Surviving Financial Terrorism
and Warfare Disasters...

Experts Say That Within This Decade a Major Financial Terrorism Event Will Likely Occur!


Today, we have man-made terrorism and financial disasters to deal with and survive. We've discussed surviving both on this site. Now let's talk about a hybrid of these two types that face citizens globally--financial terrorism survival! Up to now, no one in the Federal Government has been paying attention to this idea until early this year. Now it has finally started to move "front in center" for the Pentagon and Homeland Security as well as Congressional investigation committees.

Why now, you may ask? Well, there isn't really a governmental group set up with this charter focus, staff expertise, or budget. The government's focus has been on physical, man-made attacks rather than various forms of monetary attacks. What do we mean?

The governments of the world are spending great sums of money on airport and harbor security to avoid another 9/11 event or something worse. They are focused on the man-made attacks by terrorist as mentioned on this site. These involve physical impacts-bombs, hi-jacked planes, biological diseases, chemicals and nuclear attacks, grid destruction, and the like. But, financial terrorism and warfare deals with destroying a country's ability to carry on economic trade transactions of many different kinds and at many different levels. Destruction or serious compromise to economic transaction ability of a country, has the potential of becoming very systemic downwards and can radiate outwards to other countries seriously damaging their economic transaction abilities also. For a chilling revelation, see the Washington Times report in the Credits Section below.

Every since 9/11, my concern about financial terrorism and financial warfare began to evolve. For example, if I were a terrorist bent on destroying a country's well-being, causing great fear, or financing my terrorist operations, why meet force with force where the enemy is confronting my actions in many different ways. Why not take the intellectual and more sophisticated approach of doing what "white-collar" criminals do and go where no one is particularly focused? Compromise the computer systems of a critical national/international corporation or a government agency for either of several purposes-

  • Destroy a critical system of an important global business bringing down critical enterprise operations and ultimately affecting many other businesses on a global scale.
  • (Think large financial companies or Wall Street trading platforms of the DOW or NASDAQ)

  • Get on the inside of certain corporations and build software "backdoors" into their critical, public facing systems involving mega money flows and siphon off serious money while covering your tracks by compromising the audit control systems.
  • Do number 2 above first and when desired, cover your tracks by executing number 1. You've taking all the money you can, now wreak havoc and just destroy the critical systems causing widespread damage.

For example, one international credit card company has been touted as being one of the top 10 computer intensive businesses in the U.S. This means, for example, that if their systems for credit authorization were to fail for more than two or three days, they would be out of business globally. Or, if their service establishment systems or internal financial systems were brought down or compromised so that trade or financial processing couldn't occur, they would have to shut down operations. Their footprint on global sales and purchases would have an enormous impact on the world's commerce until an alternative could be substituted. Even then, the surge on transaction bandwidth would be difficult to transfer to other companies to deal with for some period of time until additional resources could be acquired and configured. And, this particular company isn't even the largest of the major credit card firms.

Then there is another approach that many governments and global businesses are becoming painfully aware of-computer "hack attacks". Here skilled computer wizards driven by curiosity, challenge, or for devious purposes, find ways past computer security systems and typically steal customer or critical corporate information and the like for personal benefit.

Then you have the foreign entities of government spies or military groups desiring to wage cyber warfare on other governments and global companies. They strive to compromise military defensive systems, obtain government or trade secrets, or hide destructive viruses in critical, infrastructure utility systems like the electrical grid or communication systems. (Think of the recent Stuxnix virus attack and the extreme compromise of Iran's Bushehr nuclear plant that seems to be traced back to either U.S. or Israel sources.)

Now it is being suggested that some form of financial terrorism was behind the 2008 Economic Crash. Others dispute the idea but the threat remains. How would they know, either way, if the attackers were cleaver enough to cover their tracks. It is certainly not impossible, especially if no one is positioned to audit the systems involved.

My background is in information technology or IT. In the past 30 years, I specialized in futuristic software architecture, tools, and methodologies looking 10 years into the future for enterprise competitive advantage. Additionally, we designed business intelligence databases and performed disaster remediation consulting for a number of well-known, Fortune 500, multi-national, corporations. These skill sets are particularly well suited for the subject at hand-financial terrorism and warfare.

