28 APR 17 – Executive Intelligence Summary – Forward Observer Shop

28 APR 17 – Executive Intelligence Summary


[wcm_nonmember]In this EXSUM… (4866 words)

  • BLUF: Battle of Auburn
  • Last week’s power outages in San Francisco and other cities
  • North Korea SITREP
  • Defense in Brief
  • Overview of the Left’s reaction to the Alt-Right
  • First Quarter GDP growth in at 0.7%
  • And more…


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(ADMIN NOTE:  There was no EXSUM last week.  I apologize for being missing in action.  I had a weekend event in North Carolina, and then left early to attend the Battle of Auburn where the Antifa black bloc was scheduled to disrupt a speech.  Being mainly on the road and sporadically without internet made publishing the EXSUM impossible.  To make up for it, I’ll be recording the entire first day of the SHTF Intelligence Course in video format for you to watch and follow along.  On Monday night (01 May), I’ll be attending the May Day march hosted by Red Guard Austin, who view themselves as a vanguard group of communist revolution.  I would like to continue to attend Antifa/black bloc/communist/anarchist events to learn more about who they are and what they do.  It’s my sincere intention to be able to regularly report on the Antifa movement, their offshoots and their strategies, and gauge how they’re doing as a movement.  Doing this while tracking developments with Russia, China, and North Korea is difficult, so I’ll be bringing on another analyst to tackle those topics, so thank you for your continued support.  Also, if you decide to attend these events, please get in touch with me and write an after action review about your observations.  With your permission, I’d like to share those on the Intel Dashboard so we can better disseminate information.  More on that in the coming weeks…)


Bottom Line Up Front:  Last Tuesday (18 April), I went out to Auburn, AL to see what was then being dubbed the “Battle of Auburn”.  White nationalist Richard Spencer planned on speaking at the university and a contingent of Antifas (anti-fascists) from Atlanta was scheduled to make an appearance as well.  (Auburn University cancelled the event two days prior, citing “security concerns”.  An attorney filed suit against Auburn on behalf of Spencer and a federal judge ruled that Auburn must allow free speech on its campus, so the show went on.)  It’s the first time that I saw Antifa in action, so I’ll provide my thoughts and observations in the following paragraphs.

I arrived in the vicinity of Foy Hall, where the speech was scheduled to take place, around 2:00pm.  I linked up with the Alt-Right guys just south of Foy Hall and spoke with them for a while.  (Here’s the FO podcast about the event. What follows didn’t make the podcast.)  I was actually impressed; most of those guys were physically fit.  They formed a “white bloc” and wore white shirts and khaki pants to counter the “black bloc” of communist and anarchist agitators who threatened to disrupt the speech.  One of the guys had on Marine combat boots and said he was prior service when I asked him.  Another guy had a military-style backpack and “spoke the language,” so I assumed that he also had prior military service.  The rest were young; I’d say in the range of 19 to 28, maybe a couple of guys in their 30s.  That’s not surprising because the Alt-Right skews young, and who else could take off a Tuesday to be there?  Early on, a couple of what I presume were core or experienced members told everyone to maintain an air of professionalism and to remember that they were there for self-defense, not to be caustic, demeaning, or in pursuit of violence.  They were, however, by all indications ready for violence.  If a street fight broke out, I would say that they held the advantage.

About 6:00pm, the black bloc showed up, dressed in all black, light armor (such as shoulder, knee, and elbow pads), and wearing an assortment of black masks and helmets.  Some were wearing black skull caps.  At first, there were about eight to 12 who showed up.  (I took some pictures and videos that I’ll upload on a separate post on the Intel Dashboard, under PIR 3.)  Most were wearing black skinny jeans and t-shirts.  The Antifa group ranged from overweight to underweight; perhaps three or four had the potential to hold their own in a street fight.  With this as the backdrop, now we know why Antifas attack with pepper spray and bike locks.  One Antifa black bloc member had a scarf that ran through the hasp of a Masterlock, which was used as a weapon.  Almost every member had a messenger back or backpack on.  Doctrinally, black bloc members carry a change of clothing and anti-chemical countermeasures (such as gas masks or bandanas soaked in lime juice, which they keep in a plastic zip lock bag) in case law enforcement uses gas.  There were a couple of make-shift shields, and most members wore eye protection (like goggles) at some point during the afternoon.

