Strategic Intelligence Report for 24 November 2017 – Forward Observer Shop

Strategic Intelligence Report for 24 November 2017

Strategic Intelligence Report for 24 November 2017

ADMIN NOTE: The Holiday Season is upon us. The week of Christmas (25-29 December), we will be publishing both reports in a shorter format. After the new year, Strategic Intelligence will be published regularly on Thursdays, and Low Intensity Conflict on Fridays. Thank you for the support, and we hope that you have a wonderful rest of the year with us.

Priority Intelligence Requirements:

PIR1: What are the new indicators of political or governmental instability that could lead to collapse or failure?

PIR2: What is the current situation report and risk of war in each of the four flashpoints?

PIR3: What are the new indicators of systems disruption to the economic or financial industry that could lead to instability?

PIR4: What are the new indicators of systems disruption to the critical infrastructure that could lead to instability?

PIR1: What are the new indicators of political or governmental instability that could lead to collapse or failure?

U.S. nuclear weapons infrastructure is crumbling

America’s nuclear weapons manufacturing facilities and infrastructure are literally falling apart. CNN reported last year on the decrepit state of our nuclear weapons plants, but little has been done to rectify the problem since. According to the Department of Energy, there is a $3.7 billion backlog of maintenance that needs to be performed but the projects continue to be deferred (the can gets kicked down the road). In a number of cases, physical structures supporting the nuclear manufacturing industry date back to the 1940s and 1950s. The House has authorized more than $1.2 billion in funding to refurbish infrastructure, but the Senate has yet to pass the legislation. [source:] (Analyst Comment: The Pentagon wants to upgrade American nuclear weapons systems, many dating back to the 1970s, but this core deterrent mission cannot be accomplished without rebuilding the nuclear weapons manufacturing infrastructure. Nuclear deterrence is at risk unless our nuclear weapons are modernized.)

Pa. primary school teachers quitting over student violence

Some 45 teachers from Harrisburg, Pa., have quit their jobs due to constant attacks and violence from students, some as young as the first grade. According to Harrisburg Education Association officials, dozens of teachers resigned between July and October, with more following. “I have been kicked, punched, hit, scratched. I’ve had a student physically restraining me in from of my other students,” said first-grade teacher Amanda Shaeffer, in testimony before school board members. “And many of the personal things that I have bought for my classroom have been broken or destroyed.” She adds: “Many minutes are spent each day dealing with violence that is happening in the classroom.” She went on to note that such behavior makes it impossible to have a “safe, nurturing environment” for other students. Noted HEA President Jody Barksdale: “Teachers and students are being hit, kicked, slapped, scratched, cussed at…. and observing other students flip over tables, desks and chairs. Teachers have had to take the rest of their class into the hallway top protect them during these outbursts.” [source:] (Analyst Comment: This is happening all over the country and it is indicative of a serious breakdown in parenting, more than anything else. But unless addressed — and there are no signs this kind of behavior is being addressed — personal behavior will continue to coarsen and degrade, which in turn threatens to disrupt the civil society.)

PIR2: What is the current situation report and risk of war in each of the four flashpoints?

South China Sea SITREP

China continuing its SCS expansionism as world slumbers 

As the U.S. and much of the West remain focused on ISIS, Russian election meddling and ongoing brushfire wars in the Middle East, China is making great strides in controlling some of the world’s busiest, and most profitable, shipping lanes in the South China Sea. As President Trump continues to hold out what we believe is false hope that Beijing will seriously assist Washington in thwarting the North Korean nuclear threat, Chinese engineers are busily constructing new man-made islands while the military builds facilities on them “to buttress its expansionist claims and dramatically [expand] its presence at sea at the expense of its smaller neighbors.”

In other words, as the Trump administration and others in the West remain focused on far less important threats in all the wrong parts of the world, China is quietly, but steadily, moving ahead with its agenda to dominate the South China Sea and be able to dictate terms of passage (to its advantage, of course).