After retiring from a well known credit card company, I went on to develop other skills with international firms but I would be invited back on occasion, on a contract basis, to help my old firm with some of their large, global financial systems. It was through these contract visits that I began to become aware of several dangerous trends developing that had never been the case before. For example,

  • The demographics of the workers had changed from highly experienced, white male American workers to about 80% East Indian contractors and 10% American women with mixed levels of experience. Although this workforce was very dedicated, articulate, bright, and hard working, they were still quite young and inexperienced in a large corporate IT setting. (However, I don't think, I knowingly, encountered anyone that was from Pakistan).
  • The "on-shore" people here in the States only represented the tip of the iceberg when compared to the "off-shore" contingent where the bulk of the corporation's IT system creation, maintenance and support was being handled daily.
  • Additionally, I became aware that the concepts of good software development practices that employed independent unit testing, quality, rigorous test cases, and regression testing of new or changed software systems was being cut out of the development methodology and process. The company was always under pressure to get new systems out the door ahead of the competition. So, to save costs and compete in the marketplace, management only gave lip service to these kinds of things.
  • Over time, these East Indian individuals gradually began to learn the systems well enough to be put in charge of its execution and software maintenance with little detail oversight from American workers.
  • Automated peripheral support systems were not designed but rather more primitive, manual update mechanisms were utilized to change critical data tables. This meant that if something or someone didn't do their thing at the right time, system tables didn't get updated and synchronized with business processes and other related systems. (One case involved someone missing a manual update of a table without any audit checks which cost the company over $2,000,000 just over a weekend before it was caught the following Monday! Rather than admit that this accident occurred to the public, the company just "ate" the cost and covered it up.) This often occurs with white-collar fraud. They refuse to prosecute the criminals involved to prevent the knowledge of the security breach from reaching the public through the course of a trial.
  • Additionally, in order to lower the company's overall development costs even more, they were allowing the East Indians to begin designing the databases since this was a high cost to the business. The designs were atrocious and primitive because it takes years of understanding the business and encoding the business rules for data driven systems. Accountants could never recognize the danger in allowing non-Americans to gain control over the design of the corporate databases which represent the "crown jewels" of the business.

    This last area of expertise and involvement completes the entire loop of the system design and lifecycle. Without citizen, audit oversight and insistence on maintenance of system documentation, this knowledge becomes encapsulated in the minds of individuals that may not have the corporation's best interest in mind. If foreign contractors can gain control of several correlated systems within an enterprise, collusion can result in even wider scale compromise and terrorist benefit.
  • For example, if money can be made to be deposited by a system into a foreign bank account through a backdoor hook in the system and the associated audit system can make everything look like it was deposited into the right accounts and everything is fine, it may be several weeks before an error is discovered if at all. All money are just digits anyway.

  • Lastly, documentation of new or changed systems began to be compromised. English being their second language, these contractors tended to avoid producing quality and accurate documentation about the systems. This will eventually bring systems to a point of extremely, high maintenance costs in the future and gives great rise to system failures which can be very costly and embarrassing to the firm when the competition or the public becomes aware of it.
Having been an enterprise system architect for a number of years and having worn many IT hats, I have experienced and witnessed these dangers first hand. For example, here are two of many case histories where I've both seen and doucmented how enterprise systems become compromised by the natural order of system maintenance or by deliberate sabotage if the occasion presented itself with the right people.


Several years ago, I contracted as a consultant to a large, national mortgage company that was trying to get into the international, mortgage servicing market. My job was to evaluate why their system development was so costly and took so long to achieve. My findings showed that this company tried to save money by outsourcing much of their systems development to outside contractors over the years. Because the systems became less accurately documented over time from the internal staff, the contractors would always exceed their bid estimates because of the existing poor documentation. They barely had time to complete the core requirements at a functional level let alone enough time to document their work. They were pushed out the door before they had a chance complete quality work.

This represented vital corporate intelligence leaving the business through an ever revolving door. Over the years, this cheap labor strategy model "snowballed" into a system maintenance nightmare until making one simple screen change for an international bank customer cost over $50,000 and took 3 months to implement! And even then, the change was never allowed to be implemented because they found, at the last minute, the change was made to the wrong part of the undocumented system!