There were two key members that I noticed, both of whom were easily in their 40s.  My best guess is they came up in the anarchist/activist punk scene as it developed in the 1990s.  One member to whom I will refer as Antifa A seemed to be a leader of the group because he was instrumental in their movements.  He was almost always at the front of the pack when they moved and I observed him speaking to the group.  Another individual, Antifa B, I spoke with as Antifa was leaving.  During this conversation, I asked him about the group’s goals, to which he said that they had no goals.  I also goaded him into saying that he’d traveled from Brooklyn to help organize the Atlanta Antifa group.  He told me, “They’re just not as organized yet.  That’s why I’m here.”  (I’ll post the video of him saying that on the write-up page, linked below).

The Antifa black bloc did very little throughout the evening, due in large part to police enforcing anti-mask laws.  Those laws were designed to combat the Ku Klux Klan from holding rallies in public spaces with their faces covered, and were used last Tuesday to de-anonymize the black bloc.  The core strategy of the black bloc is to wear the same style of clothing so it’s difficult for police to identify anyone who causes violence.  A sucker punch, a pepper spray, or another incident of violence is perpetrated, and then the member is absorbed back into the bloc.  Because black bloc members are all wearing the same clothing, law enforcement quickly loses the suspect.  Additionally, there were 50-100 police officers there and quickly dealt with any cases of violence.  In other words, Antifa was outnumbered and unmasked.

Here’s the link to the entire report.


Priority Intelligence Requirements:

PIR1: What are the current indicators of systems disruption or instability that could lead to civil unrest or violence?

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

PIR3: What are the current indicators of organized political violence?

PIR4: What are the current indicators of economic, financial, or monetary instability?

PIR1: What are the current indicators of systems disruption that could lead to instability, civil unrest, or violence?

Last week’s power outages in San Francisco and other cities

Last Friday, news outlets reported the loss of power in at least three US cities.  The outage left 90,000 in San Francisco without power.  According to PG&E, the outage was caused by a fire at a power sub-station.  A “catastrophic failure” of of a circuit breaker was to blame, according to one official.  “When it failed, it created a fire in the insulation surrounding the breaker … Something went wrong with the breaker to cause it to explode.”  Also on Friday, a smaller power outage affected a subway station in New York.  There were also allegedly reports of power outages in Los Angeles.  I know this may seem scary to some, and I was initially shocked upon hearing of total power loss in of San Francisco, New York, and Los Angeles (which turned out to not be the case — case in point).

There are really three things that we need to consider to place this story in proper context, so let’s start with the source of this information.  Prepper and survivalist websites who offer free articles make money from advertising.  That means that they need large volumes of web traffic, which means outrageous stories are sometimes published because they will be shared via social media.  Anytime we read information on these sites, keep in mind that they may report unverified information, or the information may be entirely fictional.  You get what you pay for.

The second is that power outages occur frequently and can affect lots of people.  Our grid is aging, our critical infrastructure that powers the grid is aging, and power grids are often strained by growing populations for which they weren’t built to support.  The outages in San Francisco and New York occurred in the morning, when electricity use peaks.

Finally, US critical infrastructure is indeed vulnerable to cyber exploitation.  Unless we have access to the data, we shouldn’t rush to judgement and say that the power outages were or were not a result of a cyber attack.  It’s entirely possible that one or both were the result of a cyber attack.  But power outages occur on their own due to mechanical failures.  I myself find it curious that a circuit breaker just “exploded,” but sometimes truth is stranger than fiction.  I’ve been writing for over a year that we will experience more and more systems disruption, whether it’s due to the failure of critical infrastructure or cyber exploitation.  At this point, the cause of the power outages are not as nearly as important as how people reacted, and the cause of power outages in the future are not nearly as important as how people will react, especially if the power outage affects you.

