Strategic Intelligence Summary for 01 December 2017

Strategic Intelligence Summary for 01 December 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?


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

Economy is doing better but homelessness is rising, too

Even as the U.S. economy improves, unemployment falls and the stock market continues to rise, homelessness in some of America’s largest cities is rising as well — getting so bad in some of them that local officials have had to declare states of emergency. Part of the problem: Soaring housing costs, especially in the tech corridor of California-Washington State, where newfound wealth is sparking ridiculously high home prices. “I’ve got economically zero unemployment in my city, and I’ve got thousands of homeless people that actually are working and just can’t afford housing,” said Seattle City Councilman Mike O’Brien. “There’s nowhere for these folks to move to.” It’s not just Seattle; much of the West Coast is experiencing rising homeless and “abject poverty,” pushing some cities to spend millions and even billions searching for solutions. [source(Analyst Comment: It’s time to stop ignoring people who say the wealth gap in America is increasing…because it is. And as more Americans become economically disenfranchised, the risk of major social upheaval grows more likely.)

Will self-driving cars be programmed to make moral decisions for you?

As we get closer to functional technology in the self-driving car industry, many have begun to ask ethical questions about cars that are no longer under the control of humans: What decisions will the cars make when it comes to accidents that cannot be avoided? “Last month, Sebastian Thrun, who founded Google’s self-driving car initiative, told Bloomberg that the cars will be designed to avoid accidents, but that ‘If it happens where there is a situation where a car couldn’t escape, it’ll go for the smaller thing.’ But what if the smaller thing is a child? How that question gets answered may be important to the development and acceptance of self-driving cars.” Further: “In everyday driving, such no-win choices are may be exceedingly rare but, when they happen, what should a self-driving car — programmed in advance — do? Or in any situation — even a less dire one — where a moral snap judgment must be made?”

Govt. websites just keep getting worse

You would think as advanced as the Internet has become that even Uncle Sam’s computer systems would be decent. But they’re not. In fact, they keep getting worse. According to a tech-focused think tank assessment, roughly 91 percent of federal websites could not pass a load-time test and had poor overall speed, accessibility and security. “The Information Technology and Innovation Foundation analyzed almost 500 federal websites and benchmarked them against its analysis from last year, which looked at 300 sites. The sites showed a minimal improvement in mobile friendliness from last year but dipped in security and load-time assessments. More than 90 percent failed the assessment on at least one metric.” Recommendation: The Trump administration begin a “website modernization sprint” to address speed, accessibility and especially security shortfalls. [source]

Air Force finds more criminal reporting lapses after Texas church shooting

We were afraid of this. In the wake of the horrific Texas church shootings earlier this month by a former airman who was disciplined via court martial while serving and should not have been able to legally purchase the guns he used to commit his crimes, the Air Force was tasked with combing its databases to see if other criminal acts had gone unreported to federal authorities. Turns out there are dozens of instances. The revelation comes as families of victims in Texas are filing claims against the Air Force for its lapse. Former airman Devin Kelly killed 26 people at the First Baptist Church in Sutherland Springs with weapons he was supposed to have been banned from purchasing. But the Air Force neglected to report his conviction and jailing for domestic violence as required, so he never showed up on the FBI’s National Crime Information Center database. [source] (Analyst Comment:  If the Air Force has failed ‘dozens’ of times to report such crimes, it’s likely that the other four branches of service [including the Coast Guard] have failed to do so as well.)

Outbreak of fleshing-eating bacteria in Canada

Health officials in London, Ontario announced that nine people died from an outbreak of flesh-eating bacteria. Declared some 18 months ago, the outbreak has been steadily growing. The Middlesex-London Health Unit announced that there has been at least 132 cases of infection since April 1, 2016. Of those, 22 percent required treatment in an intensive care unit, while 15 percent had “necrotizing fasciitis,” also known as “flesh-eating” bacteria. Health officials said they are issuing the alert because people who have no connection to the outbreak are now becoming infected. [source]


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

South China Sea SITREP

The United States’ ace-in-the-hole in Asia: A rising Japan

— A recent analysis provided some insight into a development in Asia that is thus far occurring largely under the radar: namely, that Japan is slowly but surely shedding its post-World War II pacifism in favor of a more muscular foreign policy and military stance. In late October Prime Minister Shinzo Abe, a huge Trump ally and someone who shares our president’s nationalist fervor, won a crushing election victory. This sets Japan up for some major military advances in the coming years — advances that could also include Japan becoming a nuclear power if rival China threatens nuclear attack. The result may be that there is no war in the future — near or long-term — involving China, the U.S. and its Asian allies.

