Simulating A Global Financial Collapse - A Prediction for the Future

While it didn't really make headline news, a recent simulation gives us a sense of what could happen to the global financial system if an unthinkable catastrophe damages or destroys the world's digital infrastructure.

 

Here is the report on the simulation of a cyber attack on the world's financial system from the NASDAQ website:

 

On December 9, 2021, Israel led a ten nation simulation of a major cyber attack on the global financial system under the moniker "Collective Strength".  This exercise which took place over ten days was undertaken to ensure that should such an attack take place in the real world, cooperation among nations would minimize damage to the banking and stock market sectors.  The participants included treasury officials from Austria, Germany, Israel, Italy, the Netherlands, Thailand, the United Arab Emirates, the United Kingdom and the United States and also included officials from the International Monetary Fund, the World Bank and the Bank of International Settlements (BIS), the central bank for central banks.

  

The exercise featured several different scenarios which involved attacks on the integrity of transactions between importers and exporters, liquidity, foreign exchange, bond markets and, most interesting given the post-truth era that we live in, fake news reports which resulted in a run on banks and turmoil in global markets.  In the simulation, participants were faced with the following:

  

"The banks are appealing for emergency liquidity assistance in a multitude of currencies to put a halt to the chaos as counterparties withdraw their funds and limit access to liquidity, leaving the banks in disarray and ruin."

 

One of the groups involved is Tel Aviv-based BeST or Be Strategic Solutions, a crisis management software company which has run simulations involving cyber and data privacy issues and physical security among others as shown here:  

 

Now, let's look at another aspect of cybersecurity.  It is not terribly surprising, but the man with all of the answers has a stake in cybersecurity.  At the Cyber Polygon 2021 event held in June 2021, the founder of the World Economic Forum,one Klaus Schwab, made some interesting comments about securing the global digital infrastructure.    You can find Schwab's comments at the 2 hour and 15 minute mark in this video:

 

Here is a quote:

 

"We have come together today to discuss how we can --- your digital infrastructure systems and protect companies but also societies from cyber attacks.  We must do so with a broader mission in mind; to improve the state of our digital world by enhancing, on the one hand, global cooperation but also public-private corporation (a much-used Schwab buzz phrase)....

 

Digital connections are embedded in our homes, our workplaces and through operation technology our critical infrastructure.... (this connectivity) has enabled us to continue to function during a time of unprecedented crisis.  Technology has been central to the way we have collectively managed the COVID-19 pandemic and the global crisis.  Digital infrastructure made it possible to deliver essential services.  It helped business to run.  And it helped us to maintain contact with each other."

 

...(digitalization) has also opened us up to new challenges.  One of the most important amongst them is how to ensure digital technologies and communications are safe, secure and trustworthy.  Many technology leaders have noted that within a few short months, we have achieved advances in digital transformation that might have otherwise taken years.  But this digital dividend...is fragile.  Cyber incidents can undermine the trust in key online services and they could derail adoption of socially valuable innovations."

 

As a technology "guru", Schwab's vision of the future relies very, very heavily on a healthy global digital infrastructure, particularly necessary for his transhumanist vision where Homo superiorus relies on a merger of biology and technology for the creation of a new superior form of humanity.  It isn't surprising that the World Economic Forum is playing a key role in global cybersecurity given that its entire raison d'être is ensuring that the global elite remain just that, elite.

 

As an aside, you'll notice that one individual is given top billing in Schwab's opening comments; Herman Gref, Chief Executive Officer and Chairman of the Board of Sberbank (a Russian bank) who just happens to be on the Board of Trustees for the WEF as shown here:

 

 

The presence of Sberbank's leader on both the WEF's Board of Trustees and at the Cyber Polygon exercise is quite interesting given that the bank is only in 51st place among global banks in 2021 and 402nd place in 2020 when ranked by sales, profit, assets and market value.

  

Let's close this posting with a couple of thoughts.  First, back in October 2019, this simulation took place:

 

 

Coincidentally (?), four months later, the globe was experiencing a massive reality check as the COVID-19 pandemic took place.  Now, we have another simulation, this time of a cyber attack on the world's financial system.  How long will it be before this too is a real world occurrence?

 

Second, the potential for a cyber attack on key parts of the global financial infrastructure should make one realize just how fragile our entire economy has become.  We are fully reliant on the digital infrastructure for nearly every aspect of our lives; from the production and delivery of electricity, food, fuel, water and the other necessities of life along with the financial services that we all use on a daily basis.  What would happen if the entire banking system was shut down, making it impossible to use credit and debit cards or withdraw fiat currency from our local ATMs etcetera?  

While Schwab rightly points out that the world has made unprecedented advances in digital services over that past two years that would not have been possible without the COVID-19 pandemic, I would suggest that this transformation has made the global digital infrastructure even more vulnerable, creating a world that was completely unthinkable three decades ago and, should it shut down, would push the vast majority of humanity back to the comparatively primitive lives that were lived by our great grandparents.