These billionaires are issuing terrifying warnings about global debt levels

We write a lot about global debt levels at Sovereign Man.

In fact, the very first Notes from the Field I ever wrote, in June 2009, was about how broke the US was… and the severe consequences that eventually face a nation that recklessly spends money it doesn’t have.

And debt has been a major theme in this publication ever since.

As you know, since the Great Financial Crisis in 2008, debt levels have only gotten worse. But not just for governments.

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Sovereign debt, corporate debt and consumer debt are all at all-time highs.

The US government has $22 trillion of debt and is running $1 trillion+ deficits every year. There’s a record $15 trillion of corporate debt. And the US consumer has racked up around $4 trillion of debt (not including mortgages).

And you don’t have to take my word for it that this is all going to end badly…

Last week, one of the most respected hedge fund managers in the world came out with a warning scarier than anything we could have dreamed of.

Seth Klarman runs the $28 billion hedge fund, Baupost Group. The guy is famously secretive (and conservative). So the fact that he went out of his way to make this public statement means you should pay attention.

Also, Klarman’s fund is closed (he’s actually been returning money), so he’s not doing this to scare people into investing in his fund.

In a 22-page letter to his investors, Klarman warned that government debt levels, particularly in the US (where debt exceeds GDP), could lead to the next global financial crisis.

“The seeds of the next major financial crisis (or the one after that) may well be found in today’s sovereign debt levels,” he wrote.

In addition to debt levels, Klarman is worried about the increasing social unrest (something we’ve written about in detail) and the public’s inability to decipher who is telling the truth these days between politicians and the media… both of which make it difficult for a capitalist system to thrive.

Who knows what will ultimately bring the system crashing down, but let’s focus on the US government’s exploding deficits…

In 2018, the federal government’s deficit hit $1 trillion. But these are “good times,” with soaring asset prices, solid corporate profits and record-low unemployment.

What happens when a recession inevitably occurs. Our friend Jim Grant of Grant’s Interest Rate Observer, says the deficit will blow out to $2 trillion.

So, $22 trillion in the whole and a $1 trillion deficit in a good year. Not to mention, interest rates are rising, which means all of this debt is just getting more expensive.

Eventually, people will simply refuse to lend Uncle Sam any more money… because they know there’s no way they’ll be repaid.

And we’re already seeing signs of that.

According to the Wall Street Journal, in the first eight months of 2018, overseas buyers of US Treasurys only bought half the amount they did over the same period in 2017.

From Klarman:

“There is no way to know how much debt is too much, but America will inevitably reach an inflection point whereupon a suddenly more skeptical debt market will refuse to continue to lend to us at rates we can afford…”

And when fewer people want your bonds, that means it’s more expensive to borrow. But the government can’t afford to pay any more…

The government already spends 28% of its revenue just on interest (at a time when interest rates are near all-time lows).

Ultimately, Klarman believes the debt (along with the massive wealth disparity caused by a 10-year asset price boom) will lead to social unrest…

“It is not hard to imagine worsening social unrest among a generation that is falling behind economically and feels betrayed by a massive national debt that was incurred without any obvious benefit to them.”

Again, this isn’t Sovereign Man speaking… it’s a bespectacled hedge fund manager out of Boston.

Another line from Klarman that comes straight from Notes… “By the time such a crisis hits, it will likely be too late to get our house in order.”

But Klarman isn’t the only billionaire alerting the public right now…

At the recent Davos gathering, Ray Dalio, founder of the world’s largest hedge fund, said he thinks the next downturn will be worse than the Great Depression.

And like Klarman, Dalio says the problem comes down to too much debt…

“The biggest issue is that there is only so much one can squeeze out of a debt cycle and most countries are approaching those limits”.

The world is drowning in debt. And there’s no austerity measures in sight. In fact, a rising tide of socialist politicians want to explode government spending (paying for free healthcare, education and everything else under the sun).

We don’t know when this monetary experiment will end. The European Central Bank and Bank of Japan both essentially reneged on their plans to start tightening monetary policy. And yesterday, the Federal Reserve has signaled it will stop hiking rates.

Global central banks, it seems, have already given up on their weak attempts to tighten… fearing the economy wouldn’t hold up.

If they step back on the gas of QE, I believe that’s the point when people lose faith in fiat… and the US dollar specifically.

And while this all goes down, the central banks (who control the printing press) have been buying gold at the fastest pace in years. You may want to consider doing the same.

Gold is one of the few asset classes that hasn’t risen to absurd heights. But it may be coming back to life… the metal rallied to an eight-month high this week.

