Did they fool you?

  • An extraordinary investment
  • Did they fool you?
  • The hermit kingdom
  • An important reminder from Kris Sayce
  • Ending the dollar

Your editor is away from the office today. We’re attending a business meeting in the Melbourne CBD.

So, as a treat, today we’re publishing a recent edited issue of Port Phillip Insider EXTRA. EXTRA is a paid subscription service run by colleague Selva Freigedo. Each Saturday, Selva looks at the important global macroeconomic trends, explaining and analysing them for her readers.

Check it out below.

But before that, a quick follow-up on something we mentioned yesterday. It’s the launch of a special investment service that’s nothing like anything we’ve ever launched before. In fact, in terms of the lengths we’ve gone to in order to introduce regular Aussie investors to the hottest and most exciting investment ideas on the market…well…this is just about the pinnacle.

We can’t go into too much detail yet. There are still one or two creases to iron out. But if we’re right about this, it could be the most valuable — and potentially most lucrative — advisory we’ve ever launched. We assure you: that’s not hyperbole.

We’re certain you’ll agree when you see the details in the coming days.

As I say, I can’t go into too much detail. But to give you a taste, I call these stocks ‘Halo Stocks’. I know it’s an odd term, and they’re certainly not saintly. But they do have an aura about them.

In fact, for many investors, just the thought of getting into this kind of stock can send investors into raptures. Unfortunately, for most folks, as much as they try, they can never buy them. That’s a shame.

Well, we plan to change that. We’re not claiming it will be easy, or that we can guarantee you’ll get to buy every halo stock. But based on the research we’ve put into this, we’re convinced that you’ll get the opportunity to invest in more halo stocks than you miss.

Although, to be honest, even if you only get in on one of these halo stocks, it could make a radical (positive) difference to your investment portfolio and wealth.

Anyway, I’ve probably already said too much. But I don’t think I’ve gotten as excited about an opportunity as this in a long while. I mean that. So, stick with us on this. We’ll give you more details in the days ahead.

Whatever you do over the coming days, do not take your eyes off Port Phillip Insider. The next week could be the most significant week in our publishing company’s 12-year history…

Markets 

Overnight, the Dow Jones Industrial Average fell 2.19 points, or 0.01%. 

The S&P 500 fell 1.65 points, for a 0.07% drop. 

In Europe, the Euro Stoxx 50 gained 0.01 points, or 0.00%. Meanwhile, the FTSE 100 climbed 0.91%, and Germany’s DAX index lost 0.02%. 

In Asian markets, Japan’s Nikkei 225 is down 134.35 points, or 0.67%. China’s CSI 300 is down 0.32%. 

In Australia, the S&P/ASX 200 is down 55.72 points, or 0.95%. 

On the commodities markets, West Texas Intermediate crude oil is US$48.66 per barrel. Brent crude is US$51.65 per barrel. 

Gold is trading for US$1,236.40 (AU$1,667.88) per troy ounce. Silver is US$16.69 (AU$22.51) per troy ounce. 

The Aussie dollar is worth 74.13 US cents. 

That’s all from me for today. Now over to an edited excerpt of Port Phillip Insider EXTRA from Selva…

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Did They Fool You?
By Selva Freigedo

Congratulation! We happily announce to you on your emergence among the 10 final winners of our lotery promotion. You are therefore have been aproved to claim a total sum of $5,000,000.

Who by now hasn’t received a Nigerian lottery scam email?

For a moment, all those zeroes blur your better judgement. You envision how much better your life would be with all that money.

You think about replying. After all, there is a remote chance it could be true.

Until the typos and bad grammar bring your back to reality. If it wasn’t for them, they could have fooled you.

The thing is, those typos are a key part of the scam. According to the book Think Like a Freak, they are there to deter ‘false positives’. That is, those people who engage with scammers but figure it out midway and never end up paying. They cost the swindlers a lot of effort, for no reward.

By sending an email full of typos, they can identify the most gullible targets straight away. That is, the people most likely to pay up.

This tactic may have worked for Nigerian lottery scammers, but it backfired during the Bangladesh Bank heist. Granted, their typo was not intentional.

