EXECUTIVE INTELLIGENCE SUMMARY – 17 JUN 16
The SHTF Indicators section answers our Priority Intelligence Requirements. Appendix: Collection of acronyms and definitions used.
[wcm_nonmember] In this EXSUM…
- The current state of Russian espionage activities in America
- Russia begins “snapchecks” for war readiness
- China shadows U.S. ships ahead of RIMPAC
- Israel stages its largest wargames ever
- An overview of economic collapse
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Last month, I described that our Executive Intelligence Summary would be changing in order to give me the ability to focus solely on SHTF Indicators — that is, describing the potential SHTF scenarios (e.g., a cyber attack on critical infrastructure, economic instability, or political violence) and where we sit on that spectrum. The idea is for us to focus on the strategic and operational levels, and then our subscribers can focus on describing the effects on their communities. Truth be told, there are many, many more requirements that could have a large impact on the States, but the five areas I’ve settled on will likely have the greatest impact.
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? (Russia, China, Middle East)
PIR3: What are the current indicators of political-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?
PIR5: What are the current indicators of Islamic terrorism or the expansion of the Caliphate?
PIR1: What are the current indicators of systems disruption that could lead to a SHTF event?
Cyber issues continue to plague U.S. critical infrastructure this week. That’s going to be a theme in every EXSUM because we’re very vulnerable to cyber attacks. In a first case of cyber terrorism, this week a Kosovar national plead guilty in U.S. court to hacking an unnamed U.S. company’s website and providing sensitive employee information to Islamic State representatives “with the understanding that ISIL would use the [personally identifiable information] to ‘hit them hard.’”.
Although it’s not yet a trend, we could easily see additional cyber attacks that aid the targeting efforts of terrorism of any flavor. Leaks of sensitive information on law enforcement officers, politicians, business and community leaders, and other groups or individuals could make targeting an easier task for lone wolf Islamic terrorists. Cyber terrorism was recently described by one security professional as a “hyper-evolving threat”.
Critical infrastructure continues to be a top priority for U.S. adversaries, as we saw this week Russian hackers target the Democratic National Committee (DNC) computer network. According to the latest publicly available information, a Russian hacking group likely associated with the SVR, Russia’s foreign intelligence service, penetrated the DNC network last year and monitored sensitive chats and emails from DNC staffers. In April of this year, a second group, likely associated with the GRU, Russia’s military intelligence branch, accessed the DNC networks, but were discovered after attempting to download two files containing opposition research on Republican presidential candidate Donald Trump.
Russia attempted to cover their tracks earlier this week by offering ‘Guccifer 2.0’, a play on the first Guccifer, the arrested Romanian hacker who accessed Hillary Clinton’s private email server. Guccifer 2.0 blogged sensitive documents, going so far as to thank U.S. firms for mistaking his work for Russian intelligence. Ultimately, Guccifer 2.0’s attempt at owning up to the attack in order to throw authorities off the case of Russian intelligence was unsuccessful, and is likely Russian disinformation.
Finally, in late May, GRU hackers attempted to spear-phish users of a U.S. government computer system. Russian intelligence attacks, right now, are aimed at intelligence gathering, however, their ability to target U.S. critical infrastructure is an SHTF indicator. Presented with the opportunity and motive, Russia could case significant issues, which could certainly lead to an SHTF event.
PIR2: What are the current indicators of an outbreak of global conflict? (Russia, China, Middle East)
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 largely depend against which conflict is initiated. We’re certainly at risk of cyber attacks in the event of any of the three regions. Systems disruption, like the prices and availability of fuel, is also a top concern.
NATO/Russia: According to U.S. officials this week, there are hundreds of Russian spies in America, whose activities likely include laying the groundwork for asymmetric attacks in the event of a NATO-Russia war. While war is not inevitable, for months we’ve been edging closer to conflict. Strong rhetoric continues to be a hallmark of the prelude to war. The NATO Secretary General this week said that a cyber attack on a NATO member nation could trigger a war, while Russia is highly suspected of carrying out several cyber attacks in recent months, most recently against Sweden.
NATO and Russia both continue to rearrange forces in order to move military units closer to the border; most specifically in the Baltic region. Because an unannounced Russian military exercises last year occurred the border of Estonia and Latvia, a major concern is that a military exercise involving tens of thousands of troops could easily turn into an invasion. With the declining demographics of Russia, Vladimir Putin is likely desirous of re-incorporating ethnically Russian populations living abroad. Both Estonia and Lativia have large ethnically Russian populations.
