Recently I have been blogging not so much about changes in the financial markets, gold manipulations, and so on, but on deeper underlying geopolitical and economic transformations in the world. Yesterday I expanded upon this theme by suggesting that there appears to be an overall trend toward and away from information-based or information backed systems of clearing, suggested by the dramatic shifts in gold prices and demands over the last several months. To put it succinctly, I have proposed that Asian moves toward gold reflect less a lack of confidence in western financial institutions and systems, and more an acknowledgement that the BRICSA nations lag behind the West in electronic financial clearing and intelligence gathering capability, and that the move to more analogue and less digital bases of transaction were, perhaps, a reflection of this circumstance.

In that context, Ms. P.H., a regular reader here, sent along the following intriguing article:

Chinese stocks swing wildly after computer error

I am going to suggest some more high octane speculation here.

It has long been known that the various great powers, China among them, have been developing their cyber warfare capabilities. More recently I have blogged about Russia's moves to secure its communications, and to expand and compete directly with the USA on cyber and robotic warfare capabilities, in addition to their move to buy that outmoded analogue technology, the the typewriter. Russia has long experience in cyber warfare, particularly in being on the receiving end of it. The infamous "Farewell" spy case of a deeply entrenched French mole within the KGB being a case in point... all of which dovetailed into the Reagan administration's successful implantation of corrupted computer software into the Soviet infrastructure, with the result that a "malfunction" occurred on a Soviet gas pipeline which exploded with such force that it was visible to spy satellites in space.

All of these things - the Asian move to physical gold, the suggestions that their central banks are demanding the return of their gold, the faintly perceptible emerging outlines of a bifurcated world of international financial clearing, one centered in the information-tech-based West and its allies, the other centered in the old-fashioned gold-transfers that it appears the BRICSA nations are moving towards - all of these things, I suggest, might be viewed as context for this story of a computer error generating market swings in Chinese stock markets beyond the normal. I suggest that this may have been a gentle reminder to the Asian markets from their western competitors, a gentle reminder that information-processing and electronic transactions are "hackable," and that markets can be wildly manipulated at the press of a button, so to speak.

In short, there might be much more to this story than meets the eye, and that that Chinese have, for understandable reasons, suppressed what might be a much bigger story. If so, we can expect "computerized retaliations" of similar kind and measure, in addition to a renewed and redoubled effort to develop their own independent institutions and mechanisms of clearing. The cyber-market wars may already be on...

... See you on the flip side.