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This post has been updated since it was first created.
COMMENT: A recent post  by “Pterrafractyl” highlights some consummately important considerations.
Brazil and Germany have been partnering in what might be a joint offensive against the U.S. and U.K.
As one reads this post and Pterrafractyl’s article, remember that the Three Borders  area of Brazil is a hotbed of overlapping criminal, Nazi and Islamist terrorist activity.
Do not forget that Brazil is where Glenn Greenwald is hanging his hat these days.
The initiatives being undertaken by Germany and Brazil–ably and exhaustively detailed by Pterrafractyl in the above post–might very well embody an attempt at supplanting the U.S. as an internet giant. This would be a consummate element of economic warfare against the United States.
In addition, providing encrypted communication capability that NSA and GCHQ couldn’t decipher would permit the furthering of criminal activity and terrorist  warfare to an almost unlimited extent.
The Four Horsemen in the Pterrafractyl post refers to terrorist and criminal activity.
Some thoughts–paraphrasing Pterrafractyl:
“The social implications of mainstream strong encryption are such that there’s just no way any government would encourage the broad use of encryption standards that it can’t decrypt itself. And yet Germany and Brazil are now both talking about ring-fencing the internet to prevent collection of encrypted traffic (which the NSA can decrypt). They’re also talking about creating their own industries and encryption standards.
Germany and Brazil already have industries that create products they can’t decrypt. That’s for select clientele that has the money to invest in the kind of security that that Brazilian banker had. (see below.) They just aren’t going to mainstream strongly-encrypted web services that they can’t even decrypt themselves. The un-decryptible industries exists in the EU and US and is growing.
So the topic of encryption and the Cypherpunk’s own acknowledgement that strong encryption really does invite in the Four Horsemen of the Infopocalypse (and we should just accept that ) is going to be important because there is just no way in Hell Germany or Brazil are actually going to create industries that sell products that they, themselves, can’t decrypt. And all indications so far point towards them trying to jump-start their IT sectors by selling “secure” products that are obviously going to be hackable by the Germany and Brazilian IT sector.
This is going to be a HUGE topic going out, because if a market like the EU changes its encryption standards, the whole IT industry fragments and needs to decide which standards to adopt or pay the cost of adopting both.
More likely is a big fight over international standards at the upcoming conference in Brazil in April. New encryption standards wouldn’t be implemented immediately and be resolved soon because of the money at stake. It would be so destructive that it couldn’t happen. Brazil and Germany are jockeying for playing key positions in formulating the next-generation of international digital standards.”
We also call attention to a very important article  from Al Jazeera, which sheds further light on the possibilities of a Bormann capital network  criminal, economic and terror offensive in Latin America. Note that Paraguay (along with Argentina and Brazil) is one of the “Three Borders.”
Again, we present a paraphrasing of Pterrafractyl’s observations in this regard:
“Brazil is selling the “we won’t tap your cables that pass through our territory” pitch to Paraguay and Bolivia. Or, at least the article (which was written by someone very supportive of Brazil’s plan), is implying that the because the cables running Bolivia’s and Paraguay’s traffic to the coasts will be in Brazil’s sovereign territory ‘it’s much less likely that they will be tapped than their undersea equilvalents’. The unspoken assumption is that Brazil wouldn’t dream of tapping its neighbor’s cables. Who knows, maybe the pipes for Underground Reich’s cables really will get hands off treatment!
The other implication to that is that a lot of intra-South American traffic might be be travleing through Paraguay or Bolivian in order to keep it in the continent. It’ll be interesting to learn about who’s going to own those pipes!”
We also note that, in 2009, a Brazilian banker was found  with encrypted files that were encrypted in such a way as NO ONE could decipher them!
One wonders how many other bankers have undecipherable encrypted files, who they work for and what is on the files!
EXCERPT: ...The third and less documented area of development consists of private overland fiber cable systems linking Brazil to each of its South American neighbors. These follow a pattern similar to Brazilian private-sector investment in undersea cables but on a much smaller scale. This is particularly important with regard to the landlocked countries of Paraguay and Bolivia. With no independent access to the undersea international cable systems, they depend entirely on this form of transitive connectivity through their coastal neighbors. Because these overland cables will lie exclusively within the sovereign territories of their respective users, it’s much less likely that they will be tapped than their undersea equivalents. They are thus likely to provide effectively private communication channels between Brazil and its neighboring countries....
EXCERPT: Cryptographic locks guarding the secret files of a Brazilian banker suspected of financial crimes have defeated law enforcement officials.
Brazilian police seized five hard drives when they raided the Rio apartment of banker Daniel Dantas as part of Operation Satyagraha in July 2008. But subsequent efforts to decrypt files held on the hardware using a variety of dictionary-based attacks failed even after the South Americans called in the assistance of the FBI.
The files were encrypted using Truecrypt and an unnamed algorithm, reportedly based on the 256-bit AES standard. In the UK, Dantas would be compelled to reveal his passphrase under threat of imprisonment, but no such law exists in Brazil.
The Brazilian National Institute of Criminology (INC) tried for five months to obtain access to the encrypted data without success before turning over the job to code-breakers at the FBI in early 2009. US computer specialists also drew a blank even after 12 months of efforts to crack the code, Brazil’s Globo newspaper reports.
The case is an illustration of how care in choosing secure (hard-to-guess) passwords and applying encryption techniques to avoid leaving file fragments that could aid code breakers are more important in maintaining security than the algorithm a code maker chooses. In other cases, law enforcement officials have defeated suspects’ use of encryption because of weak cryptographic trade craft or poor passwords, rather than inherent flaws in encryption packages.