Must-read: Five things every investor needs to know about government spying

Editor’s note: The following post is from our friend Paul Rosenberg, founder of Cryptohippie USA, a company dedicated to protecting individuality and privacy on the Internet. We hope you enjoy it…

From Paul Rosenberg, Founder, Cryptohippie USA:

It was a smoldering July in Las Vegas, enough years ago that the statute of limitations applies. I walked into a large room full of hackers. They were sitting on the floor, fingers churning their laptops, all their data feeding onto a huge screen in the center of the room. Down that screen, all day long, scrolled a list of email logins and passwords… Stolen email logins.

At the top of the screen was a sign which read, “The Wall Of Shame.”

The addresses scrolled onto the screen at a rate of about one per second, meaning that 3600 email accounts were being hacked each hour. This continued for three days

As an investor, this matters to you far more than you may imagine. Here are five big reasons why:

#1: Those Hackers Went To Work For The NSA

Since 2003 at least, the NSA has been actively recruiting hackers. They’ve hired thousands of them. You can see their pitch to hackers here, and a story from a hacker convention here. There was an NSA recruiter at the hackathon I mentioned above. He openly introduced himself to me, believe it or not.

The NSA has become the world’s largest hacker collective. Most of the attacks that Edward Snowden exposed were old hacker tricks, souped-up with lots of money and insiders at tech companies.

In short, huge teams of hackers are doing their dark work on the government’s payroll. God Bless America

#2: The NSA Shares What It Steals

And guess who they share it with… the IRS. That’s a gross violation of law, of course, but since the 4th amendment was tossed, that hardly seems to matter. You can find an excellent story on it here. There is a manual, by the way, showing IRS agents and others how to use this illegal information without drawing attention.

So, the NSA is sharing their information with enforcement agencies. Those agencies, of course, will use the information to do the only thing they know: Enforce laws on people. And it’s much more efficient to mine data troves for leads than it is to beat the streets.

From here on, tax prosecutions will be based upon information collected in mass data collections. In a choice between digging through reports or letting NSA machines do the work for them, which do you think tax enforcers will choose?

Taxes, by the way, are the number one threat to your long-term wealth. Run the numbers some time.

#3: It’s Easier To Take All The Data

Hacking individuals is slow and hard, which is why it’s seldom done anymore. It’s easier to take over a router (especially if you have a backdoor) and hack the data of ten thousand people at once. This, of course, is precisely what the NSA does. And they’ve gotten help from more or less all the big American tech companies. (See here.)

The NSA takes full data streams out of AT&T’s main facilities and presumably the others. They have deep access into Microsoft, Google, Apple, Yahoo, AOL, Facebook, etc. They’re actually telling the truth when they say that they’re “not targeting individual Americans.” They’re targeting all Americans.

#4: FATCA, Obamacare, & Deficits, Oh My!

You must already know the numbers, so I won’t bother quoting them to you. The U.S. government has run up an astronomically huge debt. To hold the ship together, they need more money. And that means that they need to squeeze more money out of the productive half of the U.S. population. And that means you. I think we all remember the old bank robber quip:

Why do you rob banks?

Because that’s where the money is!

And that’s precisely why governments are going after investors… that’s where the money is. They’re not going to go after the half of the populace that survives on government checks. Nor can they gain much by going after low-wage people. That leaves business owners and investors. Sorry.

#5: You Can Protect Your Data

Whether they realize it or not, everyone on the Internet is swimming in a pool full of sharks. But you don’t have to. Getting out of the pool isn’t hard, but you’ll have to act, instead of following the crowd.

There are two options:

  • Get several encryption and security programs, learn to use them, and stay up to date with them. This method costs very little, but will take a lot of your time.
  • Pay for professional data protection. Almost no time or study are required and the cost is below a dollar per day, but you will have to pay it.

If you want to do it yourself, download a copy of the Cryptohippie Guide To Online Privacy, for free, right here.

If you want to let professionals do it for you, I encourage you to try the Cryptohippie service, which will protect your surfing, email & chat, as well as iPhone, iPad and Android devices. There are competitors, of course, but they fall far short of Cryptohippie’s standards. If you want to compare, here are the things you should ask:

  • Do they have their own Public Key Infrastructure? This one is crucial. The NSA has already hacked all (or almost all) of the certificate agencies. If the service doesn’t run its own infrastructure, consider them pre-hacked.
  • Do they provide multiple, jurisdictionally-aware hops? (Just ask for a yes or no.)
  • Do they operate their own DNS system?
  • Do they have real customer service?

I think we’ve all known people who never broke the rules but were chopped up by the IRS anyway. It happens all the time. And from now on, those disasters will be based upon intercepted (hacked) data.

You don’t have to be the fish that’s dragged up in that net.

Crux note: Paul has agreed to extend a free trial subscription to any Crux readers interested in trying his fantastic Cryptohippie service. Click here to claim yours now.


More on privacy:

Stanford University’s “Mini-NSA” project proves privacy is a myth

Doc Eifrig: How to protect yourself from the most dangerous threat to your privacy today

The war on your privacy is moving to an unexpected new “battlefield”

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