Part 3 on the Federal Reserve’s Quest

Digital Dollar in Crosshairs of Potential Killer

Editor’s note:  Back in August of 2016, Compass technical writer Gordon Allison authored a series of articles describing Electro-Magnetic Pulse (EMP), which poses are real threat should the Federal Reserve decide to adopt the so-called ‘Digital Dollar.’

CYBERSPACE – Should an EMP attack occur, the internet, telephone, 4G LTE and 5G cell phone systems will all go down. What does an EMP attack look like?  Your cell phone dies right in the middle of your call or texting. You try the radio or TV, but they don’t come on. You open the refrigerator door, but no light shines. The lights are out, the microwave doesn’t work, the coffee maker is dead, the fully charged laptop and tablet won’t come on, the front door bell – nothing!!  

Then you look out the window and notice cars are stopped on your street. Drivers are out of their cars talking to each other; none of the vehicles will start, much less run. The neighbor down the street has a heart attack, but calling an ambulance is impossible. You contemplate the fact that your standby emergency generator didn’t come on. No one knows what just happened.  Life as you have known it has vanished into thin air. You have just experienced an EMP attack. Was it Putin?

Think of the event as acting as a time machine that transports your family back to the 1880s, technology-wise. With all the damage caused by the EMP event, it will take years to manufacture new electronic devices. Unless you are rich, you may have to choose what electronic devices you will purchase, in what order, and how many, or if you’ll even have money to do it at all.

There is a damn good chance an EMP attack would wreak major havoc upon digital currencies.

Biden released an Executive Order on March 9, 2022, requesting the Fed and the U.S. Treasury to evaluate the possibility of developing a crypto currency to supplement the U.S. Dollar.  Within just a couple of days, the collective value of some 100 crypto currencies in the world lost over one Trillion Dollars!  Obviously, political pronouncements are a serious threat to crypto currencies.

The question becomes, what will you do for money while you have no digital device or access to your crypto currency on the internet? With more and more computer devices going to solid state drives, it is possible for the crypto information on the internet to be lost in an EMP attack as well.

As mentioned earlier in this series, ‘hot’ digital wallets are inherently more susceptible since the digital device (smart phone or tablet) is turned on more often, giving the hacker more time to break in.  A ‘Cold’ digital wallet such as a thumb drive would only be installed in the digital device when crypto transactions are taking place. The thumb drive can be removed from the digital device and put in an EMP-proof container to avoid loss of crypto information should an EMP attack occur.

This is a serious advantage over having to provide an EMP-proof container for the entire digital device.  At least having a backup digital device in a long-term EMP-proof container allows access to the crypto currencies when the EMP event has passed.

A second threat is hacking.  With the fighting in the Ukraine, Putin could launch a cyber attack on crypto currencies as well as on the U.S. Power Grid.  A Grid attack would be especially bad as GE, Westinghouse, and Allis-Chalmers no longer manufacture power transformers in the USA.  Currently the largest manufacturer of power transformers outside of China is Assea Brown Boveri (ABB), with worldwide offices, as well as in Cary, NC.  An attack on the Grid would start a process of transformer replacement which could run years!  Fortunately, the company supplying internet service to Russia has 

shut the service down.  But if there are Russian agent sleeper cells in the U.S., the attack may not be totally foiled, but merely just delayed.

By now, you’re asking what is the probability of this kind of event ever happening?  Those of you who know me also know I am, if nothing else, a realist. Let me give you the facts, and you can draw your own conclusions. Ted Koppel of “Nightline” fame wrote a book in 2015 entitled Lights Out which is a pretty easy read.  You may want to review it to help you decide how to calculate your own odds of experiencing an EMP attack.

EMP producers come in a couple different flavors. The Russians have a device called a Marx Generator.  If you owned an old analog TV set with a 17″ screen or larger, it probably had a Marx Generator inside it.  This circuit in the set produced the 30 kilovolts necessary to make the picture tube operate. Videos abound on the internet showing how to build such a device, and demonstrate what effect it can have on cell phones and hand-held video games.

The more likely device is an atomic bomb explosion.  One realistic scenario could be a single bomb detonated 150 miles above St. Louis, MO.  The devastation would extend approximately 1,200 miles in a circle from Saskatchewan to Quebec City, Canada, through the United States from Arizona to the Atlantic Ocean, and to Northern Mexico down to Monterrey.  Mexico would be better off, since its capital is away from the effect zone, as are lots of cities such as Puerto Vallarta, Cabo San Lucas, Acapulco, and Cancun.

Russia and China have plenty of nuclear weapons – some could be orbiting overhead even as you read this.  But, how likely are either the Russians or the Chinese to make an EMP attack?  China has a lot of U.S. stock and bond holdings.  If we were to have an EMP attack, China would not likely get their money back. The possible exception would be that the Chinese invade the U.S. and take the gold from Ft. Knox to pay themselves back. Putin is a megalomaniac who thought the Ukraine situation would be over by now.  But since it isn’t, he may do any number of things to strike back at the United States and NATO.  Think of a tiger backed into a corner. 

Strap in and hang on for the ride that could come anytime!