Meanwhile, “snapchecks” of Russian military readiness began this week and are expected to last until 22 June. While the snapchecks are aimed at testing war readiness, NATO did receive advanced warning about the exercise and should have come at no surprise. Meanwhile Russian spy ships and planes continue to monitor maneuvers in the Baltic Sea and elsewhere around eastern Europe, stretching as far as the North Sea and English Channel.
Finally, a year after Forward Observer reported it, the combat readiness of the Army’s combat brigades still sits at or near thirty-three percent (33%). If war does break out, then we should be prepared for heavier casualties than we experienced in Iraq and Afghanistan.
U.S./China: The United Nations is set to rule within weeks on China’s claim to a string of islands in the South China Sea. The effort to resolve the dispute is chaired by Japanese representatives, causing China to abandon cooperation in the matter. Early reports state that the UN is likely to rule against China, however, the ruling is not enforceable and is not likely to cause any change in the South China Sea.
The Chinese Navy is actively shadowing U.S. and Japanese ships ahead of RIMPAC, the annual exercise involving nations from the Rim of the Pacific. China is an observer this year, giving them ample opportunity to gather intelligence and judge capabilities of nations likely to be involved in the potential conflict in the South China Sea.
Middle East: Israel is staging its largest war games ever, set to center on a war against Hezbollah, where the Israeli Defense Forces (IDF) will test out new weapon systems. Syria is likely resuming the production of weapons for Hezbollah, and this week, the former chief of the IDF Homefront Command warned that Israel could be on the receiving end of 1,000 rockets per day in the next Hezbollah war.
Israel and Turkey took the first step to mending ties this week, as the Turkish chargé d’affaires met with Israeli Prime Minister Benjamin Netanyahu. The move is expected to bolster Israeli cooperation with NATO.
And the U.S. House approved the continued sale of cluster bombs to Saudi Arabia, which is sure to anger Iran and their proxies throughout the region.
PIR3: What are the current indicators of military, government, political, or social-related instability or violence that leads to widespread domestic conflict?
Black Lives Matter and other communist-backed anti-Trump protestors continue to be the most violent political factions. This week, a Black Lives Matter protestor interrupted a University of Missouri vigil for the Orlando victims by shaming white people, saying, “I wish this many people came out to our racial demonstrations and our Black Lives Matter movements.”
Wikileaks founder Julian Assange is threatening to release more controversial emails associated with Hillary Clinton’s time as Secretary of State. Still, Assange doesn’t think it’s likely that Clinton will be prosecuted, even after the FBI investigation.
PIR4: What are the current indicators of economic, financial, or monetary instability that leads to civil unrest?
Investors in Europe are concerned about the level of risk incurred by the 23 June Brexit vote. Most economists agree that Britain will have a rough time financially and economically in the near-term if Britain leaves the European Union. Financial troubles for Europe, along with the potential and/or eventual collapse of the European Union, could affect American markets as well, which is why this is a good indicator of U.S. and global financial instability.
In the past year, the People’s Bank of China (PBOC) has dumped around twenty percent (20%), or $250bn worth of U.S. government debt in order to prop up the yuan and its own markets. From the end of July last year to March of this year, the PBOC slashed about 38% of its U.S. stock ownership. This signals continuing financial instability in China, and worsening conditions, such as a global recession, could increase China’s sell-off of U.S. detb and stocks.
We’re still tracking the likelihood of a recession that begins this year as probable. We have high confidence that our next recession will begin within the next 12 months. (Charles Hugh Smith laid out a great case for the structural collapse of the U.S. economy, 2016-2019.)
PIR5: What are the current indicators of Islamic terrorism or the expansion of the Caliphate?
A recent poll in Germany found that nearly half of Turkish Muslims living there agreed that following laws of Islam was more important than following the laws of the land. Seven percent said that violence is justified for expanding Islam. This is a trend across Europe, where the failure to assimilate into Western culture is chocked up to religion. And we should also keep in mind that, while at just seven percent, the percentage of Muslims who agree that violence is justified is actually likely to be higher.
Since the Orlando terror attack, 441 Syrian refugees have been imported in America.
Appendix:
DNC: Democratic National Committee
GRU: Russian military intelligence
IDF: Israeli Defense Force
RIMPAC: Rim of the Pacific Exercise
NATO: North Atlantic Treaty Organization
SVR: Russian foreign intelligence
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