Hawala - Economic Warfare

[Music] one of the most secure reliable and covert methods of transferring money is the hawala network hawala a term that originates from an arabic word for transfer is an informal way of transferring money from one person to another without actually physically moving the money the hawala system has been in extensive use throughout asia and the middle east since at least the 8th century and the development of the silk road helped this financial system spread throughout the continent so what is hawala and how does this network function this is how most hawala networks work so say person a wants to send money to person b well to do this they're going to get a couple of other people involved broker a and broker b so person a is going to give 100 cash and a password to broker a who in turn is going to communicate with broker b and say hey i've just got some money for person b and the password is laundry well broker b is going to shoot back a message acknowledging that and on his end a broker broker b or person b whoever it is going to communicate in this case it's person b approaching broker b and they're going to say hey the password is laundry and then broker b is going to say hey th municate in this case it's person b approaching broker b and they're going to say hey the password is laundry and then broker b is going to say hey that's cool here's your money and in this case the fee a fee is subtracted from this uh it depends on what kind of uh network it is is what the fee is going to be but in this case let's just say the broker b takes out five dollars for his trouble so he pays 95 dollars to person b well then broker b is going to the debt is going to be between broker b and broker a so now broker b is going to communicate with broker a and say hey bro you owe me 100 now so you can see that if this happens one way the debt is transferred so now broker a owes broker b 100 well if you were to do this the other way around say if person b wanted to send money back to person a or another person entirely wants to do this you can balance this equation out quite easily with future transactions so that no money physically ever crosses this line it's all based on who owes what to whom so you can see how this is a really nice and interesting way of conducting finances without actually ever transferring money that's why the hawala networks are usually referred to trans nice and interesting way of conducting finances without actually ever transferring money that's why the hawala networks are usually referred to transferring money without transferring money so as one can see this system has some very unique benefits this system is mostly used by islamic or middle eastern nations today in order to avoid paying taxes though we in the united states might think that we have the world's most corrupt politicians the governance situation in most middle eastern nations is quite shocking as such the overwhelming majority of citizens in places like afghanistan do everything they can to avoid paying taxes because they know that politicians will quite literally and openly pocket the money so the hawala system is very helpful for people in the middle east to avoid paying taxes on transactions because the government never knows that the transaction occurred as such hawala is very illegal in most nations on the planet however most nations also know that hawala isn't something that can easily be stopped so they turned a blind eye to it or try to get their tax money in other ways also the hiwala network is great for functioning in a place where the banking structu ed a blind eye to it or try to get their tax money in other ways also the hiwala network is great for functioning in a place where the banking structure might not be the most secure many americans these days are buying up gold and silver as insurance against hyperinflation or even something as drastic as the collapse of western banking systems but once again people in the middle east have been dealing with collapsing banks for centuries one of the most trusted institutions in arabic culture is the hawala system which as we've learned is very much reliant on trust and with banking structures failing on a routine basis and governments failing every few years or so throughout the middle east the hawala is a reliable system that has worked based on trust for millennia trust that has not been placed in modern western banking systems for good reason for those of us that have the benefit of living in a first world nation the hawala system is absolutely crucial to implement into our culture as well for one the hawala system allows for covert transactions to take place and with federal agencies and private banks themselves spying on you and surveilling your every purchase every dollar that transactions to take place and with federal agencies and private banks themselves spying on you and surveilling your every purchase every dollar that can be transferred without anyone knowing about it is a dollar well spent these days cryptocurrency is extremely popular for that very reason but at the moment cryptocurrencies are still pretty volatile and the governments around the world are trying their hardest to regulate crack ban surveil and otherwise tamper with that system but hwala networks can't be hacked they can't easily be tracked there are little to no records and they work in the absence of things like social media and the internet as long as humans have a way of communicating with each other over distances from carrier pigeons to the pony express the hiwala system will work just fine hawala networks also bring in an element of organization and unity on the community level for arab societies hawala networks are just as much cultural as they are financial as they are based entirely on trust they are a great building block for truly building unity in a local area granted in western society where trust in everything is at an all-time low this is no easy task but hawala net or truly building unity in a local area granted in western society where trust in everything is at an all-time low this is no easy task but hawala networks don't necessarily need to be a bedrock of trust at first they just have to be more trustworthy than a bank which even right now isn't as big of a barrier as one might think and nowadays with every single digital thing being surveilled from cisco wi-fi routers to doorbells a lot of people are going back to a more physical security mentality or at least we are sure and notebook and pencil can be confiscated in a search but it cannot be hacked or surveilled by federal agencies unless they physically get the notebook which these days is far less likely than they are to crack a password online so the culture of hawala networks is great for fostering a mentality of physical security in a world of digital surveillance so let's take a look at that in a bit more detail so as