From what I’ve read, it looks like both power outages were very limited, which is not indicative of a cyber attack one way or the other.  The San Francisco outage affected around 10 percent of the overall population there, and the New York outage was very limited, as it affected a subway station.  The bottom is line to be prepared because we’re going to see this again.


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

The prospects of global conflict continue to revolve five geopolitical actors: Russia, China, North Korea, and Iran. In the event of war with any of these nations, consider domestic systems disruption a distinct possibility.

North Korea SITREP

On Thursday, President Trump told reporters, “There is a chance that we could end up having a major, major conflict with North Korea.”  Until then, US officials prefer to work diplomatically to achieve a non-nuclear North Korea, albeit it’s a highly unlikely prospect under the current conditions.  This week, the White House briefed most of the Senate on the North Korea situation, which had mixed results.  Nevertheless, the Congress is set next week to pass another round of sanctions against North Korea in continued hopes that deteriorating economic conditions will cause the Kim regime to buckle.

For their part, Russia and China have both taken a more active approach to solving the North Korea problem, or at least appearing to solve the issue.  Sidelined and kicked down the road during the Obama administration, North Korea now poses a growing threat, and Trump’s willingness to push North Korea to the front of his foreign policy agenda lights a fire under Russia and China to do something before the US pursues military action.  According to recent polling, 40 percent of Americans believe that North Korea poses an “immediate threat” and a majority (67 percent) say they support using the US military to defend South Korea.

According to SECSTATE Tillerson, China has asked North Korea to stop its nuclear tests after Chinese officials described the situation as “critical”.  China obviously prefers to avoid a military conflict on its door step, and may fear that they will be burdened by the effects of US military action.  ‘You break it, you buy it’ is in effect as a conflict will absolutely carry the dual role of a massive humanitarian effort.  North Korea has an estimated 25 million residents, most of whom live in abject poverty in the peasant class.  When I left the intelligence community in 2012, the latest accurate, open source estimate on the North Korean military pointed out 80,000 special operations soldiers who would wage a guerrilla war against South Korea.  Not only are we talking potentially hundreds of thousands of civilian casualties, but we’re also looking at areas of South Korea that would likely end up resembling war-torn Iraq or post-war France or Germany. Throughout the Cold War, the North Korean military trained for the eventual invasion to unite the two Koreas.  This is the nearly singular purpose of North Korea force projection, outside of its nuclear and intercontinental ballistic missile (ICBM) arsenal.  By now, you’ve probably heard that Seoul is within range of North Korean artillery pieces, as North Korea carries out a large scale, live fire artillery exercise.  Keep in mind that artillery fire in a conflict gives away its position, and those positions would be struck as quickly as could be identified.  In fact, I can guarantee that US intelligence analysts have a stack of such targets, probably numbering in the hundreds if not thousands, that would be “actioned” in the opening hours of a declared war.  But an air campaign is only a small piece of this puzzle, as securing nuclear material in North Korea is one of the top priorities.  If I had to wager, the threat of radiological “dirty bombs” is a distinctly potential course of action for North Korea; not to mention the high likelihood of cyber attacks against South Korea, Japan, Australia, and/or the United States.

In all, war with North Korea would be an absolute nightmare.  We look at recent statements from SECDEF Mattis, who has repeatedly said that North Korea must be stopped, and we estimate the Kim Jong-Un regime’s unwillingness to abandon the goals of his father and grandfather.  The conclusion is that there aren’t too many options other than a military conflict, however limited or unlimited it might be.  Here’s to hoping that the Chinese can negotiate our way out of a conflict.


Defense in Brief:

According to a new Defense Science Board (DSB) report, the vulnerability of US military communications satellites is a “reality that should be considered a crisis to be dealt with immediately.”  These satellites run the risk of being rendered inoperable through jamming, cyber attack, and possibly laser attacks, especially by China which has demonstrated those capabilities.  “Under severe stress situations, jamming can render all commercial SATCOM and most defense SATCOM inoperable, except for the low- and medium-rate modes of defense extremely high frequency” satellite communications. In a conflict, reduced communications via satellite could disrupt command and control, global communications, communications between aircraft and ships, targeting, and every user of military satellite communications — which is to say, a great deal of the US military.

