October 18, 2009

The new coin of the NSA is also the new coin of the economy

RAH sends around a review of a new book on the NSA. Just to underscore Chris's the energy thesis mentioned a few days ago, there is this enticing conclusion:

The issue is critical because at the NSA, electrical power is political power. In its top-secret world, the coin of the realm is the kilowatt. More electrical power ensures bigger data centers. Bigger data centers, in turn, generate a need for more access to phone calls and e-mail and, conversely, less privacy. The more data that comes in, the more reports flow out. And the more reports that flow out, the more political power for the agency.

And it isn't just the NSA. The Economist points out that the cash that 3 big players have to go to war with will be spent on data centers (and what you do in them, called Cloud computing in the current buzzword):

Full war chests

This means that all three will have ample resources to spend in the main areas of the fight: data centres, cloud services and the periphery. In data centres, Google is ahead, but Microsoft is catching up in size and sophistication. Apple has most to learn, but this, too, seems only a question of time and money. Just as much of hardware has become a commodity, knowing how to build huge data centres may not be a big competitive advantage for long. And data centres can get only so big before scale ceases to be an advantage.

So you need lots of them, like google's three dozen. Where to build? You build them where the tech people are (because you want lots of technical employees who can drive in and press reset buttons on google's 2 million servers...) and you build them where energy is cheap. E.g., the cutely-named Apple-Google Power Corridor is located in North Carolina's "Research Triangle", a tech-university area located at twin cities of Raleigh/Durham. So they've got the personnel base, and:

“We’ve been working together with pofficials [sic?] from Caldwell County to market this idea for several years,” said Millar. “Duke Energy serves both sites, and is competitive with its pricing,” which is typically between 4 and 5 cents a kilowatt hour for industrial customers.

“One of the things that’s driving the competitiveness of our area is the power capacity built for manufacturers in the past 50 years,” said Millar. “Having that capacity and those redundancies has helped the region. We’ve got other sites and other buildings ready to go as well.”

They've got the energy! Power, of the energy form, underpins the new economy. Energy economics might not be a new idea: it supports China's booming economy (see chart at bottom). So whatever one thinks about the USA's politics of dabbling around from the Middle East to China, playing the Great Game in the energy belt, there are correlations of importance there.

The negotiations are part of a longstanding effort by the West to try to halt Iran’s nuclear program, which many in the West say is geared toward producing weapons. Iran says the program is designed to generate energy.

Geographically, politically and economically, a new currency based on the kWh is not an outlandish idea.

Posted by iang at October 18, 2009 10:04 AM | TrackBack

Err maybe I'm being a bit dense here but why is this news?

The economy is based on the use of renewable and non renewable resources.

Ultimatly the only renewable resource is energy (which comes from the sun).

All other resources are not renewable (untill we get cheap long range space transportation) they are only recyclable in one way or another.

The classic recyclable example is iron we use considerably more iron each year than is taken out of the ground as iron ore.

Unfortunatly we are reducing the available amount of recyclable iron in three ways. Firstly we are locking it up in longterm infrastructure (buildings etc). Secondly by dumping it in landfill and thirdly in the sea.

As far as manufacturing economics are concerned to make a "good" we have to take raw resources and apply "work" to them.

Work in the fundemental sense is the use of directed forces. These are as the result of converting a coherant energy supply into incohearant heat (the ultimate form of polution as it is not recyclable).

Money is the abstraction of work.

Thus there are two basic forms of wealth, those based on renewable resources (energy), and those based on non renuable resources (raw materials)

The creation of "financial wealth" is generaly bassed on energy (work) not on raw materials.

Ultimatly he who controls the energy supply controls the financial wealth of those he favours. And he who controls the water supply controls mankind.

History has shown us the carnage that ensues when the water supply is controled for political or ideological reasons.

The same applies to energy (Russia is currently experimenting in political control by manipulating other nations energy supply).