A key passage: “Japan will now start deliberately rearming and aiding her neighbors, with the pace determined by China’s aggressiveness. If China does not abandon her current expansionist territorial policy, but rather attempts nuclear blackmail against her neighbors, at the end of the day, Japan will match that too, with her own nuclear force, checkmating China. This will bring an armed peace.”

The analysis goes on to note that since 1995, Chinese assertiveness in the South China Sea began with its occupation or the Philippine-claimed Mischief Reef. Beijing’s territorial claims have only expanded since, as China also became more aggressive as it met little resistance. This provided China with the belief that it, and not another powerful rival, was fast becoming Asia’s leading power. China is also building bases in Africa, so it can control international maritime chokepoints. “A continuation of such aggressive behavior will almost certainly lead to conflict, escalation, and perhaps general war.”

“As the Japanese ambassador remarked to this author, ‘We are a shadow nuclear power.’ In other words, it might take them a week to create an arsenal.” Chinese aggression has led to the formation of “The Quad” — an informal alliance of four nations including the U.S., India, Japan and Australia. Beijing’s aggression is also making it more likely that Japan continues to develop its own defense industry that turns out highly capable weapon systems (that Taiwan badly needs and would get from Japan’s Abe). And the aggression has alienated all of China’s neighbors. [source]

Japan is already expanding its military development, having begun a project with Great Britain to field the world’s best air-to-air missile, with testing to begin next year. [source] Also, the Japanese navy already fields some of the most advanced, hard-to-detect submarines, the Sōryū.

Outlook: As Japan is increasingly threatened — by North Korea and China — it will respond to the level of threat, in terms of military preparedness and doctrine. And while its self-defense force is currently small, it is nevertheless potent, and can grow, both in size and offensive capability, very quickly. And that will definitely be to the United States’ advantage.

 

NATO-Russia SITREP

NATO remains Russia’s primary focus

As the Syrian civil war winds down and ISIS is on the run, the Russian general staff is beginning to assess the performance of weapon systems and troops who were sent to intervene on behalf of the Syrian government. In addition to training its forces, the Russian military high command also wanted to test advanced systems and even approaches to modern warfare. According to the Eurasia Daily Monitor from the Jamestown Foundation, “it appears that one lasting effect of this process will be the emphasis upon high-technology weapons and equipment in the next GPV, now slated for presidential approval next month.” [Here is the source, in Russian]

But clearly, Russia — while expanding its influence in the Middle East — is still focused on its NATO rival. And in that, Russia is doing its best to chip away at the alliance, beginning with Turkey. The Turks have recently signed a $2 billion arms deal with Russia that includes the purchase of sophisticated S-400 surface-to-air missiles that the Turks cannot integrate into NATO systems. The dilemma for Vladimir Putin is this, however: By the gamble, he may succeed in driving a wedge though the NATO alliance with Turkey (which is a member) but he also risks handing the alliance Russian technology. The rift, however, is real: Petr Pavel, chair of NATO’s military committee, has warned of unspecified “consequences” should Turkey go ahead with the purchase of Russian systems. [source]

Further, there is enough concern in the Baltics about a possible Russian invasion at some point in the future that local militias that have existed for decades are seeing dramatic increases in membership. “While these groups have existed for decades, their ranks have swelled in recent years in response to Russian aggression. These groups insist they are apolitical. They seek to defend their borders and train the warriors of tomorrow to prepare for whatever Putin has planned next.” [source]

There is also concern that Russia could have designs on non-NATO members Finland and Sweden. A senior alliance official said this week that NATO should come to the defense of both countries “at an event that underscored growing concerns about Russia’s military buildup.” “Commodore Hans Helseth, special adviser to the NATO Joint Warfare Center in Norway, said the two nations’ growing ties to the western alliance increased their risk and NATO had a moral obligation to come to their assistance if they were attacked.” [source]

Outlook: The experience in boots on the ground and testing of advanced systems will be employed in Russia’s NATO strategy as well. The one thing Russia’s military lacked when compared to the U.S. and NATO militaries is real-life combat experience, which NATO forces have been getting in Iraq and Afghanistan for more than a decade.

While experience is good, so too is combat capability and it appears as though the Russian general staff is no longer of the Soviet mindset — simple systems and a lot of them. Now they are looking to match NATO and U.S. technological quality, which will make the already dangerous Russian military more formidable. NATO remains Russia’s biggest challenge and interest, and vice versa, though we don’t see the two moving any closer to war than we did last week.