Last year, hackers breached into the Bangladesh Bank’s online system and stole employees’ credentials for payment transfers. They then sent over 30 requests to the New York Fed for money transfers amounting to almost US$1 billion.

Yet one of the transfer requests had a typo.

Instead of requesting a transfer to the Shalika Foundation in Sri Lanka — which by the way doesn’t exist — hackers had misspelled the word foundation as ‘fandation’.

A suspicious Fed asked the Bangladeshi Bank for clarification. It was then that the jig was up.

The hackers didn’t make it out with the US$1 billion, but they still managed to steal a whopping US$81 mln, one of the largest bank thefts in history.

Over one year has passed since the bank heist, and there is a possible suspect: North Korea.

Kaspersky Labs — a leading Russian cybersecurity company — revealed it has found links from North Korea to the Bangladeshi Bank heist.

Kaspersky Labs claims they have evidence that the hackers, known as Lazarus Group — the same cyber collective linked to the Sony studio attack that cost the company US$35 mln — made a direct connection to the bank from an IP address in North Korea. Since 2009, Lazarus has targeted banks, media and financial institutions in 18 countries.

Needless to say, North Korea denies the accusations. They say the US is reaching ‘despicable heights’, and that the hacking allegations are an attempt to justify launching a pre-emptive strike against North Korea.

Karspersky Labs admits they cannot outright blame North Korea for the Bangladeshi heist. There is the possibility hackers could be framing North Korea. Yet they think North Korean involvement is the most likely explanation. It seems like we can’t get away from North Korea when listening to the news…

The hermit kingdom

Last year, hackers tried to break into several Polish banks to steal money from 100 organisations around the world. Cybersecurity company Symantec believes the Lazarus Group was also behind this attack.

The scheme was discovered quickly, and nothing was stolen. Yet, according to The New York Times, the hit-list included major institutions like the World Bank and the European Central Bank.

Now experts at the Foundation for Defense of Democracies — a not-for-profit organisation focusing on foreign policy and national security — are warning that North Korea is orchestrating hacks of global banks to fund its nuclear program.

And the latest events could prove them right.

Unless you have been living in a bunker, you have probably heard of WannaCry, the massive ransomware attack that started last Friday. According to Europol, it has affected 200,000 computers in 150 countries and brought down basic services like the British National Health Insurance, European telcos and Chinese ATMs.

And guess who the number one suspect is?

According to ABC News, technical experts at Google, Symantec and Kaspersky Lab claim some of the code in the earlier version of the WannaCry software has also shown up in programs run by the Lazarus Group, linked to North Korea. But evidence falls short, as Symantec and Kaspersky say many hackers reuse code from other operations.

The truth is that hacker attacks seem to have escalated since North Korea received economic sanctions. And the nature of the attacks has changed from creating havoc to simply going after money. North Korea has been detecting and training hackers to increase their capabilities and bring money into the country.

North Korea is a fascinating country, economically speaking.

In the era of globalisation, the country is completely cut off from the global economy. It is one of the most secretive, militarised nations in the world.

Not much is known about its leader, Kim Jong-un, or even when he was born.

All we know is that the population is very poor, mainly because their leaders have prioritised money for nuclear arms. With economic sanctions in place, they can barely pay for imports. That’s why Jong-un has ordered to do away with imports.

On paper, North Korea’s main export is coal.

Yet, cut off from the global economy, the country has had to resort to unconventional ways to get money into its borders. That is, by resorting to illegal activities.

Another main export is weapons, like ballistic missiles. That’s right; they don’t just use those for impressive parades and celebrations.

North Korea also allegedly sells counterfeit drugs. And they have been known to produce large amounts of ‘supernotes’. These are high-quality counterfeit bills; so good in fact that only experts are able to spot them.

The thing is, once you get all that black money from drugs, counterfeit money and weapons, you need to launder it to fund your nuclear program. But how do you do this if the UN has cut off your access to the global financial system?

North Korea has been able to dodge that ban. How?

Well, for one, mafia style.

The fact is that Korean food has been rising in popularity, and North Korea is taking advantage of this by setting up a restaurant chain, Pyongyang. It has 130 restaurants in over 12 countries. The restaurants promote North Korean food and culture. And tourists are flocking in, curious to find out more about the secretive country.

