Chapter One Scattergoods From November 1918 down to the present day, no frontal challenge to state power has ever succeeded in any Western state. --Adam Tooze, The Deluge (2014) History is the first casualty of media's microsecond attention span. An army of pseudo-savants saturate the airways to explain that tariffs are bad, trade wars hurt growth, and mercantilism (the art of accumulating reserves) is a throwback to the seventeenth century. These sentiments come from mainstream liberals and conservatives and tagalong journalists trained in the orthodoxy of so-called free trade and the false if comforting belief that trade deficits are the flip side of capital surpluses. So what's the problem? The problem is that perpetual trade deficits have put the United States on a path to a crisis of confidence in the dollar. Capital surplus is a euphemism for excessive debt issuance by corporations and the Treasury. Zero tariffs are an invitation to outsource manufacturing and destroy high-paying U.S. jobs. Mercantilism makes China the fastest-growing major economy, while free trade leaves the United States to languish with depression-level growth. The cherished verities of liberal economics are mostly junk science; a thinly veiled stalking horse for the real goal of global governance and taxation in the name of globalization. A visit to the history section of a library reveals liberal hero Alexander Hamilton was a staunch protectionist who nurtured U.S. industry with bounties, tariffs, and other obstacles to free trade. Progressive icon Teddy Roosevelt supported the gold standard and a strong dollar. Our first globalist president, Woodrow Wilson, wanted globalism not based on integrated supply chains, but on U.S. hegemony over authoritarian Germany and Russia and imperialist France, Japan, and the U.K. Wilson's way of achieving this was not with arms but with gold, dollars, and Wall Street credit. Conservative champion Ronald Reagan imposed such high tariffs on Japanese cars that they moved their factories to Tennessee and South Carolina, where the factories remain today. In fact, America's greatest periods of prosperity were associated with tariffs and mercantilism until the 1990s, when debt and war became all-purpose substitutes for investment in U.S. factories. Now the debt boom is dying, a day of reckoning approaches, and false economic nostrums won't save us. This conundrum between what works in practice (protection and mercantilism) and modern miseducation (free trade and globalism) must be solved to secure the future strength and stability of the United States. There is ample room for smoothing the rough edges off mercantilism, but only if clear-eyed and historically trained negotiators are assigned to the task. Soft-power globalists are happy to see the United States in relative decline as long as "the world" is better off. The problem is that most of the world is violent, authoritarian, unethical, and inimical to U.S. values. Enriching China at U.S. expense is not just a weak globalist trade-off; it finances concentration camps and industrial slavery. Globalist champions such as Jeffrey Sachs and Mike Bloomberg are in deep denial on this, yet it's true. Resolving this conundrum requires talents that range far beyond economics. The quandary can be addressed only by combining experts in geopolitics, history, sociology, law, and complex dynamics. This kind of high-level expert integration with a view to national security is an unsung strength of the Central Intelligence Agency. In this fashion, we turn to the CIA for an inside look at how the United States is using centuries-old tools to meet the twenty-first-century threat from globalization. A House in Langley Woods CIA headquarters is a secure compound, with admittance tightly restricted. Yet the location is not secret. The main entrance is on Virginia Route 123, also called Dolley Madison Boulevard, about a mile off the George Washington Parkway, not far from the Potomac River's south bank. As if to confound the casual inquirer, most guideposts around headquarters seem to have three names. Dolley Madison Boulevard is shown on some maps as Chain Bridge Road. Reporters frequently refer to CIA headquarters as "Langley," yet there's no such town in that part of Virginia; headquarters is located in the town of McLean. The initials "CIA" do not appear in the official headquarters name, the George Bush Center for Intelligence. These double and triple namings seem in keeping with the CIA's main mission of deception. Any driver can turn off Dolley Madison Boulevard onto the CIA headquarters access road, yet you won't make it far without an official badge in hand or a visitor's badge waiting for you at the security building near the main gate. If a visitor, you'll be heavily screened before you even get to the gatehouse to pick up your badge. Once inside, the CIA campus has an open, airy feel not unlike a lot of large corporate campuses located in suburban bands around major cities. The architecture is decidedly midtwentieth century; not at all like the twenty-first-century dome and starship designs adopted by Amazon in Seattle and Apple in Silicon Valley. The two main buildings, Original Headquarters Building, OHB, and New Headquarters Building, NHB, are connected at ground level by glass corridors that frame a small park contained between them. Beginning in 2003, I was on the front lines of global financial warfare working at CIA headquarters and in the field. My projects involved insider trading in advance of terror attacks, predictive analytics using market data, and national security implications of foreign investment in the United States, among others. One of the pleasures at headquarters was to wander through the CIA Museum on the main floor of OHB. This could be relaxing during snowstorms when scores of staff were no-shows. As a long-time New Englander, I never considered snow a reason to miss work, yet a lot of Virginia colleagues were paralyzed. Senior management sympathized with the locals and routinely granted snow days just like in elementary school. These days meant canceled meetings, which gave me downtime to explore the hidden treasures in headquarters that most staffers rushed by on their way from one vault to another. Former CIA director Mike Hayden called the CIA Museum, "the best museum you'll probably never see," a reference to the fact that it's not open to the public. The museum is a collation of contributions from private collections, captured items from foreign intelligence services, and the CIA's own resources. One highlight is an ENIGMA machine invented by a German engineer and used by the Nazi regime