“Beijing’s under-the-radar advances in the South China Sea could be bad news for countries in the region, for U.S. hopes to maintain influence in the Western Pacific, and for the rules-based international order that for decades has promoted peace and prosperity in Asia. At the Chinese Communist Party congress last month, President Xi Jinping cited island building in the South China Sea as one of his top achievements so far, and touted the ‘successful prosecution of maritime rights.’ Those rights appear at odds with international law: Xi is now assuring nervous neighbors that China will offer ‘safe passage’ through the seas to other countries in the region.”

Outlook: This well-thought-out think piece hits the nail on the head regarding the mid- and long-term goals of China regarding its desire to control the South China Sea. While this ought to be very plain by now to policymakers in the United States and the West in general, there doesn’t seem to be any urgency to deal with the expansionism head-on in a manner that China would not only understand but respect.

There is much more at stake here than simply control over a waterway in which $5 trillion worth of trade passes annually. In addition to making rules that everyone else must follow — rules inherently beneficial to Beijing alone — locking up the South China Sea gives China carte blanche operational ability to isolate Taiwan…or Japan…or any other nation with which China has a beef (territorially speaking). That’s a huge strategic advantage and one that isn’t going to be abandoned by Trump administration pleasantries, pomp and circumstance at state visits or tut-tut’s about North Korean nukes and Chinese trade imbalances.

Keeping this massive body of water free and navigable will require an equally massive investment of U.S. military and allied firepower, combined with a firm defense commitment to each other and clear warning to China not to assume that it isn’t worth fighting over.

Already, some believe the president will have no choice but to take a harder line with China.

Middle East SITREP

Saudi Arabia warns Iran that it’s not going anywhere

Saudi Arabia is warning it won’t hesitate to take on Iran even as outside analysts are warning the region is descending into a “dangerous abyss.” The warning comes as the Saudis and other Arab regional powers ramp up their criticism of Iran and it’s Lebanon-based Shi’ite proxy Hezbollah. Saudi Arabia’s Foreign Minister Adel Jubeir’s rhetoric is some of the most explosive yet. “The kingdom will not stand by and will not hesitate to defend its security,” he has said. “Any leniency in dealing with their policies would only encourage them more, so we must stand together.” Added Arab League Secretary-General Ahmed Aboul Gheit: “Iranian threats have gone beyond all limits and pushed the region into a dangerous abyss.”

Meanwhile, Israel is tightening its relationship with Saudi Arabia to “confront Iran” as Tehran’s influence grows in strength and influence in the region, vowing to share Iran-related intelligence with the kingdom. In an unprecedented interview with Saudi-owned news website Elaph, senior Isreali commander Lieutenant General Gadi Eisenkot said Israel and Saudi Arabia could successfully counter Iran if both nations worked in tandem. “We are ready to exchange experiences with moderate Arab countries and exchange intelligence to confront Iran. There are many common interests between us and them,” Iran, of course, being the most important of them. The general also claimed that Israel has “on intention” of attacking Hezbollah in Lebanon, but also would not accept the militant group’s buildup becoming “a strategic threat.”

At the same time, the Israelis remain concerned about a security arrangement that is bringing Iran and its proxies closer to their border. Signed Nov. 8, the deal implements a de-escalation zone in the southwestern region of Syria that borders Jordan and Israel; it allows Iranian-backed forces to operate as near as 3.5 miles away from the Israeli-held Golan Heights. Tel Aviv had wanted that buffer zone to be at least 25 miles wide but didn’t get it. Tzachi Hanegbi, a confident of Prime Minister Benjamin Netanyahu and regional cooperation minister, said the current arrangement doesn’t meet Israel’s “unequivocal demands” that Iran and Tehran-backed forces be barred from the Golan. Said one senior analyst of the arrangement: “It’s laughable to think [Iran or Hezbollah] would willingly cede influence in the area. The deal basically relies on Russia to police Iran’s behavior.

But Russia is looking to shrink its military footprint in Syria, leaving some to question how serious the “policing” really would be.