I presented my research to two senior managers of the European effort, predicting that if they didn't get their systems properly documented, they would continue to have high system costs and failures. After two weeks after releasing my report and not hearing anything I thought they had dismissed my report and put it in their "round file". Then we got word that the two senior VP's quit! A few days later, we heard that the company lost their key, overseas bank customer and had to withdraw from Europe in embarrassment, laying off the many hundreds of people they had just hired to work in Europe.

I then decided to leave, seeing nothing but future nightmares for this company and its IT people. Several years later, this company failed nationally in one of the biggest mortgage boondoggles on record and was purchase by Bank of America-boy did they buy a mess!)


Several years earlier, a similar thing happened to Shearson-Lehman Brothers when the C-level people decided to lay off their very experienced IT people to "save a buck" and to outsource their IT systems work. What they didn't realize was that these people kept the knowledge of their systems in their heads for job security and never documented much of anything. After several months and many system failures, the C-level people hired back the same people at double their salaries, but it was too late.

This was a subsidiary of a parent firm that I worked for and this subsidiary cost the our parent company over a billion dollars in one year alone because of the debacle. They were sold the following year and from there they also were part of the financial fallout on Wall Street during the great financial disaster from 2006-2008.

We could go on but these are enough examples. But, what are we saying? When we pause to think about the state of the computer systems in many of the nation's "finest" corporations, we shudder as to how they keep them running for as long as they have without great damage to their enterprises and their customers. But, when we see the outsourcing model being used to save money, we can see great opportunity for enterprise destruction and embarrassment. We know this first hand because we audited the software systems of many big name firms that brought our firm into evaluate their risk profile for the Y2K period. Although we were focused on dates, in particular, we couldn't help but notice the low quality of their core computer and support systems and especially their system documentation which is critical for fast and accurate human understanding. All of these systems were aging and suffering from the Second Law of Thermodynamics!

It is easy to see why the cooperate Goliath giants can be taken down by little David's with newer, better systems technology, quality documentation, and better business models more adaptable to change. This competitive paradigm is constantly changing and when it does, everything is reset to zero-the old rules no longer apply. Think of the Swiss mechanical watch industry and the electronic watch market entry!

Many corporate systems are rife with opportunities for sabotage and destruction. If they don't implode upon themselves, their maintenance costs will gradually drive them out of business.


It would appear that there are many different ways to classify financial terrorism or financial warfare. But, here are four primary methods:
  • External "hacker" attacks to steal information or money, compromise systems, or outright sabotage by viruses.
  • Internal white-collar attacks to do the same as th 1st item above but do it more effectively and over a longer period of time.
  • Gaming trade systems and methods for profit or wide scale damage to economic transactions within or across countries.
  • Dumping of financial instruments to create global economic chaos.

We've already discussed 1). and 2). The 3rd category involves "flash crashes" like what occurred on the DOW not too many months ago when it suddenly dropped a 1,000 points in several minutes only to regain much of it back several minutes later. As yet, no one has clearly shown what caused this and how it occurred. What makes investigation difficult is the secrecy behind global banking and finance because identity protection laws of each nation. If it was a covert operation from an enemy nation, it would be even more difficult to determine the attackers and their precise methods since they would be more professional than most hackers. To date, indications are that the Russians and especially the Chinese seem most active in probing U.S. business and government systems. No one knows for certain that viruses or software hooks are not already in place waiting for the appropriate timing by an enemy country to be triggered in conjunction with other forms of national attack.

The 4th concept involves a government entity or collusion by several to manipulate certain financial actions to bring down a country's economic system. For example, what might happen if China became disturbed about the U.S. supporting Taiwan and they decided to dump the trillions of dollars of bonds or Treasury notes onto the market. This would be devastating to the U.S. but it would also be devastating to their exporting economy since the U.S. is one of their largest customers. This ultimately would bring enormous civil unrest to their economy and they would have their hands full managing that, unless of course ,they clamped down heavily on their citizens before they decided to do this. (Like they are doing as we speak because of the Middle East uprisings and North Africa.