In a separate report, the DSB also noted that US leaders should prepare for greater challenges to global air superiority.  Instead of expecting air superiority in the battlespace at all times, the military should realistically look at “on-demand air superiority,” where the US is able to achieve superiority in limited areas and for limited amounts of time.  This shift is due largely to increasing adversary capabilities and air assets that are stretched thin across the globe.

According to US Pacific Command’s (PACOM) Adm. Harris, the US Navy can only meet about half of its submarine requirements in the Pacific Ocean.  This comes at a time when I’ve warned that both Russia and China share the goal of challenging US dominance in the Pacific.  Within the next 10 to 20 years, we could realistically be looking at incurring major challenges to controlling the Pacific, and possibly losing Pacific naval dominance after that.  Last year, the Navy reported that it could only meet 62 percent of its obligations in the Pacific, showing a massive downtrend in the number of submarines available in an increasingly contested space.  China currently has around 160 submarines operating in the Indo-Pacific region.  The US has a total of 52 attack submarines. Keep in mind, however, there’s a significant disparity between the capabilities of US submarines and their near-peer competitors, however, potential adversaries are making long strides in increasing capabilities in sub-surface warfare.

PIR3: What are the current indicators of organized political violence?

Overview of the Left’s reaction to the Alt-Right

I spent a fair amount of time this week reading reflections from leftist websites about how they view the Alt-Right movement.  They universally point out that the Alt-Right has developed a “street cadre” capable of opposing leftist organizers, and are becoming more antagonistic towards the Antifa movement.  They’re also concerned with stemming the expansion of Alt-Right ideologies, which include nationalism (ethnic white and American nationalism), populism, anti-globalism, anti-immigration (legal or otherwise), and support for rolling back Clinton- and Obama-era federal policies that sustain progressive activism.

The Alt-Right is really a big umbrella.  At the low end of the spectrum you have current and former libertarians and conservatives who are now pushing further right because Republican political leaders have done so little to stop progressivism.  “Conservatives have conserved nothing,” is their rallying cry. Many call themselves the “Alt-Lite” because their support for Western Civilization ends where more hardcore ethno-nationalism takes over.  The white nationalists who say that whites deserve their own country in America make up a majority of the Alt-Right.  (A very small portion of the Alt-Right are actual neo-Nazis.  And we can split this group into three categories:  1. real neo-Nazis; 2. trolls who are eliciting a reaction out of liberals just for fun and; 3. federal agents.)

The Alt-Right points out that no one says that Japan is too Japanese; no one ever says that there’s not enough diversity in China or Nigeria or Israel.  (Not even the Saudis are taking in refugees.)  They ask why the Japanese, Koreans, Israelis and a host of other nations can severely restrict immigration in order to save their race and culture, but whites nations can’t.  “Diversity is a false god,” and “Demographics is destiny” are some slogans.  Asking why America is diminishing its white, Western culture by limitless immigration from radically different places with radically different cultures is central to the Alt-Right.

At the base of the Alt-Right movement is a desire to become more Western (Alt-Lite) or more white (Alt-Right).  They say things like, “When you import third world people, you import third world problems,” and point to growing Islamism and refusals of many immigrants to assimilate into American culture.  They look at degenerate behavior and actually call it degenerate.  Unlike cultural Marxists, they say there is a moral difference between right and wrong. They recognize that equality doesn’t exist in nature; that nature is always filled with inequalities.  They question why black pride and gay pride and Asian pride is celebrated, but white pride is wrong.  To be fair, all of those are forms of collectivism, which brings up a very good question: what happens when two ore more sides of the spectrum have opposing self-interests and vote according to those self-interests?  It seems that minorities who vote in their ethnic or collective self-interests are inherently bad for whites, and whites who vote in their ethnic and collective self-interest are inherently bad for minorities.