Outlook: As we close out the year, this appears to be the most volatile of all PIR 2 hotspots. The Saudis and the Iranians have been competing for control over the Middle East for many years, so it was only natural that the day would come when the two biggest kids on the block, so to speak, would have it out. At this point it won’t take much to ignite what will be a very destructive conflict — one that reverberates around the world, considering that the Saudis and Iranians are two of the world’s biggest oil producers and oil powers the globe’s economic engine.

While it’s in everyone’s best interests that these two don’t have it out, it really appears inevitable, though we expect the two to continue to battle each other through proxies for the short term.

North Korea SITREP

China’s attitude on North Korea shifting

In recent months academics in China have been “permitted” to speak out publicly against North Korea, in what experts say is a shift in Beijing’s attitude towards its troublesome neighbor. Though China has long been North Korea’s principal backer and ally, as Pyongyang continues to roil the waters with ramped up ICBM and nuclear weapons testing, there has been stepped-up public criticism of the regime of Kim Jong-un and open speculation about what a post-North Korean era would look like.

“In China, the North Korean issue is a sensitive topic. However, as tensions rise on the Korean peninsula, the space for Chinese experts to express their opinion critical towards Pyongyang has gradually widened, suggesting a shift of thinking on North Korea within the Chinese government. A speech by the prominent historian Shen Zhihua at Dalian University in March this year drew much attention in Western media for criticizing the Chinese government policy toward North Korea and calling China’s long-standing ally a ‘latent enemy.’ Remarkably, the speech has not been censored and still can be accessed on the website of the East China Normal University.

“Similarly, a recent published interview with a prominent professor of the Peking University, Jia Qingguo, during the Seoul Defense Dialogue 2017 has sparked another wide debate beyond the Chinese academic community on how to deal with the North Korean issue.”

Specifically, Jia said it might now be time for Beijing to begin talking with concerned countries — think the U.S. primarily, but also South Korea — about how to coordinate military action in case current tensions with North Korea escalate into all-out war. He stressed the need for China to be prepared for that contingency by being prepared to prevent unnecessary conflicts with “involved parties due to miscalculations and misinformation.” And importantly, Jia argues that other issues must be addressed now, such as who would secure loose nuclear weapons and how to restore order on the Korean peninsula.

“This was not the first time that Jia Qingguo had brought up the idea of a contingency plan. He previously published an article on the Australian based website East Asia Forum, which caught many observers by surprise given that it is highly unusual for such a sensitive subject to be addressed so publicly by a Chinese scholar. The question of what happens if the regime of Kim Jong-un collapses and/or war breaks out on the Korean peninsula has long been a taboo topic for the Chinese government.”

Outlook: The significance of this development cannot be overstated. The prospect of China essentially throwing North Korea under the bus being openly discussed and debated in public should be a huge warning sign to Pyongyang that its sole benefactor is more interested in long-term economic geopolitical stability than putting up with the constant tensions.

It’s also a further sign that the Trump approach to dealing with North Korea — which is resolving to actually deal with North Korea — may be influencing Beijing’s thinking.

None of this is to suggest that China’s concerns about having a U.S.-allied nation on its borders, loose nuclear weapons and an exodus of North Koreans streaming across its border have been allayed. But its obvious Beijing is entertaining opposing views about the future of the Korean peninsula not previously entertained (or tolerated), and that can’t be making the North Korean leadership comfortable.

Kim could be one nuclear weapon or ICBM test away from being abandoned completely by Beijing.

Defense in Brief:

Air Force

The Air Force, which is short about 2,000 pilots already, is not having robust success in retaining fliers, despite offering fat retention bonuses. Service officials say they typically like to retain about 65 percent of eligible pilots using the bonuses, but in fiscal year 2015, that percentage fell to 55 percent. The so-called “take rate” has fallen even further since then, to 48 percent in fiscal 2016, and just 44 percent in fiscal 2017. Only 476 pilots agreed to accept retention bonuses last year, even though the amount of money being offered has climbed. In June, the AF for the first time started offering bonuses of $455,000 to fighter pilots who agreed to 13-year extensions ($35,000 annually). Before, a fighter pilot could only expect about $225,000, or $25,000 a year, for a nine-year extension. Only five of about 200 eligible fighter pilots accepted the $455,000 payout last year. Analyst comment: It takes a great deal of time and money to train a single pilot to fly today’s sophisticated fighter jets, so this is a big — and growing — problem for the air service. The bigger pilferer of military pilots continues to be the civilian airliner industry, which pays better and is, of course, much safer and more conducive to family life. No amount of money offered by the government will change those influences.