 

Middle East SITREP

The proxy war between the Iranians and Saudis is hot

A Jewish media report claimed this week that Iran was responsible for designing and building missiles fired from Yemen by Iran-backed Houthi rebels at the Kingdom of Saudi Arabia. The determination was made in a confidential report by UN sanctions monitors, who apparently examined the remnants of four ballistic missiles fired at the KSA from neighboring Yemen.

The finding comes on the heels of accusations leveled against Iran by U.S. Ambassador to the UN Nikki Haley, when she called for the United National to hold Iran accountable for violations of two UN Security Council resolutions.

The confidential report noted that monitors visited a pair of Saudi military bases to examine remnants gathered by Riyadh’s military and intelligence apparatus following missile attacks on the kingdom on May 19, July 22, July 26, and Nov. 4. The monitors also visited four “impact points” from the Nov. 4 attack.

“Design characteristics and dimensions of the components inspected by the panel are consistent with those reported for the Iranian designed and manufactured Qiam-1 missile,” the monitors wrote. This particular missile has a range of nearly 500 miles and carries a 1,400-pound conventional warhead.

The UN monitors said in their report that the missiles were delivered to Yemen in pieces, then assembled there by missile engineers in that country. Iran, of course, has denied involvement. [source]

Outlook: There is a full-scale “hot” war underway via Iranian and Saudi proxies, though the Kingdom’s military is actually doing most of the fighting while Iran battles through the use of groups like the Houthis. While the proxy war in Yemen is important, the more pressing threat to Saudi Arabia — and Israel — comes from Iranian proxies and Iranian military forces taking up positions in what remains of Syria.

As we’ve stated in some of the more recent Strategic Intelligence reports, this conflict region remains the most volatile of the four that we track. At any time war could break out between Iranian proxy Hezbollah and Israel, or between the Saudis and Iranians, who are battling for hegemony in the Middle East.

 

North Korea SITREP

Day of reckoning for U.S. regarding North Korea has arrived

This PIR indicator moved the most on our ‘next war’ meter this week after Pyongyang test-fired another ICBM — this one traveling the longest of any previous missile (50 minutes). The launch occurred after a two-month missile test hiatus in which some parties, including the Russians, claimed that the time for diplomacy had finally arrived.

Just how far is this newest missile capable of traveling? In the words of SECDEF James Mattis, the North Koreans are now capable of striking “everywhere in the world, basically. Couple this with a recent Defense Intelligence Agency assessment that the North Koreans will likely be capable of fielding a functional, nuclear-tipped ICBM that puts America in range by next year (see PIR 4, below), and we have a situation on the Korean peninsula that became infinitely worse over the course of a few hours this week. [source]

The most dire warning regarding potential conflict with North Korea came from Sen. Lindsey Graham this week. During a televised appearance, he said that Trump was “ready, if necessary, to destroy” the North Korean regime in order to protect the U.S. “Even if it means thousands, hundreds of thousands of people over there get hurt to protect America. Now that’s the choice that the president has to make. I stand with him. The best outcome is not to have a war. I don’t want a war, he doesn’t want a war, but we’re not going to let this crazy man in North Korea have the capability to hit the homeland. We’re not going to live this way,” Graham added. “To our friends in China, we’re not going to live this way. You need to help us, and if you don’t help us, we’ll take care of it. And us taking care of it means that the war is in your backyard, not ours.” [source]

Outlook: We have to keep in mind that during his campaign, President Trump said he would never allow North Korea to develop a nuclear capability that Kim Jong-un could use to threaten Americans. They now appear to be on the cusp of doing just that, meaning Trump and his national security team have a decision to make.

 

Defense in Brief: What are the new developments and indicators of war in the U.S. military-industrial complex?

Air Force

It’s happening: Lockheed says lasers will be on U.S fighters by 2021

Lockheed Martin is telling the Air Force it will definitely be able to install lasers aboard U.S. fighter planes by 2021. The Air Force Research Lab has awarded the defense contractor $26.3 million to design, develop, and produce a prototype High Energy Laser Demonstrator” (SHiELD) to install aboard fighter jets early in the 2020s. The contractor has already successfully doubled the output power of its ATHENA high energy laser to 60 kw for the Army, but that service only requires a system to fit on a truck. “To get a laser system into a smaller, airborne test platform” will be challenging, Lockheed said in a statement. The contractor has already committed to building a 5,000-pound 200 kw laser system to mount aboard an AC-130 gunship. The defensive SHiELD system will likely take advantage of the F-35’s powerful engines, which can produce 20 megawatts. [source]

