There are undeclared wars going on all over the world today.
No, I’m not talking about simple border disputes in Africa or our ongoing operations in Afghanistan. You won’t hear about these wars on the news, though some of the world’s leading countries are involved. In fact, it’s very likely that the U.S. is involved in at least one of these “wars” right now.
That’s because these conflicts are operating in the fifth domain of war: cyberspace — the latest battlefield after land, sea, air and space. I’ve noted in these pages before — war isn’t strictly kinetic anymore. The limit of an army’s reach is no longer the range of its biggest gun — a navy’s striking range is no longer measured in the miles its missiles can fly.
In the fifth domain of war, invisible signals race back and forth through wires and circuitry in an attempt to gain information or disable key systems. Professionals in the cyberwarfare business often refer to these programs as “computer network operations,” or CNOs, for short. And there are more “cyberwarriors” each year.
Descriptions of cyberwar read more like science fiction than the annals of military history: Offensives jump off at the stroke of a key. The sentries are firewalls, encryptions and passwords. Viruses drop behind enemy lines like guerillas and sow confusion.
It’s a whole new way to wage war, and one that some predict will dominate international relations in coming decades. In fact, the increasing importance of cyberwarfare could well shake up the existing balance of military power around the globe.
How can politicians and generals resist? With plausible deniability, it’s as close to war without risk as the military can get. Need to shut down a rival country’s secret weapons program but can’t penetrate their airspace undetected? Drop a virus instead of a bomb! That’s the kind of option policymakers and warriors have on the table now. It’s a whole new ballgame.
Indeed, some experts say the wars of the future will be fought only with special forces operators and computer programmers. However, until we figure out a way to profit from the Navy SEALs, I’ll stick to talking about the latter — cyberwarfare and the profit opportunities it gives you, the investor.
Cyberwarfare is a $55 billion industry. It’s also America’s fastest-growing industry, set to double in the next 12 months. One recent study characterized cyberwarfare as “the ultimate asymmetric weapon” — I like “the fifth domain of war” better.
One of the biggest challenges that emerges in taking war to the fifth domain is that cyberwarfare capabilities offer a powerful and immediate force multiplier for rogue states. Countries that previously posed little threat when judged by conventional military standards, such as Iran, now pose much larger ones. This is a huge shift: Remember, Iran doesn’t possess adequate conventional military force to directly challenge its regional enemies Iraq and Israel, let alone global enemies like the United States.
Iran’s conventional military doesn’t rank in the world’s top 10. Despite having more than a million men under arms and several thousand armored fighting vehicles and combat aircraft, it’s doubtful that it could survive a conventional war. In fact, it barely did against Saddam Hussein’s forces in the 1980s, which were in turn smashed by NATO forces in one of the shortest wars in modern history.
Yet a recent cyberwarfare study by the Atlantic Council, a beltway think tank, classified Iran as a tier-three cybermilitary. That means it’s capable of causing significant harm to civilian networks within the U.S., if not in the government. What a jump in capabilities for this fourth-rate military power halfway across the world! On its best day, Iran could hardly hope to sink a single U.S. Navy warship, but with its growing cyberwarfare capability, suddenly, it’s a real threat.
But the practical anonymity that makes cyberwarfare the perfect way for rogue states to attack the U.S. and its allies also makes it the perfect weapon for democratic countries too. Now, without a mandate for “boots on the ground” warfare or U.N. approval, they can launch pre-emptive or retaliatory strikes against these threats. They go from being front-page news to wink, wink, nod, nod.
Most recently, it’s become known that the destruction of Iran’s latest nuclear testing facility was carried out in the fifth domain by a virus call “Stuxnet,” reputed to be a joint operation between the United States’ NSA and CIA and Israel’s military. This was the first time a virus did significant physical damage to a military facility.
We should expect to see more of this type of attack in the event that a “cold” cyberwar heats up. In fact, recent developments have increased the likelihood we will. I’m talking about the Pentagon’s black budget. If you haven’t heard about the black budget, that’s because it’s normally been talked about behind closed doors… until now.
Just this month, The Washington Post released information it received from the renegade whistle-blower Edward Snowden about the U.S. intelligence community’s funding for secret projects. It’s been dubbed the “black budget.” What they found was startling.
The 178-page report they received details exactly how the intel budget will be portioned out — I’m talking the who, what, when, where, etc. In case this isn’t clear: This information has never — I repeat, never — been made public before! At least it’s never been intentionally made public before.