I do happen to believe that “demographics is destiny,” and that more Americans are prioritizing collective interest over national interest.  As America becomes less white, collective self-interest changes the political and ideological landscape of the nation.  We look at the massive demographic shifts occurring in Europe, in places like Sweden and Germany.  These are progressive utopias, yet we see that an overwhelming majority of incidents of child molestation, rape, and murder are caused by non-native Europeans.  Somalis, Pakistanis, overwhelmingly foreign nationals who are Muslim are causing most of the violence across Europe.  It’s no surprise that these immigrants and refugees are capitalizing on Europe’s open door policies.  Europe represents seven percent of the world’s population, but over half of global welfare payments!  In the past year, we’ve seen both Germany and France prepare what are essentially national guard units to respond to cases of terrorism.  In the beginning, Europe, with its shrinking demographics, may have seen immigration as a way to expand the tax base and off-set negative population growth rates.  But what’s ended up happening is that these nations with limitless immigration policies are committing national and cultural suicide.  There are towns in Germany where 70% of residents under the age of 18 are non-European.  We’re talking about, in the next five to twenty years, entire regions of Europe will not resemble Europe at all.  Western Civilization is committing suicide, and Europe’s going to fight a war over this.  We’re going to watch as non-native immigrants battle each other in the streets (which is already happening in limited fashion) and wrestle control of these regions from each other.  Limitless immigration in America is going to cause the same problems.

The Left recognizes that more Americans are waking up to this reality, and it’s one reason why the Alt-Right is rising in influence and membership.  The Left certainly sees a concerted effort to bring conservative and Alt-Right free speech to even far Left college campuses.  That’s problematic for Leftists because now there’s a real cultural paramilitary, for lack of a better term, which is willing to oppose them.  The Alt-Right, “white blocs,” Proud Boys, and other groups are essentially the Right’s answer to Leftist agitation groups.  Leftists see the Alt-Right movement as a way for the Trump administration to carry out violence through a sort of proxy war.  One Leftist website went so far as to call the Alt-Right future Nazi brownshirts and a reserve army in waiting for Trump’s fascist revolution.  Whether or not these websites believe it, they are deliberately selling the idea that Trump is a fascist bent on punishing his political enemies and purging progressives from American culture.  We’ve yet to see any indication of that, but this is their line of propaganda perhaps because this was exactly the path that the Obama administration took.  Obama must surely regret that he didn’t push Left hard enough while in office, because this should be payback.

The Leftist websites — the cadre of social justice warriors, communist agitators, and Leftist-anarchist activists — continue to encourage the disruption of the Alt-Right, and have several planks through which they will try to accomplish this.  The first is to shut down all forms of free speech that represent Alt-Right issues.  Groups like By Any Means Necessary (BAMN — http://www.bamn.com/) call for protests, general strikes, and conflict in the streets to prevent Alt-Right (and increasingly simple conservative) speech.  Second, Leftists seek to identify and solve problems like poverty and isolation (which they say cause individuals to support fascist ideas) through “collective solutions,” which means community organizing and voting for collective interests.  Because a large part of Alt-Right and Alt-Right-leaning people are younger, white, working and middle class, the Left has their work cut out for them in trying to recapture this demographic, a majority of whom voted for Donald J. Trump.  But the more Trump moves away from his base and the more promises he breaks, the greater the opportunity the Left has.  And finally, the Left sees themselves as having to offer a less violent message to potential supporters of the Alt-Right.  I think a great many of them recognize that while marching in the streets and violently attacking Alt-Right supporters is critical to their strategy, this also paints their movement in a poor light to those still on the sidelines.  I would not expect violence to end, but I would expect the Left might become more judicious in their approach to violence.  Today’s conservative/Alt-Right rally in Berkeley occurred with minimal violence, which probably had more to do with Ann Coulter backing out of her planned speech than with Leftist protestors’ unwillingness to commit a greater PR faux pas.  Meanwhile, this weekend’s Traditional Workers Party (TWP) event in Pikeville, KY is shaping up to be one of those recent exceptions where violence is likely to occur.  The TWP is a white identity, national socialist group with strong neo-Nazi branding.  Ahead of the event, Pikeville City Hall passed a law that bans wearing face masks and hoods in public.  That’s the surest way to disrupt an Antifa black blocs, as long as police enforce the law.