FBI Mapping ‘Joanap Malware’ Victims to Disrupt the North Korean Botnet

north korea hacker group
The United States Department of Justice (DoJ) announced Wednesday its effort to “map and further disrupt” a botnet tied to North Korea that has infected numerous Microsoft Windows computers across the globe over the last decade.

Dubbed Joanap, the botnet is believed to be part of “Hidden Cobra“—an Advanced Persistent Threat (APT) actors’ group often known as Lazarus Group and Guardians of Peace and backed by the North Korean government.

Hidden Cobra is the same hacking group that has been allegedly associated with the WannaCry ransomware menace in 2016, the SWIFT Banking attack in 2016, as well as Sony Motion Pictures hack in 2014.

Dates back to 2009, Joanap is a remote access tool (RAT) that lands on a victim’s system with the help an SMB worm called Brambul, which crawls from one computer to another by brute-forcing Windows Server Message Block (SMB) file-sharing services using a list of common passwords.

Once there, Brambul downloads Joanap on the infected Windows computers, effectively opening a backdoor for its masterminds and giving them remote control of the network of infected Windows computers.

If You Want to Beat Them, Then First Join Them

Interestingly, the computers infected by Joanap botnet don’t take commands from a centralized command-and-control server; instead it relies on peer-to-peer (P2P) communications infrastructure, making every infected computer a part of its command and control system.

Even though Joanap is currently being detected by many malware protection systems, including Windows Defender, the malware’s peer-to-peer (P2P) communications infrastructure still leaves large numbers of infected computers connected to the Internet.

So to identify infected hosts and take down the botnet, the FBI and the Air Force Office of Special Investigations (AFOSI) obtained legal search warrants that allowed the agencies to join the botnet by creating and running “intentionally infected” computers mimicking its peers to collect both technical and “limited” identifying information in an attempt to map them, the DoJ said in its press release.

“While the Joanap botnet was identified years ago and can be defeated with antivirus software, we identified numerous unprotected computers that hosted the malware underlying the botnet,” said U.S. Attorney Nicola T. Hanna.

“The search warrants and court orders announced today as part of our efforts to eradicate this botnet are just one of the many tools we will use to prevent cybercriminals from using botnets to stage damaging computer intrusions.”

The collected information about computers infected with the Joanap malware included IP addresses, port numbers, and connection timestamps which allowed the FBI and AFOSI to build a map of the current Joanap botnet.

The agencies are now notifying victims of the presence of Joanap on their infected computers through their Internet Service Providers (ISPs) and even sending personal notifications to people who don’t have a router or firewall protecting their systems.

The US Justice Department and FBI will also coordinate the notification of overseas victims of the Joanap malware by sharing the data with the government of other countries.

The efforts to disrupt the Joanap botnet began after the United States unsealed charges againsta North Korean computer programmer named Park Jin Hyok in September last year for his role in masterminding the Sony Pictures and WannaCry ransomware attacks.

Joanap and Brambul were also recovered from computers of the victims of the campaigns listed in the Hyok’s September indictment, suggesting that he aided the development of the Joanap botnet.

Facebook Paid Teens $20 to Install ‘Research’ App That Collects Private Data

facebook app download

If you are thinking that Facebook is sitting quietly after being forced to remove its Onavo VPN app from Apple’s App Store, then you are mistaken.

It turns out that Facebook is paying teenagers around $20 a month to use its VPN app that aggressively monitors their smartphone and web activity and then sends it back to Facebook.

The social media giant was previously caught collecting some of this data through Onavo Protect, a Virtual Private Network (VPN) service that it acquired in 2013.

However, the company was forced to pull the app from the App Store in August 2018 after Apple found that Facebook was using the VPN service to track its user activity and data across multiple apps, which clearly violates its App Store guidelines on data collection.

Onavo Protect became a data collection tool for Facebook helping the company track smartphone users’ activities across multiple different apps to learn insights about how Facebook users use third-party apps.

Facebook’s Paid Market Research

Now according to a report published by TechCrunch, Facebook has been doing much more than just collecting some data on its users—this time in the name of an app called “Facebook Research” for iOS and Android since at least 2016.

In some documentation, this program has been referred to as “Project Atlas.” Facebook has also confirmed the existence of the app to the publication.

The report said the company has been paying people aged between 13 and 35 as much as $20 per month along with referral fees in exchange for installing Facebook Research on their iPhone or Android devices, saying it’s a “paid social media research study.”

