half their money taken from them. The now-denuded middle class is surviving on food stamps, disability payments, and a dozen other programs that dish out federal money. They've undergone a long, hard fall, from working machines to working government programs.

    Their Choices

    The military-industrial-intelligence-law enforcement complex has only a few choices left in front of it. (Aside from rational things, like giving up their immoral and abusive game.)

    Those choices include:

    1. Find a way to legitimately juice the economy. (Good luck.)
    2. Make people want to be poorer. (Again, good luck.)
    3. Act like Stalin and terrorize your populace openly. (Americans still have guns.)
    4. Create a really, really scary foreign devil. (A tough sell these days, but not for lack of trying.)
    5. Create an iron-clad, world monetary system and government. One that can feed them no matter what. (Probably requires a nuclear war first.)
    6. Create a truly scary war, with piles of dead people in US cities. Then folks will be frightened enough to hand over the rest of their money.
    7. Down-size: Work with their politicians and bankers to dominate only the major cities, the major corporations, and those who will live as dependents to the system. Abandon most of the rest and stop meddling in all the world's affairs.


    The one other possibility for them is to convince the Fed to print faster and damn the consequences. And they may choose that option first, since it would allow them to kick the can just a little bit further down the road.

    But once that's done, they'll be right back to these seven choices.

    Paul Rosenberg
    FreemansPerspective.com




    ~~~~~~~~~~~~~~~~~~~~~~~~~~~


    Eisenhower Predicted Obama | Real Science
    http://stevengoddard.wordpress.com/2...edicted-obama/

    He predicted that the same corrupt scientists would control public policy.


    In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together.
    [...]

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