New anti-radiation missile in the works

Defense contractor Orbital ATK Inc., has been given a modified contract for engineering studies and service support to develop Advanced Anti-Radiation Guided Missiles, or AARGM, an upgrade to the AGM-88 HARM systems. The deal, announced recently, is worth nearly $40 million. Officials familiar with the award said Orbital can now procure “engineering studies, logistics and test planning activities to support the development of design adaptations” for the AGM-88 HARM. The contract is in support of small business innovation research Phase III work titled “Secondary Sensor for Anti-Radiation Missiles.” “The AARGM is a supersonic, air-launched tactical missile system that upgrades legacy AGM-88 HARM system. It can engage traditional and non-traditional advanced land- and sea-based air-defense threats and time-sensitive targets.” The weapon will be fitted for use on the F/A-18C/D Hornet, F/A-18E/F Super Hornet, and the EA18G Growler. [source]

Navy

Run silent, run deadly with new Mk-48 torpedoes

The service has begun engineering a new, longer-range, more lethal, sub-launched Mk-48 torpedo that will be better able to destroy ships, enemy submarines and incoming weapons, according to service officials. As other adversarial navies approach peer competitor status with the U.S. Navy, the service is looking at longer-range weapons that can kill at greater distances, while remaining out of reach of enemy weapons systems. Progress with the new Mk-48 is taking place alongside concurrent upgrades to the Navy’s current arsenal and a full restart of the Mk-48 production line, which has been shut down for years. An current version, the Mk-48 Mod 6, has been in service since 1997, and the Mod 7 has been in service since 2006. At present, Lockheed Martin, which is working on reengineering the Mk-48, is delivering 20 upgrade kits to existing torpedos per month to the Navy. [source]

Smaller, more lethal warships wanted

The Navy’s fast, maneuverable littoral combat ships, while fast, have been criticized for being too light on firepower and armor, making it vulnerable to easier destruction in a real battle. So the sea service wants to address those issues with a new class of small, but powerful, frigates designed to shoot down planes, attack enemy ships and find submarines. “The Navy had decided that speed is less important than having a warship with sufficient weapons to defend itself,” Loren Thompson, a defense analyst with the Lexington Institute, said. The Navy is looking to build 20 new frigates and is actively seeking an affordable design. On an accelerated timeline, the Navy wants potential shipbuilders to go off of existing designs, with the goal of procuring the first two ships in 2020 and 2021. [source]

Army

Freeze-dried plasma comes to the battlefield

U.S. Special Operations troops will be getting a new addition to their field medical kits: Freeze-dried plasma, which should go a long ways toward preventing at least some wounded troops from dying on the battlefield. In November all U.S. Marine Corps special ops units began carrying the plasma, which helps blood clot faster. In fact, the plasma has already saved lives. Army Cpl. Josh Harris lost parts of both legs in 2013 when he stepped on a landmine during a midnight raid in Afghanistan. The medic in his unit used the plasma to keep him alive for more than 90 minutes until he could be medevac’ed. [source]

Marine Corps

Arty Marines returning from Syria

More than 400 Marines are returning to the U.S. after providing artillery support for coalition forces battling to retake the Islamic State capital of Raqqa. Marines and sailors with 1st Battalion, 10th Marines, deployed in September to relieve another Marine artillery unit that was supporting Syrian fighters in their battle to retake Raqqa, from June 6-Oct. 20. At one point the fighting was so intense that Marines burned out the barrels of two M777 155mm howitzers. In the end, Syrian Democratic Forces, with Marine and U.S. Army support, defeated more than 2,500 ISIS fighters. The returning Marine unit will not be replaced. [source]


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

Stock market crash at 70 percent likelihood?

We know how these predictions of financial doom and gloom can go, and this one seems especially questionable given the massive gains in the market this week alone, thanks to news that Congress is closer to passing President Trump’s tax reform initiative. That said, we would be remiss not to include the latest dire warning, which is this: Vanguard’s chief economist Joe Davis said investors should prepare for a significant market downturn, which is now at a 70 percent chance of crashing. That chance is significantly higher than it has been over the past 60 years. “It’s about having reasonable expectations,” Davis said of the research, which attempts to provide investors with a view of what can occur in the markets in the next five years. “Having a 10 percent negative return in the U.S. market in a calendar year [within a five-year forward period] has happened 40 percent of the time since 1960. That goes with the territory of being a stock investor. …It’s unreasonable to expect rates of returns, which exceeded our own bullish forecast from 2010, to continue.” He added: The risk premium, whether corporate bond spreads or the shape of yield curve, or earnings yields for stocks, have continued to compress. We’re starting to see, for first time … some measures of expected risk premiums compressed below areas where we think it can be associated with fair value.” [source] (Analyst Comment: Market corrections are nothing new, of course, but that said, it’s not likely a great many investors were listening when people warned of the Great Recession crash in 2008-09. If you’re a believer in the adage, ‘What comes up, must come down,’ then this warning is for you.)

