11 NOV 16 – Executive Intelligence Summary – Forward Observer Shop

11 NOV 16 – Executive Intelligence Summary


[wcm_nonmember]In this EXSUM…

  • DSS Chief: ‘We’re in a knife fight’ to protect supply chains
  • Earthquakes continue to pose threat to oil infrastructure
  • Hackers disable heating in apartment buildings
  • Russia & China SITREPs
  • Calexit: The Leftist secession movement
  • Rogers: Coming civil unrest and financial instability
  • And more…


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Bottom Line Up Front:  Last week I judged the likelihood of a major disruption as moderate, and fortunately Election Day passed with no catastrophes as had been feared by many.  While officials from the CIA, DHS, FBI and others were “all hands on deck” monitoring internet traffic and other activity from their command centers, there was actually very little disruption outside the expected voting machine problems.

And now we get onto the business of a Trump presidency, having dodged a bullet in Clinton.  But with as much collective relief as we’ve felt this week, I don’t expect everything to change (and perhaps relatively little will actually change).  Without even touching foreign policy, we’re still going to have the same domestic problems, including:

1) a massive, lumbering federal bureaucracy that’s feeding the budget deficit and national debt;

2) significant questions about how Trump is going to pay for all his campaign promises;

3) substantial gaps in military readiness and national security;

4) indications of an upcoming recession in Trump’s first term, and possibly very soon;

5) a stock market expected to consolidate after hitting all-time highs;

6) weak economic conditions and inflation eating away at the income and savings of hard-working Americans;

7) fundamental problems with the future solvency of entitlement spending and Social Security payments;

8) negative trend lines for the strength of the US Dollar over the intermediate and long terms;

9) George Soros, Open Society Foundations, and other assorted globalist and Marxist cabals exploiting a very deep distrust, and hatred for some, of Trump and the Republican Party (and capitalism) among most minorities;

10) what will certainly result in domestic unrest, riots, and protests against Trump’s policies;

11) gaps in national and cyber security, which are likely to continue to wreak havoc on financial and internet infrastructure;

12) aging segments of critical infrastructure, to include segments in disrepair, that are going to lead to systems disruption that affect the lives of Americans;

13) and unresolved questions about Trump’s ability to lead, govern, and fulfill the promises of his campaign supporters.

To that end, Clinton’s loss has removed some of the domestic risk of World War III (unless Trump does an about-face on policy towards Russia), and replaced it with an increased likelihood of domestic SHTF scenarios.  The bottom line is that the likelihood of an SHTF event hasn’t diminished, just changed shape.



Priority Intelligence Requirements:

PIR1: What are the current indicators of systems disruption that could lead to a SHTF event?

PIR2: What are the current indicators of an outbreak of global conflict?

PIR3: What are the current indicators of military, government, political, or social-related instability or violence that leads to widespread domestic conflict?

PIR4: What are the current indicators of economic, financial, or monetary instability that leads to civil unrest?

PIR1: What are the current indicators of systems disruption that could lead to a SHTF event?

DSS Chief: ‘We’re in a knife fight’ to protect supply chains

Late last month, chief of the Defense Security Service spoke about military supply chains and was quoted as saying, “We’re in a knife fight and most people don’t know it.”  He continued: “Foreign intelligence services are using globalization of business to get inside our supply chains and steal our secrets, steal our technology.  At no time have they ever had the access and the ability to come from different avenues as they do right now.”


FBI: Internet Online Attacks on Private Industry Will Continue

“The exploitation of the ’Internet of Things’ (IOT) to conduct small-to-large scale attacks on the private industry will very likely continue,” according to an FBI bulletin posted last month.  Part of the problem, they explain, is that the source code from last month’s denial of service attack is public, which has enabled some small scale disruptions since the 21 Oct attack. (DOWNLOAD THE BULLETIN)


Earthquakes continue to pose threat to oil infrastructure

On Sunday evening, a 5.0 earthquake shook small town Cushing, Oklahoma, which damaged several buildings.  Cushing is home to the largest commercial oil storage facility in North America.  The United States Geological Survey has warned for years of a growing likelihood of large earthquakes across central Oklahoma, so there’s an obvious potential to disrupt oil pipelines and storage facilities.


Musk: How to survive a robot takeover of jobs

One of Bernie Sanders’ talking points from the Democratic primaries are that robots and artificial intelligence are expected to take over one-third to half of US jobs in the next 20 years, which represents a massive — and perhaps the largest — case of systems disruption in the history of the US.  With potentially millions of Americans out of work, tech visionary Elon Musk said that it presents the opportunity for governments around the world to provide a Universal Basic Income.  After tracking this and other similar phrases for the past several months, I believe it will become a more popular concept and will play a substantial part of future elections.  And that means that it threatens liberty in America and around the world.  (Read the article.)


Hackers disable heating in apartment buildings

We’re increasingly confirming the ability of state-sponsored and criminal hackers to cause systems disruption not just limited to state targets.  A denial of service attack targeting two apartment buildings in eastern Finland caused heating infrastructure to go out.  Although the attack was brief and relatively small in its effects, it does illustrate vulnerabilities in internet-facing infrastructure and indicates another line of potentially disruptive scenarios for the US.

PIR2: What are the current indicators of an outbreak of global conflict?