My understanding of the Antifa movement’s direction is developing, but I’ve seen numerous calls for a halt to violence, citing that it only gives greater motivation to the Alt-Right to gear up and go looking for a fight.  Additionally, outside of progressive strongholds like Berkeley, Portland, Seattle, Chicago, and New York City, Antifa just doesn’t appear to be that strong.  It’s occurred to me that Antifa may be a sideshow in a larger political effort.  It’s difficult for me to envision wide scale Leftist violence, such as a revolution, as long as Trump is in the White House.  But indicators of organized political violence are certainly there.  It’s finally time that we acknowledge that we’re in a cultural war that I think is headed towards a violent conflict.


Haymaker: Antifa’s new gym

One other thing I want to share this week is a new gym called Haymaker.  An Antifa group out of Chicago is trying to raise $50,000 to open a gym where boxing and mixed martial arts are taught to Antifa members, ostensibly as a place to make new friends and network.  The true goal, obviously, supports a key activity:  street fighting against fascists.  If you’re concerned about political violence in your area, then I would keep an eye out for gyms or clubs where Antifa members train.  (Watch:  https://vimeo.com/212171139)


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

First Quarter GDP growth in at 0.7%

Despite the optimistic outlook among businesses and investors, first quarter (Q1) economic growth came in at 0.7% — the lowest in three years.  That slow growth may not be as bad as it sounds, however.  “The rest of the story” is that Q1 growth tends to underperform, due in part to the government’s inability to accurately calculate GDP growth during this period.  Since 2014, Q1 numbers have been lower than Q2.  This may be why Wall Street analysts are calling for a second quarter bounce.  President Trump’s agenda calls for four percent annual GDP growth, which is more than twice the annual average under Obama.  Until the new tax plan unveiled this week, Trump has offered only economic rhetoric which has driven stock prices higher.  The price-to-earnings ratio sits around 26 (official data for March), which is as high as it’s been since 2009.  What the Trump administration does economically — tax cuts, spending cuts, reduced regulations for business, etc. — are the psychological factors that are likely to drive second quarter numbers.

If you’re like me, then you’re wondering exactly where the US economy is right now.  Eight or more years of financial and economic doomsday analysis muddied the water and it still clouds the thinking of many.  Since the inception of this report, I’ve maintained that a financial doomsday is unlikely — truly a low frequency event — and instead we’re more likely to experience a slow and bumpy decline.  Yes, there’s always the possibility of a financial cyber attack, a trade war, or some other massive event that would very rapidly throw the nation into a tailspin, however, outside of a black swan event, we’re looking at a long-term decline.

Here’s where we are today:  The “Trump bump” is still effect in the markets.  This week, the Nasdaq hit 6,000 for the first time ever (in the longest bull run in 25 years), but the stock market is not an accurate gauge of economic health. The unemployment rate, as deeply flawed as it is, sits at 4.5 percent.  The April consumer confidence index is 120, off of 17 year highs in March at 125.  And the inflation rate, as calculated, is a manageable 2.38 percent (just above the Fed’s target rate of two percent).  Yes, the economy is doing unequivocally better now than just a few years ago, however, we still have some fundamental weakness, aided by overall poor financial health.

My key assumption is that is that the US economy will channel — periods of upswings and downturns — with a long term bias towards lower downturns.  The economy has severe vulnerabilities, whether we’re talking about the effects of extreme inequality (redistribution is not a solution), the unassailable national debt problem, growing personal debt in the face of wage stagnation, looming conflicts with near peer competitors, inaction in Congress and a potential government shutdown, automation that drives out the workforce, and a number of other factors that threaten economic and financial stability… but the overall sentiment right now is that, pending a black swan event, we may be in store for an economic upswing.


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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