The Navy recently launched the USS South Dakota, said to be the most technologically advanced attack sub ever. A Block III Virginia-class sub, it was engineered with several never-before-seen undersea technological innovations. Navy officials say the sub has achieved “acoustic superiority” thanks to the new developments, which of course cannot be publicly disclosed. That said, the Navy said the South Dakota contains many engine quieting technologies that will make it more difficult to detect, along with a new large vertical array and additional “quieting” coating materials for the hull. “The impetus for the Navy’s ‘acoustic superiority,’ is specifically grounded in the emerging reality that the U.S. undersea margin of technological superiority is rapidly diminishing in light of Russian and Chinese advances.”

The U.S. 7th Fleet is near the breaking point, as evidenced by a series of high-profile, deadly collisions and other accidents that began earlier this year. The most recent sign: A routine personnel transport flight to the USS Ronald Reagan aircraft carrier crashed in the Philippine Sea, killing three. “A US Government Accountability Office report from September warned lengthy deployments of US ships based in Japan — as both the Fitzgerald and McCain had been at the time of their collisions — often result in key training requirements being neglected due to the demands of operational duties, something the report describes as a ‘problem.’ Without training time, ‘perishable skills atrophy,’ said Carl Schuster, a Hawaii Pacific University professor who spent 10 years ‘driving’ US warships.” (Analyst Comment: The one thing to keep in mind here is that the 7th Fleet is responsible for managing two of the United States’ most pressing security concerns: North Korea in the short term, and a rising China in the long term. Don’t think for a moment that these accidents are not going unnoticed, especially by the Chinese, but also by U.S. allies in the region who are wondering just how reliable America’s largest fleet really would be in an emergency. There is also the fact that this is a problem that isn’t going to be fixed overnight. It will take years to train the fleet up to standard and ensure its warships are being properly “driven” again before allies and adversaries alike begin to take its lethality seriously.)


The Department of Defense has awarded a research team $7.1 million to develop drone swarm technology to assist ground forces in urban environments, the most difficult and deadly of all modern battlefields. The goal of the program, according to DARPA’s website, is “to empower … troops with technology to control scores of unmanned air and ground vehicles at a time.” Researchers have a vision of swarms of multi-rotor aerial drones and ground rovers — 250 or so — that can be deployed to gather information and assist ground troops in “concrete canyon” surroundings where line-of-site, satellite-based comms is hampered by buildings. “I specifically will work on swarm interaction grammar – how we take things like flanking or establishing a perimeter and create a system of translations that will allow someone to use those tactics,” said Julie A. Adams, an Oregon State University computer science professor, part of the research team.

Chairman of the Joint Chiefs of Staff Marine Gen. Joseph Dunford told a group of students at Tufts University’s Fletcher School of Law and Diplomacy in Massachusetts, where he is an alumnus, that the U.S. military’s advantages against near-peer competitors like Russia and China is eroding, meaning that America must invest in new capabilities to ensure deterrence. Dunford noted that those two nations in particular, along with others, have long studied the American way of war and are developing capabilities to counter U.S. military advantages. “As an example, if you take the naval alliance in Europe, Russia understands that the transatlantic link is critical for us to meet our NATO commitments,” he said. The “anti-access, area denial” strategy looks to develop systems to limit U.S. ability to move into the region and then to operate freely within the region to meet alliance commitments, Dunford said. “So there’s two issues there,” he added. “One is actually our ability to meet our alliance commitments. The other is deterrence, which is closely linked to the assurance of our allies.” (Analyst comment: Russia cannot hope to match U.S. military spending anytime soon so the cheaper alternative is to develop A2AD capabilities that limit our ability to respond to an emergency. China is a different story; with a booming economy, Beijing can put more resources into new systems. But here too, the Chinese are more focused on asymmetrical capabilities like cyberwarfare and anti-satellite weapons rather than head-to-head systems.)