The prospects of global conflict continue to revolve around the usual players: Russia, China, and the Middle East. The ways in which global conflict could cause or contribute to a SHTF scenario in America are myriad and they largely depend on which conflict is initiated. We’re certainly at risk of cyber attack in the event of conflict in any of the three regions. Systems disruption, like the price and availability of fuel, is also a top concern that could cause a SHTF event.

NATO-Russia Situation Report (SITREP)

Although we should breathe a collective sigh of relief where it concerns immediate war with Russia, the election of Donald Trump doesn’t negate the possibility of conflict altogether.  The same underlying factors of a NATO-Russia conflict still exist, and Trump’s potential willingness to abandon NATO or his dedication to mutual defense under Article V is doubted, Vladimir Putin could become emboldened to continue his regional policy, which includes defeating NATO and expanding the influence of Novorossiya, the Russian Empire.

Late last month, the largest Army shipment of ammunition in decades was delivered to Germany, headed to US and NATO units stationed in central Europe and the Baltics.  The commander of the 838th Transportation Battalion was quoted as saying, “We continue to build up the presence in Europe. This will help with reassuring our allies, along with the common defense of Europe if needed.”  I still believe that a NATO-Russia conflict is probable, even if somewhat delayed by a Trump administration.


South China Sea SITREP

Although the prospects of war with Russia appear to be diminished after January 2017, US foreign policy against China is expected to heat up.  One of Trump’s plans for his first 100 days is to address China’s currency manipulation and unfair trade practices.  The negative effects of identifying China as a currency manipulator will have on US-China relations, coupled with Trump’s plan to grow the Navy and confront China in the Pacific, represents a growing likelihood of conflict with China.

At a time when the US Navy is the smallest since World War I, Trump’s new defense plan calls for expanding the Navy to 350 ships.  I’ve heard recent estimates that the Navy is currently down to 272 ships, and Navy leaders have cited an inability to cover their mandatory requirements for security patrolling.  Meanwhile, within the next five years, China is expected to field 100 submarines and will pose a significant challenge to the US Navy.  As a result, US Navy leaders have called for an increase in submarine warfare training.

All in all, we’re still looking at the exact same conflicts today as we were on November 7th.  Little has changed to the trends of military competitiveness among near-peer adversaries, and their willingness to challenge US military dominance in their regions still represents the potential for conflict.


US Navy sets sights on defending Pacific

Last Friday, the US Navy announced that it would step up training activities in the Pacific Northwest, in the waters between northern California and Alaska.  That area includes the Naval Undersea Warfare Center – Keyport Range Complex on the coast of Washington State.  Changes in the US Navy’s training regimen represent changing policy to defend US national interests as they become challenged by both the Russian and Chinese navies.

PIR3: What are the current indicators of military, government, political, or social-related instability or violence that leads to widespread domestic conflict?

Calexit: The Leftist secession movement

As liberals derided secession movements on the political Right during the Obama administration, the concept of California secession, dubbed Calexit, is being floated in response a Trump administration.  One venture capitalist announced that he would fund “a legitimate campaign to call for California to become its own nation.”  California represents the sixth largest economy in the world, however, given the massive financial problems I don’t expect that a California nation would be a sustainable, viable option.


Anti-Trump protests point to worsening domestic conditions

Anti-Trump protests in at least 18 cities and towns “erupted” in response Trump’s election, even if there was some question about their spontaneity.  Although most demonstrations were peaceful, there were numerous instances of violence, to include violence against Trump supporters.  We’ve seen some anti-Trump influencers and Black Lives Matter voices call for violence against Trump and/or his supporters.  Right now I think leftist violence is among the greatest SHTF threats we face (along with systems disruption).  The Trump inauguration is likely to shape up to see a large number of demonstrations, and judging by the GOP protests, they’re could carry a propensity for violence.

PIR4: What are the current indicators of economic, financial, or monetary instability that leads to civil unrest?

Rogers: Coming civil unrest and financial instability

In a recent interview, contrarian investor Jim Rogers warns that the world will encounter massive problems within a few years.  Significant quotes follow:

“The main cause is the Federal Reserve, and Washington, D.C., more broadly. They’re accumulating gigantic debts and doing huge amounts of money printing. That can’t last; it’s going to cause problems for all of us down the road. If you’re looking for a single culprit, it’s Washington, D.C.

It’s already happening. In 2015, for instance, twice as many stocks were down on the New York Stock Exchange as were up. It was disguised by the averages, but the averages are dominated by 15 or 20 big stocks that never go down.

Most stock markets are down around the world. Japan is already in recession. It’s just not visible to the press or to the public yet.  Something similar happened in 2007: You had Iceland go bankrupt. People didn’t even know where Iceland was or anything about it. But then that led to Ireland, which led to Bear Stearns, which led to Lehman Brothers. Before long, everybody knew something was wrong.

That’s the way these things always work. It starts with an outlier or marginal place, working its way through to, ‘Oh, my god, why didn’t they tell us?’ My point is, it’s already happening; it’s just not in the headlines yet.”


Mike Shelby is a former military intelligence NCO and contract intelligence analyst. He spent three years in Iraq and Afghanistan and is now the intelligence and warfare researcher at Forward Observer.

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