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2013/12/10

Don’t Let Amazon Steal Your Data

The Sovereign Investor

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Don't Let Amazon
Steal Your Data

By Bob Bauman JD, Offshore and Asset Protection Editor

Dear Sovereign Investor,

Last week, Amazon CEO Jeff Bezos pulled an impressive pre-Christmas marketing stunt.

Bezos hinted that his online shopping behemoth was working on delivering light merchandise by airborne drone in 30 minutes or less. His clever ploy reverberated in the halls of online commentary for days. Bezos put the image of Amazon, the world's largest online shopping destination, front and center in everyone's minds just as we're ramping up our Christmas shopping.  

Well done, Jeff!

Bezos is one of the world's top entrepreneurs, and he's very determined. He has consistently reinvested most of Amazon's revenue, rather than take it in profit, preferring to build an unassailable market position first.

Bezos could almost certainly get permission to fly drones for Amazon. Federal regulators generally gush over the tech sector, which is a major political contributor to Democrats. And I'm sure certain other parts of the government would just love to piggyback on the sophisticated electronic tracking systems required to make his plan work.

So Bezos will probably pull off rapid-fire drone delivery of socks, underwear and the like if he really wants to.

The question is: Do we want him to?


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After all, America's tech companies haven't exactly covered themselves in glory when it comes to respecting and protecting our privacy. Verizon, AT&T, Facebook, Microsoft, Google, Apple and many others have now been exposed for giving our private information over to government goons.  

The tech companies are quick to point out that they don't do this voluntarily. They say they have to obey the law, or that data about us has been accessed surreptitiously, as in a shocking recent case involving secret U.S. National Security Administration (NSA) taps on Google's fiber optic cables. They say they're just as concerned about this invasion of our privacy as many of us are.

But the problem isn't with what the tech companies really want or intend. The problem is the opportunity their possession of so much private information creates for those who would abuse it.

Information is power, and power corrupts. Even if it doesn't corrupt Jeff Bezos, or Mark Zuckerberg, or Steve Ballmer, the power of our data is still there in the servers of big online data companies, a tempting target for those who are already corrupted by it, like the NSA.

Many of us, of course, don't take threats to our privacy lying down – for example, using a secure web browser like TOR. Amongst other things, TOR encrypts your IP address, making your physical location and identity impossible to discover.

Unfortunately, TOR isn't the solution to the threat posed by Amazon or Google.

To see why, let's say I want to make a private deal with you. I meet you in a secure coffee shop. Our transaction is safe. But then you take my information to your office, and your office is raided. Oops.

Think of TOR as the secure online coffee shop where you make a deal and of Amazon as the office where your data is stored. In most cases, the real danger isn't your online transactions; it's what happens to your information afterward, when it's out of your hands. TOR isn't going to help you then.

But there is a way to protect your privacy, with or without TOR – by making the information you use to transact online inaccurate or misleading.

After all, there's no law – yet – that says you have to provide Amazon or any other online retailer with your real name, physical address or personal financial details in order to sign up for a service and make purchases.  

Jeff Bezos is happy to take your money even if you buy under a false name, pay via a credit card in the name of a New Mexico LLC with anonymous members and have items delivered to an anonymous mail-drop address.

In other words, there's no reason you can't operate online using an alter ego – another "self" or, preferably, more than one. All it takes is a few simple steps: pseudonyms, anonymous LLCs for your credit-card accounts, mail drops and so on. That way, even if the Feds raid Amazon or Google, they won't be getting your real data.

Behind this shield of self-constructed anonymity, you can shop to your heart's content.

Of course, a determined adversary will be able to figure out your real identity with time and expense. But for the purposes of government snooping on the servers of the Big Data companies, you'll remain an anonymous alter ego in the crowd.

And therein lies the problem with Jeff Bezos's little drone-delivery scheme. It crosses an important line in the inexorable drive for ever-greater online shopping "convenience" – one you must resist.

Up until now, the systems used by online firms to sell us stuff quickly and easily haven't needed to know where we are. But Amazon's drones would need to know our precise physical location, and would rely on a sophisticated GPS-based guidance system that would make most cops' hearts pound with joy.

Bezos, with his holiday-season drone ploy, has unintentionally highlighted a bright line in the privacy wars: Keeping our real identity and physical location secret is our ultimate privacy defense. On this side of the line, there's still scope for anonymity and privacy. On the other side, privacy is well and truly gone.

We don't have to cross it, and I believe most of us won't do so – at least not willingly.

Faithfully yours,

Bob Bauman JD
Editor, Offshore Confidential

P.S. An alternate identity is a must, but alternate investments are, too! EverBank's Euro CD provides such an opportunity. To find out more, click here.

TODAY'S EDITOR

Bob Bauman JD

From second passports to offshore trusts, Bob can help you make the most of what offshore has to offer with his Offshore Confidential. Click here for his latest report.

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This work is based on what we've learned as financial journalists. It may contain errors and should not be considered personalized investment advice. Therefore, you should not base investment decisions solely on what you read here. It's your money and your responsibility. Certain investments such as futures, options, and currency trading carry large potential rewards but also large potential risk. Don't trade in these markets with money you can't afford to lose. CFTC Rule 4.41 - These results are based on simulated or hypothetical performance results that have certain inherent limitations. Unlike the results shown in an actual performance record, these results do not represent actual trading and may have under-or over-compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated or hypothetical trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. Past results of any individual or trading strategy published by the Sovereign Society are not indicative of future returns by that individual or strategy, and are not indicative of future returns which could be realized by you. The Sovereign Society receives a marketing fee based on our relationship with EverBank.

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