Household debt in U.S. now surpasses Great Recession level

Well, it took nearly a decade but it happened: U.S. household debt has now surpassed the record levels seen during the Great recession of 2008. According to the New York Fed’s latest quarterly report, household debt reached $12.73 trillion during the first quarter of 2017, up from a peak of $12.68 trillion reached nine years ago. That’s $50 billion above the previous high — and keep in mind that the holiday shopping season is now upon us. The good news: Household debt remained below levels in the past as they pertain to the size of the overall U.S. economy. Americans reduced their overall debt by 12 percent immediately following the 2008-09 financial crisis, but obviously, the debt levels are trending back up. What’s eating up the cushion? Far more student loan and automobile debt. [source]


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

 

U.S. authorities mindful of new terrorist threats to rail service

Mass-transit authorities in Philadelphia are deploying drones to monitor rail lines amid new calls from terrorist groups to target U.S. rail infrastructure. Philly’s mass-transit police chief said he has been aware for some time that some 140,000 miles of rail lines crisscrossing the country are “porous” and that he began thinking about using drones to monitor them awhile back. Thomas Nestel, police chief for the Southeastern Pennsylvania Transit Authority, said he initiated a drone monitoring program following publication of the latest issue of al Qaeda’s English-language magazine, providing readers a step-by-step guideline for making a “homemade derail tool” while claiming that the United States’ rail lines are the “easiest targets.” The article also prompted the Dept. of Homeland Security to send security notices to all law enforcement agencies around the country. [source] (Analyst Comment: While trucks move the bulk of goods around the U.S., rail transport moves everything from oil and gas to dangerous chemicals. One derailment that caused release of a highly toxic substance in a suburban or urban setting could kill tens of thousands. Expect more jurisdictions to deploy surveillance drones because it’s efficient, safer and cheaper than hiring extra security personnel.)

North Korea will have a functional nuclear capability in 2018: DIA

The Defense Intelligence Agency released an assessment over the summer that represented a major threat to U.S. national security moving forward: The North Koreans will have managed to develop a functional nuclear capability it can then use to threaten the U.S. and its allies by next year. That’s two years faster than the previous U.S. intelligence community estimate, meaning that either the previous estimate was overly optimistic or the North Koreans’ ICBM and nuclear weapons development has been sped up (it’s probably the latter). [source]

This is relevant because the South Koreans this week made the same assessment. “North Korea has been developing its nuclear weapons at a faster-than-expected pace. We cannot rule out the possibility that North Korea could announce its completion of a clear force within one year,” said Cho Myoung-gyon, Unification Minister. What’s also significant about next year is that it marks the 70th anniversary of the founding of the country, an important milestone. Cho added that the North appears to have been conducting fuel and missile engine tests during the previous two-month lull in actual missile testing. [source] (Analyst comment: We’re going to be watching this region more closely in the coming weeks to see if we detect any movement of military assets there — by the U.S., of course, but also Chinese, Russian and South Korean forces as well, since all of those countries share a border with North Korea. We expect Trump to keep his word and deny the North this capability.) 

Shortages of IV saline are dangerously low

Bags of 0.9 percent saline for intravenous infusion are running so low across the country that some are predicting that “people are going to die” because of it. Saline, which is used primarily as a volume expander in trauma and in conjunction with blood infusions, is one of the most vital of all IV solutions. The FDA says that the supply has been below normal since 2014 but the shortage continues to worsen. Some hospitals are reporting just two days’ worth, while adding that they are phoning saline manufacturers all over the world to get more without success. What’s more, the shortage got worse after Hurricane Maria slammed into Puerto Rico. [source] (Analyst Comment: This is huge. As a former paramedic, I can tell you that saline shortages have occurred in the past but nothing on this scale. Saline passed lactated ringers decades ago as the volume expander of choice because it has far fewer negative physiological affects on acid-base balance. Imagine a massive catastrophe on a wartime scale and the richest nation on earth is short of life-saving saline. The post-disaster fallout would be equally massive, with lawsuits galore that could bankrupt entire companies and wipe out hospitals.)

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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