I Have Questions

It seems the US and the People’s Republic of China have reached a secret agreement regarding US audits of PRC companies as a prerequisite for those companies being listed on US stock exchanges. This putative agreement allows the Public Company Accounting Oversight Board inspectors to travel to Hong Kong or mainland China for inspections, and it’s officially signed by the PCAOB, the PRC’s Securities Regulatory Commission, and the PRC’s Ministry of Finance.

I also have an observation: inspecting audit papers is not the same as auditing the company.

My questions:

  • In what way will the inspectors know that the audit papers are accurate reflections of the audit that was done?
  • How much advance notice will be required before access to the audit papers is allowed?
  • Will the inspectors be allowed to make notes/copies of the papers and take the notes/copies with them on departure?
  • In what way will the inspectors know that all of the audit papers have been made available?
  • To which audit papers will access be allowed?
  • Via what mechanism will the inspectors know which audit papers to inspect?
  • In what way will the inspectors know that all of the subset of audit papers allowed actually have been made available?

There are more, but these will do for a start.

Secret agreement because:

Officials from the US Public Company Accounting Oversight Board and the US Securities and Exchange Commission said they agreed with their Chinese counterparts to not make the language of the deal public.

No coverup there. Not a bit of one.

Logistics Matters…

…far beyond the process of getting soldiers and consumables to a battlefield and to the battlers.

In the aftermath of Germany’s—and much of Europe’s—considered decision to make themselves dependent on Russian natural gas and Russian President Vladimir Putin’s equally considered decision to limit and cut off natural gas supplies to Europe to try to coerce behaviors acceptable to Putin, Germany, et al., are (re)discovering the need for better logistics and logistical execution.  The lessons are available to the US, too, if the government is willing to learn.

Europe’s energy crisis has unleashed a global battle over natural-gas tankers….

And [emphasis added]

European countries ramped up their purchases of liquefied natural gas from the US, Qatar, and other sources this year as Russia cut supplies to the continent. They are competing with peers in South Korea and Japan—where gas demand has surged during a heat wave—for a finite amount of supply ferried by a limited number of vessels.

LNG-capable tankers are long-lead items that take specialized equipment to keep the natural gas cooled and under pressure. They’re also expensive, hence the interest in only limited inventories of such ships—they’re expensive even simply to have, if they’re just sitting around in port unused.

It’s not just the complexity of the ships, though, that contribute to the present long-lead times.

Shipmakers in South Korea, the world’s biggest producer of LNG tankers, don’t have free capacity for new orders until 2027[.]

However, the wonders of Europe have known for some time that they needed more LNG tankers.

LNG and the tankers that carry the fuel were in high demand even before the conflict, as extreme weather curtailed hydropower, and many economies sought to ditch coal to reduce carbon emissions.

The complexity of these logistics is further illustrated by this little fillip: the price of steel is rapidly rising, an accelerated increase driven by demand from a broad reach of needs in addition to simply making boats.

The lessons for the US?

The need for more natural gas (and oil) production, more flexible production, better and expanded distribution grids to refiners, and in the present context, expansion of port facilities able to convert natural gas to liquid natural gas and then to transfer that LNG to LNG-capable tankers.

And maybe build some of our own LNG tankers. And get rid of the Jones Act.

Equilibrium

Laura Secor had a Wall Street Journal Weekend Interview with Henry Kissinger, and a number of letter writers in the WSJ‘s Letters commented on Kissinger’s espousal of a need for some sort of equilibrium among the world’s powers as the means of world stability (redundancy deliberate).

Kissinger operates from a false premise—the need for international equilibrium.

An equilibrium that balances American enemies—Russia, the People’s Republic of China, Iran, even northern Korea—with American national security is dangerously detrimental to American national security.

We—to use Khruschev’s phrasing—buried the Soviet Union, and we did it entirely peacefully by being superior to it in every meaningful way, and exploiting those superiorities aggressively in the economic sphere in the end game. We would have won that contest much sooner had we been more aggressive much earlier, but in those earlier years we were stuck with the likes of Kissinger and former President Jimmy Carter (D).