The US and other WASP nations economies have been controled for the last half century by the oil oil/gas producing nations (the counter balance being the implied threat of war or embargo). The half century before that by the coal producing nations.

Oil and gas are rapidly becoming scarce and difficult to obtain resources. Some estimates are that the Arabian Gulf area resources have about 20 years of economic supply left.

Various Arabian Gulf nations are using their oil wealth to build up their infrastructure, education and manufacturing capability etc as they know what is going to happen.

Likewise various WASP countries are starting to restart nuclear power plant building and the stock piling of the appropriate atoms.

Which brings us around to the Axis of Evil countries and their nuclear developments.

Are they doing it for energy security most definatly yes (as are WASP and other nations).

Are they doing it to develop nuclear weapons, no and yes.

No because the infrastructure and resource requirments are enormous to build up a realistic and usable nuclear deterant.

Yes because it gives huge political leverage with the major WASP nations.

But for leverage they only need to test one or two labaratory devices, they do not need the vast infrestructure to manufacture weapons and their delivery systems.

Is the US trying to stop them because of a vague threat of nuclear weapon use or because it wants to control them by making them energy dependent (in the same way a drug dealer makes addicts)?

Who knows but without the delivery systems nuclear weapons are only of use for local deterant not distant offence.

The traditional delivery system of choice has been the ICBM or rockets which brings us around to the space race and the current resurgence in reaching the moon.

One big debate going on at the moment is the unsigned international moon treaty. This has many asspects that are similar to the international south pole treaty.

Many nations are regreting the "hands off" nature of the south pole treaty as it is perhaps the largest of the reserves of relativly easily obtainable energy and raw material resources that are nationaly unclaimed.

It is one of the reasons the UK fought the Falklands war as when it comes to dividing up non national reserves on earth it is usualy defined by size of coastline divided by distance away.

There is no established protocol for other planitary bodies and space objects. Therefor the old "wild west" land grab rules appear to apply (and possibly the "space carpet baggers").

But why bother the last time man went to the moon it was because the US Political ego had been baddly brusied by the CCCP doing things first. So the US set a goal which they had a chance of winning by supirior industrial capability. It is why NASA's fortunes went down hill imediatly after Neil and Buzz put down on the moon. That famous picture of the boot print (Buzz's) on the moon was NASA's self signed death warant as far as gifted government money was concerned.

So why the recent re-interest in the moon by other nations and some comercial organsations.

Well the moon has an interesting resource that has very high value and low mass that may become highly desirable in the near future. The nation that controls the moon and this resource will end up having a very very large say on what goes on in the world in slightly less than a century.

This resource is the raw fuel for fusion reactors, which will (it is envisioned) replace the current and short term nuclear fission reactors.

It might account for why the worlds most renound "long term" political outlook nation (China) is getting involved in the space race big time, whilst the nation with the shortest term political out look (USA) has effectivly pulled out.

Will we see the decline of the US to world "paranoid hill billy" status well that's upto the US politicos and it's electorate, but it will revolve around energy control or the lack of it.

But as I said at the begining I did not think this was realy news...

Posted by: Clive Robinson at October 19, 2009 01:56 AM

Clive, I think your long reply answers your question :)

For the last 8 or so years, when I've outlined the theory of dollar shift, I've heard that sense that tells me my audience is thinking "you're just another crazy conspiracy theorist." So, yeah, one could possibly be guilty of a little "told-you-so" smugness.

On the other hand, if after all that time, the answer is "that's-not-news" 10 minutes after we finally get some meeting of the minds, that tells me the audience isn't really participating at all. Wanna buy a firewall?

Posted by: Iang at October 19, 2009 03:17 AM

What with the NSA's grand vision, I should think that it would have included a power house for each data center's electricity and chilled water needs.

Harvard does it.

MATEP (electricity, chilled water, steam). At the time, second largest centrifugal chillers in the world:

Blackstone Steam Plant (steam):

Small foot prints, too.

NSA's vision is not grand enough?
NSA should switch to power generation?