Instead of downloading the app via any app store, Facebook has been using third-party beta testing services—Applause, BetaBound and uTest—that specifically runs ads on Instagram and Snapchat recruiting participants to install Facebook Research.

Facebook Research App Collects Troves of User Data

The app requires users to install a custom root enterprise certificate, which gives the social media giant the level of access that can allow it to see users’ private messages in social media apps, non-e2e chats from instant messaging apps, emails, web searches, web browsing activity, and ongoing location information.

Although it is not clear if Facebook is accessing this data, but if the company wants it could, according to security researcher Will Strafach, who was commissioned by the publication.

In some instances, the Facebook Research app also asked users to take screenshots of their Amazon order histories and send it back to Facebook.

According to the Facebook Research’s terms of service, installing the app gives the company permission to collect information about other mobile apps on a participant’s smartphone as well as how and when those apps are used.

“This means you are letting our client collect information such as which apps are on your phone, how and when you use them, data about your activities and content within those apps, as well as how other people interact with you or your content within those apps,” the terms read.

“You’re also letting our client collect information about your internet browsing activity (including the websites you visit and data is exchanged between your device and those websites) and your use of other online services. There’re some instances when our client will collect this information even where the app uses encryption, or from within secure browser sessions.”

Facebook Acknowledges the Existence of the Program

While acknowledging the existence of this program, Facebook said, “like many companies, we invite people to participate in research that helps us identify things we can be doing better.”

Since Facebook Research is aimed at “helping Facebook understand how people use their mobile devices, we have provided extensive information about the type of data we collect and how they can participate. We do not share this information with others, and people can stop participating at any time.”

Though Facebook’s spokesperson claimed that the app was in line with Apple’s Enterprise Certificate program, but since Apple requires developers to only use this certificate system for distributing internal corporate apps to their own employees, “recruiting testers and paying them a monthly fee appears to violate the spirit of that rule,” the report reads.

Apple is “aware” of the issue, but it is unclear if the iPhone maker might ban Facebook from using its Enterprise Developer Certificates or not.

In response to the report, Facebook said the company is planning to shut down the iOS version of its Research app. BetaBound, uTest, and Applause have not yet responded to the report.

Who Wins, Who Loses? Q&A: US, Russia, China, Brazil, RIC, Nord Stream-2, Syria

Cool update, thx Lada! ❤

Futurist Trendcast

LADA RAY PATREON OPEN HOUSE IS EXTENDED TO FEBRUARY!

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Who Wins, Who Loses?

Q&A: US, Russia, China, Brazil, RIC, Nord Stream-2, Syria

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Urgent! Brazil to Exit BRICS?

URGENT! Current Calibrations & Predictions for Venezuela! Any hope for Venezuela to avoid becoming the next Syria?

PREDICTIONS: Goodbye BRICS? Hello RIC (Russia, India, China)!

QUANTUM CALIBRATIONS: RIC, SCO and BRICS vs. JAI (new global organizations)

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LADA RAY LIVE QUANTUM CALIBRATIONS! Republicans vs Democrats, US Constitution, Declaration of Independence (EARTH SHIFT PODCAST 5)

Both parties are good for nothing, calibrations tell all!

Futurist Trendcast

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QUANTUM CALIBRATIONS Republicans vs Democrats, US Constitution, Declaration of Independence (ESP5)

This free podcast is part of our January 2019 Double Anniversary Open House! Scroll down Lada Ray Patreon site for more free posts.

Two more Podcasts coming on BREXIT!

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LADA RAY BREXIT PREDICTIONS 2016 & NEW 2019! (ESP6)

Great intel, thanks Lada!

Futurist Trendcast

esp6 my 2016 & 2019 brexit predictions will brexit happen

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LADA RAY BREXIT PREDICTIONS 2016 & NEW 2019! (ESP6)

This free podcast is part of our January 2019 Double Anniversary Open House! Scroll down Lada Ray Patreon site for more free posts.

One more Podcast coming on BREXIT!

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URGENT! Current Calibrations & Predictions for Venezuela! Any hope for Venezuela to avoid becoming the next Syria?

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Russian PM Confirms My 2014 Predictions! Medvedev Thankful for Sanctions; Russian Agriculture and Manufacturing Has Taken Off!

More sanctions please, lol!

Futurist Trendcast

Russia needed that kick in the butt, which we know as anti-Russian sanctions. Exactly as I predicted first in 2014 in several FuturisTrendcast articles, and confirmed thereafter in ​EARTH SHIFT WEBINAR 4: PERIOD 8 GLOBAL PREDICTIONS.

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