The last glimpse the public got into this shadow world was in 1994 when a congressional committee accidentally released a detailed budget to the press. Using that as the last known benchmark, the changes made over the last two decades reveal a seismic shift in the 16 U.S. intelligence agencies’ priorities, their pecking order and a lot about the U.S. military-political strategy as a whole. Let’s focus on two points.
The CIA — the spearhead of intel “offensives” overseas — which received just 11% of intel money in 1994, will receive a whopping 28% of the “black budget” in the next fiscal year! That’s even more than what the NSA will get.
Click to Enlarge
Looked at this way, it’s a shift from defense to offense. With terrorists harder to find than ever and rogue states to worry about, we’re in cyber “seek and destroy” mode now. That’s my second point: Cyberwar is where funding is shifting to.
In fact, cyberwarfare-related activities will receive more than $4.2 billion, according to the Post’s breakdown. That’s nearly 10% of the whole intelligence community’s budget! My, how times have changed from the early days of the Internet.
The bottom line is that our military planners see the next big threat coming in the form of an attack on the computers that run our country, and they’re preparing. These revelations can and should move markets… At least if you’re paying attention.
That’s because when the government wants to expand its cybersecurity programs, develop new capabilities or shore up its networks’ defenses, it relies on private cybersecurity companies to do most of the heavy lifting. They’ve got “the right stuff,” to borrow a phrase, and they’re for hire.
for The Daily Reckoning
P.S. Eight days before the greatest leak in U.S defense security history, I predicted that we were going full steam ahead into this “fifth domain of war.” Now, I’m revealing exactly who stands to benefit from it. Earlier today, I gave readers of The Daily Reckoning email the opportunity to discover exactly who I’m talking about. If you didn’t get that email, not to worry… The report I shared with them is still available and will likely make another appearance tomorrow. Simply sign up for The Daily Reckoning, for free, right here and watch your inbox around 4 p.m. tomorrow for all the details.
America's most precious resource isn't oil, natural gas, gold or any other commodity. But it travels through an extensive pipeline that, if severed, could signal an unprecedented breach in U.S. security. What is this pipeline, and why is it so imperative that the U.S. take steps to protect it? Byron King explains...
Byron King is the editor of Outstanding Investments, Byron King's Military-Tech Alert, and Real Wealth Trader. He is a Harvard-trained geologist who has traveled to every U.S. state and territory and six of the seven continents. He has conducted site visits to mineral deposits in 26 countries and deep-water oil fields in five oceans. This provides him with a unique perspective on the myriad of investment opportunities in energy and mineral exploration. He has been interviewed by dozens of major print and broadcast media outlets including The Financial Times, The Guardian, The Washington Post, MSN Money, MarketWatch, Fox Business News, and PBS Newshour.
WW III has been going for some time now. However, it’s been called the “silent war” for a reason. It’s been fought in cyber and currency. Now, all we need is the right trigger (Syria) to escalate it into a *hot* war.
Electric cars are proving to be far cheaper to operate than anyone could have guessed. In fact, many people are now just getting the equivalent of thousands of mpg to their electric cars. And that's presenting a unique profit opportunity. Stephen Petranek explains...
The world's most successful investors almost always think differently. That's nowhere more apparent than when you're trying to invest in health care. Today, Paul Mampilly - one of the world's top biotech analysts - reveals one "secret" for making money from a predictable cycle in the industry. Read on...
America's shale boom shows no signs of slowing...and there's still massive profit potential in U.S. oilfields. Matt Insley offers an inside look at an exciting opportunity in America's next big shale play…
Right now, the city of Buffalo, NY is covered in five feet of snow. And while that may be bad news for those poor folks, it could be good news for you. Because now that another harsh winter is upon us... you have a massive opportunity for quick double-digit gains. Greg Guenthner explains...
Warning: The following article is not for the puritanical. Today, Chris Campbell shows you three "dirty" health boosters you can use tonight to raise your immune system... improve your outlook on life... and make your partner a happy camper. Read on...
When some event - be it a terror attack, financial panic or natural disaster - upsets the status quo, people are more willing to relinquish their freedom in favor of a greater sense of security. And that's when ambitious political leaders make their move... And as Jim Rickards explains, another such event could be right around the corner. Read on...