EXECUTIVE INTELLIGENCE SUMMARY – 24 JUN 16
The SHTF Indicators section answers our Priority Intelligence Requirements. Appendix: Collection of acronyms and definitions used.
[wcm_nonmember] In this EXSUM…
- USG playing catch up to cyber threats
- #Brexit results are in!
- NATO & Russian militaries warming up
- Republican National Convention safety concerns
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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?
Critical Infrastructure
If America experiences an SHTF event in the next year, my money is on a cyber attack. Tracking these events, even I’ve been amazed at just how dire our vulnerabilities are. I don’t think we see strength in any particular sector; the power grids, SCADA systems in critical infrastructure, and the financial sector all face very grave threats. This is a high-risk game. We’re by no means ‘wide open’, but I have little faith that we can successfully defend against a determined cyber adversary. And I have less faith in society to react appropriately to systems disruption on a wide scale.
This month, U.S. Cyber Command spent nine days during a “cyber 9/11” exercise which pitted them against a near-peer adversary like Russia or China. Although slated for full operational capability by the end of 2016, CyberCom won’t be fully operational until at least 2018. And still only half of CyberCom is at initial operating capacity. Think of it this way: half of CyberCom is barely walking in the crawl-walk-run spectrum. And from what little open source reporting was available from this exercise, I didn’t gather that CyberCom exactly hit a home run.
Another point of contention is that CyberCom’s domain often overlaps with privately-owned infrastructure. There could very well be a battle
between corporate cybersecurity and government cybersecurity personnel over who has control of that infrastructure. That’s going to be a very
gray area, and ultimately it’s going to lead to a national emergency in which government will take control of anything it wants. We can still argue about which parts of the Constitution are generally being upheld, but a sustained, major cyber attack is going to be a Constitution killer.
Based on what I’ve seen so far this year, we should absolutely be preparing for surviving in a grid-down environment. The overall likelihood is low; this is not an imminent event, but it’s a very high-risk situation. And we’re in the prelude to war against adversaries who can do it.
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: This week, Congress ordered the U.S. Intelligence Community to begin a review of Russian influence and funding of political parties in half a dozen European nations. Allegations came from the British that Russian influence operations were aimed at weakening NATO and European defense, and that Russia was exploiting Europe’s freedom of expression. Russia Today (RT) broadcasting out of London, as an example of a relatively minor influence operation, gave large amount of coverage to leftist politician Jeremy Corbyn in order to support his election. The radically leftist Corbyn ran on a platform of the UK’s nuclear disarmament and decreases in military spending.
In all likelihood, Russia’s influence activities in Europe — and in the U.S. for that matter — certainly run much deeper than state-owned Russian television broadcasting propaganda to English-speaking audiences. And it’s for that reason that Congress included a provision in the 2017 Intelligence Authorization Bill for bringing back the presidentially-appointed Active Measures Working Group, a remnant of the Cold War that was tasked with identifying Russian operatives in America. Last week, we reported that U.S. officials say there are hundreds of Russian intelligence operatives currently in the U.S.
As a rule, Russian diplomats in America are required to notify the State Department of their travel plans if they’re traveling outside of a 50 mile radius of their assigned post. But Russian diplomats started a practice of notifying State Department officials at 5pm on a Friday afternoon, exploiting those officials’ unwillingness to stay after normal business hours to investigate the travel request, opting instead to stamp it through.
Meanwhile in eastern Europe, troop buildups in the Russian border region are still the norm. NATO is pointing to Russian annexation of Crimea, and their de facto annexation of Luhansk and Donetsk, as proof that Russia has aspirations in the Baltics. One thing that annexed parts of Ukraine have in common with eastern Latvia and Estonia is a large density of ethnically Russian populations stranded there after the collapse of the Soviet Union. Putin feels that the Soviet collapse brought on national humiliation, and a restoration of the Russian Empire is a remedy.
For his part, Putin continues to not only mirror NATO military maneuvers, but also intimidate the region against NATO cooperation. NATO member Bulgaria announced that the nation would not be taking part in military exercises in the Black Sea days after Putin’s warning against those exercises. And last week, the Russian military started snapchecks aimed at testing combat readiness. Those snapchecks ended on the 22nd. Russian forces continue their invasion of Ukraine, along with their mission to prop up the Assad Regime in Syria.
Found in the yet-to-be-proven file, it looks increasingly likely that Putin is having fun at the European soccer championships. European soccer matches are know for their “hooligans” getting drunk and fighting the fans from rival teams in massive brawls. Russian soccer fans last week waylaid a group of English hooligans, causing French prosecutors to suspect that the Russian fans were actually Spetnaz special forces, sent to the match to beat up on English fans. I can believe that.
NATO and Russian forces are stretching right now. Military leaders realize that war is both avoidable and undesired, but the foreign policy objectives of the West and Russia make war nearly inevitable. The West wants Putin to conform to Western standards, including freedom of religion and expression. Putin is protecting Russian civilization by controlling religion and expression in order to prevent the encroachment of liberal values that he sees has corrupted the traditions of the West. It’s why expressions of “non-traditional” relationships are illegal in Russia, and why his political adversaries are still kidnapped and murdered. He sees himself as the incorrigible savior against the tides of the indecent and godless West, and he’s right.
