As everyone remembers September 11th in their own way, investors should take a step back and examine the implications of a horrific terrorist attack.
In the case of 9/11, it shut down the financial markets for an entire week and sent certain sectors of the US economy into depression (notably the travel and hospitality industries). The financial markets reeled from the fallout and gold awoke from a decades-long slumber. 2001 marked the first of 10 consecutive years in which the price of gold has risen.
But what of possible future attacks? Such attacks almost certainly won’t take the form of the September 11th attacks. The article linked below examines the possibility and possible fallout from a cyberattack targeting America’s financial system. Such a scenario is not nearly as far-fetched as some would have us believe. The article comes from Rachel Ehrenfeld, a noted expert who heads the Economic Warfare Institute.
The U.S. financial industry, supposedly one of the most closely monitored sectors of our economy, remains susceptible to serious threats. Not all from the outside, either. While the streets will not be littered with bodies, when elements of our financial infrastructure – the monetary system, various exchanges – come under attack, the U.S. economy – and the world’s economy–could be severely damaged and millions of people devastated. Smaller attacks are already being carried out incrementally, yet rarely detected, periodically bleeding the market. The reaction, or lack thereof, leaves the stock market open to an overwhelming attack that is likely to leave the U.S. economy in dire straits for years.
Our financial markets’ vulnerabilities are well-known to those intent on sabotage. Despite an awareness of such threats, the nation’s tools for early identification of financial threats remain limited, as the latest survey of IT security executives concluded. These represented 100 companies and organizations with more than $100 million in annual revenue. Moreover, even when detected, financial-industry cyber attacks go underreported, or unreported, because officials are reluctant to divulge information that could prevent further losses.
The threat of a mega attack on the financial markets, a major factor in America’s economic stability, is very real. Crash attacks via high-frequency trading would further cripple investors’ confidence in U.S. financial markets and destroy America’s economy for many years. The present stagnant economy and the uncertainties associated with this year’s presidential elections could be a tempting opportunity to create an economic “perfect storm” that the U.S. is currently incapable of preventing.
In the event of such a horrific cyber attack on the US financial system, investors will need safe haven investments. But it will be too late if you do not already own safe haven investments ahead of time.
That’s why every investor needs to devote a portion of his or her wealth to gold investments. Only gold is real and not subject to being erased by a keystroke…