We have only to return to that aggressiveness in order to continue securing our safety and weal. And to achieve the only equilibrium that’s even remotely safe for us.

Cyber is the New Artillery

The Russian invasion of Ukraine appears—finally (and with deep simplification)—to be reverting to Russian doctrine: soften up and flatten the enemy’s position with massive artillery barrages, and only then committing ground forces—combined armor and infantry—to the battle.

I suggest that cyber should become the new artillery. It’s cheaper. And can be more effective. Below is a very high level look.

There are a couple of ways in which I’d exploit cyber to soften up and flatten the enemy’s position before committing physical forces of any sort. The beauty of my strategy and tactic is that it would work at sea, in the air, and in space with equal cheapness and facility.

One method can be used promptly; however, the other method will take some years to prepare.

The prompt way is the currently classical method of electronic jamming of radio signals to disrupt both real time (especially critical in the air and in space) communications and electronic-centered sensor systems. This prompt way should be combined with hacking the enemy’s computers so as to disrupt his signals and sensor processing, to inject bad data into his systems databases—including those fed by his sensors—to disrupt and damage other systems databases, to deny access to critical computers (DOS attacks) at critical times, resulting denial of commanders at a number of levels contact with the combat units they command.

Those are all short-term disruptions and can be relatively quickly overcome, so they’d need to be applied only at critical times of a campaign’s onset or of a battle.

The longer-term method, and this is the especially critical part, involves the computer chips we make (and which should be the sole source of chips going into our military and civilian computers) and sell to our enemies in this global economic environment, within which we trade with our enemies even in high tech goods.

These chips—particularly those that are destined for enemy weapons systems or that are dual military-civilian use—should be delivered with small (they only need to be small) bits of code embedded in the chips’ installed software. These bits of code should be remotely triggerable to damage the host chip (primarily by erasing or merely corrupting other software installed on the chip) and/or to spread to adjacent chips in the system and then damage them. The damaged chips then would then effectively shut down the weapons system hosting the infected chip: air defense systems, sensor systems, armor and artillery systems, communications systems, government control systems, financial systems, energy distribution systems; the list is extensive. (Of course, the chips we sell that the customer specifies be devoid of any software would be harder to treat. Note, though, that “harder” is not “impossible.”)

None of this obviates the utility of artillery in leading the physical phase of the battle. First in the artillery barrage, though, should be EMP rounds, none of which, contrary to too much popular opinion, need be nuclear in order to generate the desired pulse.

Thus, the new artillery barrage begins with that chip preparation, then when the battle is forced upon us, continues with the first method outlined above, proceeds to execution of the second method, and finishes with the beginning of the physical assault—the EMP barrage.

She’s Right

But for the wrong reasons.

US Energy Secretary Jennifer Granholm says billions of dollars in upgrades are needed to the power grid in the US to prepare for widespread electric vehicle adoption.

If that’s the spur needed to get the upgrades started and seriously underway, then cool. However, our power grid badly needs upgrade and strengthening in its own right. It’s old, near capacity under normal draw, and highly fragile—as the California portion of the grid demonstrates continually, and as the Texas grid demonstrated a couple of winters ago.

Indeed, nothing has been done since the Northeast blackout of 2003—which itself was a geographic repeat of the blackout of 1965. The proximate causes of these actually were quite trivial, but the fragility of the grid was demonstrated by how fast and far the effects spread: throughout the American northeast (and deep into Canada, which illustrates, also, international implications for strengthening, or continuing to ignore, the decrepit state of our grid).

It’s a national security matter, too, beyond the economic aspects of security.

We also need to drop some dimes (though not as many as might seem) on hardening all of our power grids (plural: not only electricity, but grids distributing natural gas and oil from the well through refiners to end users) against EMP attacks—which needn’t be nuclear weapon-originated, or even large, but merely carefully targeted—and against being software-hacked, as the Russians did when they shut down Colonial Pipeline.