> Oil and gas are rapidly becoming scarce and
> difficult to obtain resources.

I don't know about that, there is sooooo much politics and *religion* (organized worship) involved. After all, 70-75% of oil in the ground is owned by governments today, not to mention some large percentage of refineries, dockage, pipelines and tank farms. So naturally the world isn't "obtaining resources" that it could and above ground supply isn't what it could be. The below ground supply of oil, gas, coal: no shortages at all. Good for hundreds and hundreds of years. There's that massive Brazilian government find off the coast, and that massive one in the Gulf of Mexico, too. Massive amounts of oil sands. How come nobody ever mentions coal liquifaction, a tech that's been around since before and particularly during WWII? Wonder what the politics there are. And, nobody mentions that many old drill holes not being sucked on anymore have been found to have rising oil levels in them.

Higher prices will help supply:

CRB weekly bar chart:

CRB monthly bar chart:

Wait till the religious start screaming price gouging by big oil companies not realizing that their saviors (governments) are the biggest part of the problem.

The whole scene is right out of Atlas Shrugged. "From fact to fiction in 50 years." - Hettinga? By the way, it's out in Spanish: La Rebellion de Atlas.

Anyways, getting back to the NSA, back to studying:
Network Forensics Evasion: How to Exit the Matrix

Posted by: bob at October 19, 2009 12:33 PM

The Demise of the Dollar?

Ending the world's dependence on the U.S. dollar may appeal to investors holding gold and silver as a hedge against inflation, but no other currency is likely to replace the greenback anytime soon. Independent Institute Senior Fellow Alvaro Vargas Llosa explains why in his latest syndicated column.

The dollar is rapidly losing its luster, according to Vargas Llosa. In recent years Republican and Democratic lawmakers alike have weakened it by running up a $1.4 trillion budget deficit and a national debt exceeding $12 trillion. Federal Reserve Board monetary policies have doubled the money supply. "No wonder the dollar has lost more than 10.3 percent of its value in the last six months and foreign central banks, during the second quarter of this year, placed only 37 percent of new reserves in dollars," writes Vargas Llosa.

But no existing currency is sufficiently attractive to replace the dollar. Europe's economies are moribund and its governments are heavily in debt. On the other side of the globe, Japan's huge public debt and poor economic performance make holding the yen unattractive. And except in Hong Kong, China won't let foreign investors purchase the stocks of companies headquartered there, a restriction that limits the international appeal of the yuan. With no credible alternative to the dollar, Vargas Llosa recommends that cautious investors "keep buying gold and silver--more silver than gold because central banks, those consummate manipulators, own 20 percent of the world's gold and therefore have the power to stem its rise in the short term."

Posted by: "Are We Stuck with the Dollar?" by Alvaro Vargas Llosa at October 20, 2009 02:12 AM

The National Security Agency (NSA) is setting up a new $1.5 billion cybersecurity data center at the Utah National Guard's Camp Williams near Salt Lake City. ...

Posted by: NSA to build $1.5B cybersecurity center near Salt Lake City at October 27, 2009 10:34 AM

@ by Alvaro Vargas Llosa,

"Europe's economies are moribund and its governments are heavily in debt."

Some of Europe's economies are still in recesion (ie UK) but most others have pulled out of it, and some never realy went into recesion, oh and similar with the debt

The reason appears to be related to inadiquate banking legislation and the politicos not letting them go to the wall.

Those with least regulation and the largest banks appear to have been hit the hardest.

Oh and of course in these "unfortunate nations" people will have seen the outcry over some bank organisations planning on paying out bonuses to staff that apear to equate to 80% of their debt to the nations concerned...

So back to business as usual then, just one small change the governments blinked so the banks know that the threat of "being ruined" won't effect them. So no risk on even more outlandish money schemes for them then...

I guess we'll see "Fred the Shred" become some senior advisor to the UK Gov again real soon...

Posted by: Clive Robinson at October 28, 2009 08:00 AM
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