you can see the huala network is really great when it comes to a security aspect and here's why if person a were to be captured or interrogated or caught or something like that this is all of the information they're going to know they're going to know person b's name e captured or interrogated or caught or something like that this is all of the information they're going to know they're going to know person b's name the person they're going to send the money to they might know broker a's name maybe it might just be a pseudonym right and they're going to know how much money was sent well likewise broker a is only going to know maybe person b's name if they give it to them it might just be the password in some more complex and shady networks um and they're going to of course know broker a and broker b are going to know each other of course and they're going to know the password and the money likewise burker b is going to know a similar bit of information person b's name broker a's name the password and 100 cash and person b is going to know the person who sent them the money maybe their broker's name and 100 the actual money itself so as you can see this is what we call compartmentalization no one person knows the entirety of everybody else involved in the system and this is great because it's very hard to take down these networks as the cia and the us government found out when they discovered that hawala networks were being used to fund funnel mo ard to take down these networks as the cia and the us government found out when they discovered that hawala networks were being used to fund funnel money for terrorist actions it's impossible to go after these hawala networks maybe you can take down a broker or two for the most part it's going to be impossible to get everybody because it's so compartmentalized they physically just don't know how the entire system works and who's involved so that works out great for people like us who just want to be a little bit more private in a world of overwhelming surveillance and looking back at this system you might say okay well this is all well and good for transferring money one way or even two ways if you do it twice honestly but what if you're trying to transfer a good or a service well that's pretty easy as well so you could go through this entire service but add in one last step in which person b gives the coordinates of a dead drop location to person a once the money is complete they can then directly communicate with person a and give them the location of goods or a service using the actual location of the dead drop as an extra means of security so that's how you can use a huawei net hem the location of goods or a service using the actual location of the dead drop as an extra means of security so that's how you can use a huawei network to exchange goods or services quite easily as one can clearly see we in the united states do not necessarily have brokers on each street corner or or in every back alley of every business so in the united states we don't necessarily have this infrastructure already set up so if you're going to create a hawala network of your own you're going to have to build it from the ground up and that's not going to be particularly easy to do and also in the united states trust is not necessarily something that is common in society nowadays especially among people who are anonymous from one another so a good starting point for developing a hawala system eventually and and starting uh baby steps right to learning how to move good services and money in a quasi-private covert manner one of the easiest ways to do that is with a dead drop system and this is sort of like a hawala system but it's it's quite different in the in that there's little trust between both parties meaning that person a and person b are completely anonymous from each other a quite different in the in that there's little trust between both parties meaning that person a and person b are completely anonymous from each other and there is no relationship so this system which we will cover a lot more in depth in future episodes is quite simple but it requires a lot more work on both persons part for one person a can leave money in a dead drop they can leave money in a cashed location physical currency it doesn't have to be money it could be any sort of currency right then they give the coordinates of that location to person b who then can go collect the money or the system or whatever system of value that you are using to conduct this transaction then once they have the money they can then leave the good that a second different dead drop and which is located in a different location than the first one and then they can give the coordinates to person a who can then go collect the goods now this is great because it's sort of like a double blind both parties are creating their own dead drop locations and therefore have the advantage of being able to know the areas that they're going to be functioning in they're able to pick areas that are really hard to surveil have the advantage of being able to know the areas that they're going to be functioning in they're able to pick areas that are really hard to surveil things like that and also this is a one-time use system so once both dead drops are used you're probably not going to use them again because then somebody else or a past buyer can uh then use that drop location to surveil it and then bad things can happen so this is a good way to stay as anonymous as possible while exchanging goods and services with somebody else who might not necessarily be trustworthy and also if this system is used it is a great way to start moving towards a hawala network system once you start realizing that the person you know you start developing a relationship and you start doing things like that well it's easier to it's easier to start a hawala network so as one can see the hwala network is a great system to work toward even if it would be difficult to implement in a western nation in its entirety but by normalizing this system and getting one's feet wet with things like double-blind dead drops or transactions that don't necessarily occur within the traditional banking systems we can certainly start moving in ngs like double-blind dead drops or transactions that don't necessarily occur within the traditional banking systems we can certainly start moving in that direction at least for smaller transactions and simple money transfers which is a good start like almost all of the content we produce here this is one of those topics in which the groundwork needs to be laid right now so that we will have the option to use it in the not so distant future plus this is a great way for fostering a sense of community and social trust in a society that trusts no one being able to build these relationships and make friends now is absolutely critical for truly unifying our communities [Music] [Music] you