According to Swedish journalist Bertil Lintner, the chain is part of Room 39, a North Korean government organisation whose main purpose is to keep money coming into the country. Lintner alleges the restaurants are laundering money to fund consulates and to pay for imports.

But the country is also using other techniques to get paid for imports. One of them is to use gold to pay for imports, and to receive payments for the weapons they export. Gold is a physical currency; it can’t be traced or manipulated, and it holds its value.

And that could be one of the reasons why the country is hoarding gold.

An important reminder from Kris Sayce

Before getting back to the growing threats in the cyber world, this note from Publisher Kris Sayce just hit my inbox:

Hey Selva,

Just a quick one.

Don’t forget to remind readers about Gold Stock Trader today.

I’ve just opened the doors to this service for the second time in about two years.

But the doors won’t stay open long. In fact, I’ll probably slam them shut this coming Sunday (at the latest).

So, for the readers who’d like to know how to turn small gold moves into a big pay day, now is the time to check it out.

Can you give them the right link as well.

Cheers,

‘Kris’

Kris is referring to one of our most exciting advisory services. It’s not for everyone. But if you’re on the hunt for some outsized gains…and can stomach the risk that comes with the hunt…you can learn all about Gold Stock Trader here.

Ending the dollar

North Korea has been threatening for years to attack the United States and its allies. And recent deployments of nuclear weapons have escalated tensions.

US Vice President Mike Pence has warned that the ‘era of strategic patience is over.’ Strategic patience refers to the approach used by the Obama administration, which believed isolating North Korea would weaken it and make it play nice.

US President Trump considers the use of nuclear weapons unacceptable, and has vowed to bring Jong-un to his senses. Tensions are escalating as the US has ordered the USS Carl Vinson aircraft carrier to sail towards the Korean peninsula, in addition to sending a nuclear submarine as a show of force.

The US is using its military force and economic sanctions to get North Korea to submit, but these measures don’t seem to be working.

North Korea’s response?

We will sink your carrier, attack Australia, and wipe out the US and South Korea.

Last Sunday, North Korea tested a missile which could reach the small island of Guam. The US territory is home to a military base.

The Kremlin has asked for a peaceful solution, and has increased its defences in Vladivostok, near the Russian-North Korea border. Japan is warning citizens they may only have 10 minutes to prepare for a missile attack from North Korea, and is issuing guidelines on how to protect themselves.

China, in an effort to pressure North Korea, has cut coal imports from the country until the end of the year. According to Bloomberg, Chinese imports from North Korea have fallen 35% month-on-month in March. It is now threatening to cut oil exports, which could really damage the country.

Geopolitical tensions are on the rise, which begs the question: Are we on the brink of a Third World War?

The truth is, nobody can be sure. I certainly hope not.

But I think this is a tug of war between the US and China to exert pressure on the Middle Kingdom. The US is stirring the pot to assert itself as the world power in front of a growing China.

The thing is, the recent US show of force against North Korea is threatening what China wants the most: peace. If China wants to keep its economic expansion plans, it needs peace, not war.

China has had impressive growth over the last several decades, and its rise is threatening US hegemony.

But the problem is that it’s not just US-North Korea tensions. Relations between Russia and the US are also deteriorating. Russian President Vladimir Putin has just unveiled the biggest man-made military base in the Arctic. With increasing tensions, Trump has changed his mind on NATO, and no longer considers it obsolete.

China and Russia are trying to move away from the US dollar and decrease its influence. China has recently opened a clearing bank in Russia to handle transactions in yuan to increase bilateral trade between the two countries.

Russia and China are also buying large quantities of gold and building up a gold trade. Russia’s largest bank, Sberbank, just announced it will be facilitating gold trade. The second largest bank in Russia, VTB, is also boosting its metal commodity business to trade with China and India.

While the Western world is creating wealth through debt and moving towards a cashless society to keep our illusion of wealth intact, the BRICS are actually building up a gold trade.

Could all of this be related to decreasing the US dollar influence? Maybe.

What’s for sure is that if these three nations go on with a show of strength, the future is certainly uncertain.

Regards,
Selva