U.S./China: Rim of the Pacific (RIMPAC) 2016 starts next year. It’s the biannual naval exercise consisting of some two dozen countries in the Pacific. Ahead of the exercise, U.S. ships in the South China Sea have been shadowed by the Chinese. And the Navy this week sent an additional detachment of electronic warfare aircraft to the Philippines. They’ll be training the Filipino military, however, patrolling in the South China Sea region and engaging in maritime domain awareness is also on the list.
The Canadian Security Intelligence Services published a report this week claiming that China “may be running out of easy victories” and that coalition of Asians nations may call China’s bluff on the Scarborough Shoals, an area under territorial dispute by the two nations.
Middle East: This week the Israeli government struck a deal with the U.S. to share cyber threat intelligence, as it continues to build cooperation with the U.S. and NATO.
In a sign that the Islamic State or al Qaida could be expanding operations against Jordan, in early June three intelligence officers were killed at a Jordanian General Intelligence Directorate building in Amman. The story was under a media blackout, and suppressed by the Jordanian government. Assassination of intelligence officers has been a routine occurrence in the Yemeni Civil War, where the Islamic State and al Qaida are also active. (For additional information, read this post from October 2015.)
PIR3: What are the current indicators of military, government, political, or social-related instability or violence that leads to widespread domestic conflict?
The president of the Cleveland, Ohio police union is warning that law enforcement is understaffed for the Republican National Convention. For weeks, law enforcement officials have been complaining that they won’t have enough police officers to provide security for the event and that convention-goers are “sitting ducks”. There are no less than a dozen organizations scheduled to protest. Forward Observer is currently preparing intelligence products ahead of the convention. Subscribers can follow along here as we battle track the riots.
And in an alarming but not surprising story this week, there are now more non-military government employees who carry firearms than U.S. Marines. I’m concerned that any number of factors could hasten the arrival of the de jure police state. Frankly, I don’t trust Clinton or Trump to prioritize liberty over safety.
PIR4: What are the current indicators of economic, financial, or monetary instability that leads to civil unrest?
#Brexit: UK votes to leave European Union
The markets predictably took a sharp turn downward after last night’s Brexit referendum. The Great British Pound lost 10% against the US Dollar, hitting a 31-year low, and the Japanese Nikkei was trading down before a 10 minute halt was called (it’s now resting down eight percent). U.S. stock futures were trading down in the ballpark of eight percent, and S&P 500 and Nasdaq E-mini futures both limited down (i.e., hit the negative threshold, so trading was stopped), while the S&P 500 Futures (Sept 16) traded down five percent.
For the past month, we’ve heard the storm clouds thundering doomsday for the UK and European Union (EU) if they decided to part ways. Will the UK economy suffer in the short-term? Likely, yes. Will the EU eventually break up? Very likely, yes. But the UK is not leaving the planet, just the EU, to which they pay £350MM each week for their membership (or rather should I say ‘paid’).
The UK is expected to have up to two years to renegotiate its economic ties with the EU, so the short term panic is a little much. As for the EU, Germany remains the economic powerhouse, which now makes up roughly 25% of the EU’s Gross Domestic Product. The weight on Germany’s shoulders just got a substantially heavier.
Polling shows that the Italians and French now favor a referendum on leaving the EU, too. Last night, National Front leader Marine Le Pen called for a French referendum and Geert Wilders called for a Dutch referendum, so there could also be a Frexit and Dexit. In short, the EU bureaucrats’ chickens are coming home to roost, and a blow has been struck against globalism. Right-wing UKIP party leaders are calling for British Prime Minister David Cameron to step down.
Cameron has repeatedly admitted that multiculturalism has failed, although it’s an ideology to which he has clung. If he’s replaced by a UKIP member, then we’re likely to see attempts to curb immigration. After a few more terror attacks or mass rapes in Europe, we could very well see attempts at mass deportation, much to the consternation of David Cameron. [UPDATE: At 2:24am CST, I just read that Cameron is out as British PM. He will resign by October.]
And that’s what this referendum was all about: bureaucrats in Brussels pontificating to the 28 member nations the way things will be. The British economy was hamstrung due to EU regulation, and mandated immigration and refugee camping, as it is wont to do, brought crime and suppressed wages. Britons simply threw off their Euro-chains and are attempting to save British civilization.
#Brexit: Domestic Effects
I do think we should be somewhat concerned here in the U.S. for three reasons. In the short term, while we probably shouldn’t be in panic mode, for months on end we’ve heard that U.S. markets are overbought and overvalued. They certainly don’t reflect the fundamentals we’re hearing about in the economy. Financial instability in Europe could be the catalyst the U.S. markets need for a correction. The Federal Reserve is fatally committed to propping up U.S. stocks, so the Brexit is far removed from being the deathblow to the U.S. economy that some in the extreme have predicted.