Given the known facts about the high risk levels of financial systems today and the lack of focus on the part of corporations and governments on this issue at this late stage, it is highly likely that we will experience some degree of financial terrorism or warfare in this decade. The high level of high-speed interconnectivity of financial systems within and across nations could cause the right scenario of a financial terrorism act to spread in a domino effect globally. Who knows where things might end?

Kevi Freeman, a financial analyst when interviewed by the Times said: "The new battle space is the economy. We spend hundreds of billions of dollars on weapons systems each year. But, a relatively small amount of money focused against our financial markets through leverage derivatives or cyber efforts can result in trillions of dollars in losses. This is the equivalent of box cutters on an airplane."

We would suggest that it could be far worse than bringing down two large skyscrapers-these acts, if properly, focused and timed could collapse a nation's entire economy and maybe take down other nations as well.


It would be difficult and speculative to be able to gauge the prospect of when, where, and how such events might occur. Therefore, perfect planning would be next to impossible other than to imagine the worst scenario possible and plan around that and hope your plan and resources can bridge your survival until things can be restarted again. So, what are we talking about?

The level of planning and preparing for a financial disaster is highly dependent on your imagination, economic resources, and risk tolerance. Not everyone can do everything because of constraints in your life such as your location, job, or available money. But, you can plan to improve your survival odds by doing something.


Because financial payment system may become compromised nationally, there is a high possibility that supply chains for food, fuel, and products could be heavily disrupted for a season. This list factors in supply disruptions. So, if resources were not a problem for your family, the ultimate plan would include most of the following:
  • A safe location to live at least 100 miles from any major city. Either live there as a primary place of residence or allow your safe place to be your "bug out" place to go to "when things go south". Think vacation home.
  • Your residence or "home away from home" should be in a small town and you should be surrounded by friendly neighbors on a cul-de-sac lot. Hopefully, they are armed. Neighbors can provide mutual protection for each other and the street access can be blocked and protected to keep the bad guys out. In the worst of times, you best not be isolated from support because you can't overcome even a moderate number of gang members and you can't remain vigilant 7 by 24. You'll need someone to "get your back" at times of confrontational stress.
  • Material resources should include:
    • A year's supply of food not requiring refrigeration. The first level would be what you would have in the refrigerator and freezer, then your canned and bottled food, to take your through 3 months, and finally long-term storage food packed in air-tight, bug-proof containers of 1 and 5 gallon sizes to get you through the rest of the year and to give you a chance to start gardening.
    • An available supply of drinking water. An extra hot water tank is an excellent source for backup water. Depending on the nature of your town water supply you may need to plan for additional storage using 55 gallon, food-grade containers. If you're lucky to live in a town that has quality ground water that's a real positive. Any well pumps will, hopefully, have generators for each should the grid become compromised. In any event, you should have a powerful filtration system available for backup should the supply sources become unsafe. (We would recommend the Big Berkey with several ceramic filters because it is quite portable. Missionaries use this kind when in third world countries with terrible water sources. We acquired one several years ago and we love it.)
    • Non-hybrid, vegetable seeds for planting a garden should things stay down longer than a year. Include fertilizer and garden tools.
    • Medical prescriptions and supplies to last a year.
    • Money or money equivalents. Access to money sources may dry up immediately or shortly thereafter. Bank runs and closedowns, withdrawal limitations, bank holidays are reasons to be prepared to have enough money available for you medium to long-term needs. Check out this 2011 video at a Wells Fargo bank where a customer was shocked about how little cash the bank had on hand and why the bank had this challenge-

      Getting Cash at a Bank Can Be Challenging Even Today:

      • Easy access to a minimum of $10,000 in cash in small bills and a $1,000 in coins-preferably at home in a well hidden safe.
      • Easy access to $25,000 in gold and silver 1 oz. bullion coins. Again this would best be on-site in the home in a secure, hidden safe.
      • More than one type of credit card should one company become unavailable.

      You could use the teller machines daily to extract your cash without drawing attention to yourself or the banking staff.