The Army National Guard’s first cyberwarfare unit stood up in Virginia. The 91st Cyber Brigade will provide training and readiness oversight for cyber units across 30 states, while deploying personnel to meet the rising demands of cyber-mission sets across all services. “Starting today and moving forward, the 91st Cyber Brigade will play a crucial role in our national defense,” Lt. Gen. Timothy Kadavy, director of the Army National Guard, said. “The Citizen-Soldiers of the Shadow Brigade represent a prime example of how highly skilled Army National Guard personnel bring state-of-the-art skills to their part-time service to carry out the Total Army effort. Virginia Gov. Terry McAuliffe noted that “there is no greater threat facing our nation today” than potential harm caused by cyber attacks.

PIR3: What are the new indicators of systems disruption to the economic or financial industry that could lead to instability? 

Stock market expansion since Trump election more limited than known

There’s no doubt that investors have benefitted since Trump was elected, as the stock market has risen to new record highs. But further analysis of those markets by French bank SocGen found that just 10 contributors of the S&P 500’s bull run have accounted for one-third of the index’s growth, meaning wealth accumulation is not as broad as it seems, but concentrated into fewer companies. What’s more: The bank has broadly hinted that it expects a 20 percent drop in the S&P next year, tumbling from its current index of 2,600 to around 2,000. “Not surprisingly, SocGen’s unspoken advice was to get out now,” one analyst said.

PIR4: What are the new indicators of systems disruption to the critical infrastructure that could lead to instability?

The Uber hack no one knew about

Ride-share company Uber just revealed this past week that its computer networks were hacked about a year ago. What’s more, the company knew about the hack but failed to notify the 57 million customers whose data was stolen. “None of this should have happened, and I will not make excuses for it,” said Dara Khosrowshahi, the company’s CEO since September. “We are changing the way we do business. Uber fired its chief security officer and a deputy for their actions in keeping the hack secret. The effort including actually paying the hackers $100,000.

New potent Chinese ICBM near completion

A new Chinese missile capable of traveling 7,500 miles and raining 10 independently targeted nuclear warheads on targets afar has cleared the testing phase and is ready to be deployed in a few months. The DF-41 is a three-stage missile that the People’s Liberation Army is set to deploy early in 2018, though a state-produced video claimed it wouldn’t be deployed unless China was provoked. The missile is said to have the longest range of any ICBM in the world. It can travel at a speed of Mach 10, or around 7,700 miles per hour. (Analyst Comment: Couple this development with the introduction of the J-20 stealth fighter and other ‘cutting edge’ weapons and it’s apparent that the military technology China stole from the United States in the 1990s is beginning to pay dividends, seriously eroding our once wide military advantages.)

California quakes — the ‘big one’ is coming

There were 134 earthquakes along the San Andreas fault line in California this past week, prompting experts and officials to warn residents to “prepare now” for the big one. Of the recent quake swarm, 17 were stronger than 2.5 magnitude, with six stronger than 3.0. More tremors are expected in the coming weeks. Fears of a pending massive quake were raised last week when a swarm of 10 “mini-quakes” struck the same region, including one 4.6 tremor that was felt in San Francisco 90 miles away. That one was followed by nine similar after-shocks. “Seismologist Lucy Jones from the US Geological Survey warned she is trying to make people accept the fact catastrophe is imminent and that they need to prepare themselves.” Analyst comment: We tend to think of these kinds of events as being local/regional, but understand that with the world’s 7th largest economy, massive damage to California will have economic reverberations throughout the country. Farming/agriculture, along with the tech industry, would be impacted most in a situation where quakes caused massive, widespread damage.

Jon E. Dougherty is a political, foreign policy and national security analyst and reporter with nearly 30 years of experience in both fields. A U.S. Army veteran of Operation Enduring Freedom, he holds BA in Political Science from Ashford University and an MA in National Security Studies/Intelligence Analysis from American Military University.

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