in the Second World War to send encrypted message traffic to the German military. Polish, French, and U.K. cryptographers eventually cracked the ENIGMA codes, a feat memorably portrayed in the 2014 Oscar-winning film The Imitation Game. Few of the original machines survive; one of the scarce ENIGMA machines in private hands was sold at auction by Christie's for over five hundred thousand dollars. I have been fortunate to see two of the originals, one at CIA headquarters and one at the Imperial War Museum in London. My favorite display in the CIA Museum is a lipstick gun, also called the Kiss of Death. It's a small-caliber, single-shot pistol disguised as a tube of lipstick. A woman spy in a tight spot could casually reach into her purse, remove the tube of lipstick, and kill her target at close range. Near one end of the museum is an exhibit that doubles as a lesson in tradecraft. It's a large black-and-white daytime photograph of Washington, D.C., taken from a high-altitude spy camera. The photograph is about 20' long x 5' wide, embedded in the floor. An inattentive visitor could walk over it and not even notice. A more fun approach is to turn to a guest, point out the photograph, and ask them to tell you the exact date and time of day the photo was taken. The usual first response was "I have no idea." Then the visitor would start to think. The photo shows the trees are bare, so you can narrow it down to the October to March time frame. The parking lots are empty, so you can narrow it down further to weekends and holidays. Right there, you're down to sixty days, which eliminates 85 percent of the calendar. A good start. Next you can look for certain buildings with known construction dates. The Kennedy Center is visible in the photograph, so you can be sure it was taken after 1970, and so on. A more expert analyst with access to public records of building permits in Washington, D.C., could go block by block and narrow down the date to a particular year based on the presence or absence of certain buildings. As for the time of day, once you have narrowed down the possible dates and have an azimuth of the sun on those dates, the shadow of the Washington Monument is the world's largest sundial. Your visitor leaves the museum feeling like they just finished a day shift analyzing imagery at the National Geospatial-Intelligence Agency. Of course, lipstick guns and black-and-white photos seem primitive compared to the digitized, miniaturized, spectroscopic technology available to spies today. That misses the point. The ingenuity on display in the CIA Museum is impressive on its own and conjures up the romance and deadly seriousness of Cold War espionage. Interestingly, old-school tools and tradecraft are suddenly new again. Sophisticated hacking tools and flash drives have made even the most advanced digital systems highly vulnerable. Intelligence agencies are reverting to nondigital devices to avoid intrusions. Recently the Russian FSB intelligence service, successor to the KGB, ordered typewriters for use in preparing internal reports and memos. Typewriters cannot be hacked and leave no digital trails. The brush pass, dead drop, and one-time pads are all back in style among spies and case officers. The inverse of intelligence is counterintelligence, the search for spies aimed at your own organization. The best counterintelligence tool is compartmentalization. Access to intelligence is broken into compartments or cells within the intelligence community. These cells typically consist of small groups of individuals working on a discrete problem. A top secret security clearance including special access programs beyond top secret is not enough to gain access to a wide array of classified information. It is also necessary to have a "need to know," which is demonstrated by a written or verbal application to a security officer. Once the need to know is established, a cleared person would still have to be "read in" to a project by a project director or team leader. Even when these hurdles are cleared, the person seeking access may still have to work with IT administrators to open up the necessary links or pages in the CIA's internal secure servers. This process is repeated every time a new topic is addressed or a new assignment given. CIA personnel are trained to be wary of "social engineering." That's a technical term for simple friendliness to strangers. If you were in line to buy a cup of coffee in a Starbucks, it might not seem unusual to start a polite conversation with the person next to you in line about the weather or slow service or anything else, for that matter. The CIA has a Starbucks located on the main floor of OHB, near the cafeteria. It's reputed to be the world's busiest Starbucks, because it's open 24/7 and has plenty of caffeine-addicted customers with nowhere else to go. It's bad form to chat up a stranger while waiting in line. The object of your inquiry is trained to ask herself, "Why is he talking to me? What does he want? Is he trying to glean information out of his lane?" and so on, as if you were a new Aldrich Ames. This lends an all-business air to daily encounters; not the friendliest workplace environment, yet the social distance serves its purpose. Compartmentalization can be cumbersome and slow, but it works well. The most damaging leaks of classified information in recent years involving Chelsea Manning and Edward Snowden did not come from CIA files. Manning released State Department information, and Snowden's information came from the National Security Agency, or NSA. The CIA has been victimized by internal moles in the past, and will be again, but on the whole, it has done a better job of protecting secrets that some of its sister agencies in the intelligence community, or IC. The darkest agency I ever worked with, and the one most directly involved in counterintelligence, is the NCIX, or National Counterintelligence Executive. That agency is the successor to the work of legendary mole hunter James Jesus Angleton, who headed CIA counterintelligence from 1954 to 1975. NCIX staff are spy hunters who not only look for foreign spies but also look for moles, traitors, and leakers inside the IC. NCIX also hunts down supposed double agents (American spies pretending to be Russian spies who are actually loyal to America) who are really triple agents (American spies pretending to be Russian spies who really are Russian spies). This ontology of deceit and deception is called the wilderness of mirrors. Excerpted from Aftermath: Seven Secrets of Wealth Preservation in the Coming Chaos by James Rickards All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.