In the mid- to long-term, however, the dissolution of the EU as an economic trading bloc is going to hurt the European economy and the Euro as a currency. Aside from ensuring relative peace and stability in the Euro zone (because you shouldn’t go to war against your trading partners), EU members have enjoyed tariff-free trade. What would affect the U.S. economy even more is, should the EU begin to fracture and protectionist policies gain the favor of fearful citizens.
In a previous EXSUM, I’d mentioned that I thought the economy of the Eurozone was more likely to buckle before the American economy, and that Eurozone troubles are our financial bellwether. As we move into the next leg of the global slowdown, especially as continually dismal reports come out of China, I think we’re moving more swiftly towards the global reset. The central banks, as they have for nearly a decade now, are staving off that eventuality, and the expansion of their balance sheets have kept the U.S. resilient. The reset could be in five months, or it could be in five years, or it could be in five decades. It’s unlikely to be within five months, but I’m not convinced that we have fewer than five years, either. But one thing is sure: the coming collapse of the Eurozone is another data point leading the way.
PIR5: What are the current indicators of Islamic terrorism or the expansion of the Caliphate?
House Democrats are urging Secretary of State John Kerry to ramp up the administration’s goals of importing 10,000 refugees from the Syrian Civil War. Kerry declared last year that the U.S. would be accepting 85,000 refugees in Fiscal Year 2016. About 2,800 refugees have been admitted into the U.S. since the pledges were announced. And so far in 2016, the U.S. has accepted some 40,000 refugees overall. Four of the top seven countries from which refugees have immigrated are Muslim: Somalia (3rd; 5,780), Iraq (4th; 5,385), Syria (6th; 2,805), and Iran (7th; 2,049).
Europe continues to have its hands full with tracking terrorist threats. This week, Belgian police arrested 18 in terror sweeps after receiving credible threat intelligence. Due to infiltration into Europe and the Islamic State’s ability from abroad to inspire and encourage terror attacks, the next terror attack is just a matter of when.
There’s a lot of conspiracy and circular thinking out there when it comes to terrorism. People accuse the Islamic State (IS) and al Qaida of being CIA. They allege that terror attacks are faked, and that the terror threat is a puppet on a string. Here’s the truth — they’re only partially correct. Here’s a rundown of what we know.
- An incohesive foreign policy has disrupted the Middle East, and the Obama administration has compounded the problem of Iraq’s collapse and unrest across the greater Middle East.
- Continued U.S. actions in the Middle East destabilize the region. We’ve been engaged in a proxy war in Syria against Russia that we’re now losing. In the fight against IS in Iraq, the U.S. is actually now helping Iran expand its influence and control over the country.
- We know that the Obama administration funded groups including al Qaida; some of those groups later helped form the Islamic State. High-ranking military holdovers from the Saddam Regime form the core leadership of the Islamic State, and were the beneficiaries of U.S. taxpayer money.
- We know that the FBI sets up terror attacks in the U.S. in order to make arrests. We know that the FBI’s terrorism-related charges are almost always the result of the encouragement of terror activity.
- Like 9/11, the Orlando shooting was preventable. Several media outlets are reporting that the FBI wanted Mateen to pursue terrorist activities so he could be arrested, but they dropped the ball. They played with fire and the nation was burned. Orlando was not an intelligence failure; it was a failure to coordinate, especially after Mateen’s firearms purchases. We’re coming up on 15 years after 9/11 and the FBI is making the same mistakes.
- Democrats and some Republicans are now clamoring for gun control and expanded police surveillance powers. That’s the refrain after every terror attack. I’m not accusing the FBI of willfully allowing Muslims to commit acts of terror on U.S. soil, however, it does beg the question, who benefits from terror attacks?
Appendix:
EU: European Union
IS: Islamic State
RIMPAC: Rim of the Pacific Exercise
SCADA: Supervisory Control and Data Acquisition
NATO: North Atlantic Treaty Organization
UKIP: United Kingdom Independence Party
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About Brexit: What’s that old saying about when a ship catches on fire, the first rats to jump off are the best swimmers? I think the best swimming rats just jumped off the EU Ship. The only reason the Germans will not jump off the ship is because someone put those rats in charge of the wheel house. But the best swimming rats who are left on board next to the British and the Germans are the Dutch and they may go next. I think what the real risk is that the Euro currency and ECB are a failure and at some point that will fall apart. When it does, then the real economic problems start. When the Greeks were being limited in their ATM withdrawals and cash was in short supply, I got to thinking about what would happen if there was a situation like that here with the banks closed and long lines for limited money at ATMs? The whole Euro zone could face the same kind of problem in a year or two. I think it might be time to start stuffing $5 bills into empty dog biscuit boxes.
The immigration issues are as much a symptom of the angst that British and Europeans have about the EU as it is a side show, a red herring, designed to distract and keep people from pondering the real problems that lie ahead over there.
At first, I thought EU immigration was to prop up the tax base. But immigrants typically are net-takers of government programs. They drain the system and suppress wages. I think immigration to the West is actually about dissolving nationalism. Open borders, it’s what’s for dinner.