    • Self protection--dependent on your mental profile, physical strength and agility, and desire to learn.
      • A complete home alarm system with glass breakage and motion sensors.
      • A perimeter lighting system with motion sensing.
      • An alert dog. Dogs are great for detecting sounds. Large dogs are a deterrent to intruders.
      • A quality, semi-automatic handgun and 500 rounds of ammunition.
      • A good shotgun with 500 rounds of ammunition.
      • A semi-automatic rifle like the Mini-14 Ruger with several clips and a 1000 rounds of .223 ammo. A reasonable scope would be a plus.
      • Learn how to use them correctly and accurately. (Open or concealed carry permits are location dependent but not a problem in most western states). (If your not familiar with using guns, get some training thru the NRA. If you are not familiar with the laws regarding guns and self defense, take a course through a local gun trainer or the NRA).
      • Wasp spray-better than mace and sprays up to 10 feet and its cheaper.
      • Some form of martial arts. Would recommend Close Combat Training which are techniques used by special forces which are better than martial arts and can be used by the whole family.
      • First aid training and supplies. Check with your local Red Cross.

    • Transportation
      • Couple of bicycles and tire parts in case gas is unavailable.
      • An ATV or Cushman scooter if gas is available but very expensive.
      • Economical car or small pickup. 4 wheel drive would be a plus.
      • Extra tires, oil, filters, and critical spare parts.

    • Communication
      • Satellite TV.
      • Radio, battery/solar powered radio, and short-wave radio, pair of walk-talkies.
      • GPS device. A quality compass wouldn't be a bad idea should GPS become faulty.
      • Internet access and computer.

    • Alternate fuels for heating home which would include-
      • On-site propane via tank storage in case utilities run out of supply.
      • Propane or natural gas line from utility company,
      • Electricity from the utility grid and backup from on-site solar banks with generator, inverter, and battery bank setup.
      • A fireplace with a year's supply of dry wood.

Above is a nice setup which employs a propane/natural gas generator which can be fueled from either a utility line or an onsite tank. This unit is a Kohler Command 18. It generates 18-26 HP which produces 110/220 volts at 60 Hz and can generate 8.5 kW/kVA. It uses a horizontal crankshaft. This is integrated with a Trace Inverter /Charging System, AC Breaker sub-panel, and battery bank. This unit creates a perfect sine wave current which is needed for Intel based computers and other devises like laser printers, clocks etc. to maintain longevity and accuracy.

This system can handle ALL 110 volt circuits with active loads turned on at the same time for a home of 2,200 square feet plus garage. The setup is so quick that when grid electricity fails, this system will switch to the backup system so fast that the computers and TVs don’t even blink!

    • Tools and Self-Help Books--
      • For household jobs.
      • For auto mechanical job.

    • Miscellaneous
      • A year supply of all sizes of alkaline batteries and a tester. The tester should be able to evaluate all types of batteries. Don't forget medical-needs batteries.
      • Light bulbs for a year-include various kinds and sizes for home.
      • Gas laterns, kerosene lamps, and even some candles for ultimate back up for lighting.
      • Matches.
      • Gloves
      • Clothing

    • Vitamins for everyone for a year especially--
      • Vitamin C 500mg
      • Vitamin D 5,000 mg
      • Aspirin and Ibuprofen

    • Toilet paper
    • Barter items-wine, liquor, cigarettes, etc. even though you don't use them perhaps, others will prize them highly.

The list above is a starting list of the basics. Use your imagination and supplement these suggestions with ones of your own to meet your own preferences.


For those without unlimited resources and for those having other distractions in your life, you still have options to improve your situation.

Suppose you are an urban citizen in a large city required to stay near your job(s). You could possibly choose to leave and go to a safer area where you have relatives better situated and would be willing to work with you on staying in the area until things improve. You would want to bring your own stuff though, and not become a hardship on your relatives. They have resource needs also and they can't take care of everyone. Pre-discussions and planning with their involvement would be essential. In this situation, you would probably store a subset of things at both places and upon leaving the city, bring your supplies with you to supplement your offsite supplies that you worked on over time buying what you could with your more limited funds. But, look at the list of items above and pick and choose what you could best afford that would give you the most "bang for your buck". Think of alternatives and substitutes that may be cheaper but would serve your purposes.

If you didn't have anyone like a relative or a really good friend where you could stay within a safer area, you might consider a travel trailer with a vehicle equipped to pull it to a safer area and rent a spot for a season. The issue here is the danger of getting robbed and having enough supplies to handle your needs for a year. But, safety should be your first priority and deal with things as they occur on a day-to-day basis.

We read the experiences of a small family forced to live in Argentina during their financial debacle and hyperinflation a decade ago. Fortification of the home was very important as well as having a revolver available at home and on the street going shopping or to work even though it was against the law. (They found out that criminals didn't pay attention to the law and had guns and knives anyway). Situational awareness became supreme when on the street and skills for not looking like a "victim waiting to happen". Something as simple as body positioning and body English kept a person from becoming a target for robbing or worse. It was also interesting that money wasn't the only thing of value. Some things were more prized than even money when it came to bartering. Things like a safety razor became very important to many as well as ammunition!


If you are alert enough to hear about serious financial things occurring, you must first ensure that you get accurate information upon which to act. Then assess the information and take action accordingly. The one thing you may want to do if you think your bank will be affected, is to get to your bank and get additional money either at the teller or teller machine although you will be limited to withdrawals at the machine. It might not be long before the bank will set cash withdrawals limits or will shut down completely until things improve. In all instances, you'll want to "beat the crowd" to the supplies before things become rationed or unavailable. If you have things in a safety deposit box, you'll want to get them out before the bank takes a "holiday".

Then head to the food store and top off your food supplies while you still can. You'll learn real quick if the financial threat affects your ability to pay for your food, so be sure and have enough cash to cover your purchases. Cash will move to the head of the line in times like these! Checks and debit cards may not work either if the store can't verify your bank checking account balance. Credit cards can possibly suffer the same fate of your credit card company cannot verify/authorize your transaction. That's why it would be good to have two different credit card types.

Once you have your food, keep a quiet and present a low profile. Next, head for home or the gas station. If you have a mate, hopefully they went to the gas station while you went to the grocery store. Be sure you have enough cash at the gas station also to top off the family car gas tank(s). (Might pick up a couple of locking gas caps to slow down folks using an Oklahoma Credit Card in the future when your cars are not in the garage. It might be worthwhile to have some additional gas storage containers and get them filled also but don't give people around you the idea that you're hoarding. To each gas storage container, add some gas stabilizer like Sta-Bil to extend the useful life of the stored gas for up to a year.

Gather all family members at home and prepare for potential events as they evolve. If you're in an urban environment, with a place to depart to if things get too dangerous in the city, you will need to monitor the safety situation constantly and be ready to make the decision to depart.

If you have to stay where you are for lack of alternative resources or you never prepared enough in advance, you'll need to "hunker down" within your home and be alert for negative events. If you've cultivated good neighbor relationships, it would be prudent to begin talking about a neighborhood watch effort and pulling together for mutual protection should the crime situation increase based on news reports or firsthand experiences.


If and when things return to normal, hopefully, you will have been paying attention to all events that might affect you directly or indirectly after a financial catastrophe has occurred. It's the indirect events that you need to have an imagination for so you can more accurately envision "what-if" scenarios and position yourself to deal with each occurrence appropriately if and when they should occur.

Many of the things that could unfold during a financial disaster, either through an act of terrorims or warfare, are unpredictable in terms of how widespread or how deep financial activities would be impacted. Much depends upon what is successfully targeted and how well the impacts can be contained to prevent domino affects, if at all. Events of this type have never been experienced by anyone to date but the conditions are ripe for exploitation. We belive it is just a matter of time. And, if war should breakout between several advanced nations or triggered by a current rogue nation, it would be fairly certain that financial warfare will be on the leading edge of the war's initiation.

So, much of what happens during and after a financial disaster triggered by terrorism or warfare will depend upon people's skills of "figuring it out as they go a long". How well you envisioned things and resourced for them will determine how well you can deal with the scenarios you might become faced with.


None at this time.


None at this time.


For a current discussion on this topic please read the following article from the Washington Times by Bill Gertz, Feb. 28, 2011. (The link may not exist for more than a month)

Financial Terrorism and Warfare:

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