Strategic Intelligence Summary For 27 September 2018

Strategic Intelligence contains intelligence reporting on the state of global security and instability, geostrategic issues affecting the United States, pre-war indicators, and assessments on the current risk of war. This report is available each week for Intelligence subscribers.


In this Strategic Intelligence Summary… (5,017 words)

  • Gaza balloons spark seven fires in one day 
  • Most future wars to be fought by gangs, cartels 
  • Key Hezbollah financier arrested in Brazil after years on the run
  • NatSec Influencers: Trump risks war with Iran
  • Marines getting new Pacific uniforms
  • Marine Lt Col: Changes must be made to stay competitive in the Pacific
  • USAF to join large scale aviation exercise in Ukraine
  • Army’s combat arms improving known issues
  • LTG: Expect mobilization/transit to be contested in future conflicts
  • Army converting more units
  • Despite growth plans, Army misses end strength goal
  • Army mulls $31.6 billion shift in armor, copters in war plan
  • Australia looking to acquire U.S. nuclear submarine
  • Navy’s carrier deployments at 25 year low
  • UK to build 2,000-strong cyber force
  • Iranian leaders try to spark more anti-American backlash
  • Russians’ ethnic problems in Estonia
  • US must ‘make room’ for China’s military power
  • Trump administration’s secret anti-China plans
  • U.S. approves military sales to Taiwan
  • Taiwan can win a war with China
  • China: We’re trying to save the world from the U.S.
  • Saudi Arabia at its least stable in 50 years  
  • DPRK uses cryptocurrency too skirt sanctions 
  • And more…

  

Priority Intelligence Requirements:

PIR1: What are the new indicators of disruptive events that could cause global or regional instability?

PIR2: What are the latest military and security developments exhibited by the U.S. and their peer and near-peer adversaries?

PIR3: What is the current situation report and risk of war in each of the four flashpoints? (NATO-Russia, Indo-Pacific, Middle East, North Korea)


PIR1: What are the new indicators of disruptive events that could cause global or regional instability?

Gaza balloons spark seven fires in one day 

In response to more than a dozen fires this weekend in southern Israel that were sparked by incendiary balloons launched from the Gaza Strip, Israeli Defense Force (IDF) aircraft fired at Gazans in the northern part of the Strip as they launched the devices. Seven of the fires were started on Sunday and were extinguished by Sunday evening. These were the first such attacks following several weeks of quiet.
Israel says the surge in Gaza violence has come as Hamas has encouraged protests in order to provide cover for terror attacks. These attacks have included firing at IDF troops and attempts to breach the border fence. [source]

 

Most future wars to be fought by gangs, cartels 

According to two security analysts, Mexico provides an example of what most future wars may look like. At least 200,000 people have been killed in Mexico since 2006 when the country intensified its war on drugs, and most deaths came as the result of competition between the Mexican military, police, cartels, and criminal factions. The situation in Brazil and a number of other Central and South American countries is similar. In fact, similar civil conflicts are being waged around the world. Although criminal and terrorist elements may not necessarily aim to displace recognized governments, in many cases these groups are the de facto rulers of large swathes of territory, leading to the displacement of millions of refugees. Although the violence generated by crime wars can be indistinguishable from that generated by conventional war, current international law does not allow for criminal organizations to be considered enemy combatants and subject to war crimes prosecutions. [source]
Key Hezbollah financier arrested in Brazil after years on the run
Last Friday, the Brazilian Federal Police announced the arrest of Assad Ahmad Barakat, a Lebanese national described by the U.S. government as “one of the most prominent and influential members of the [Hezbollah] terrorist organization”. Barakat, who operated as Hezbollah’s head of paramilitary and fundraising activities in South American in the mid-1990’s, had previously been arrested in Brazil in 2001 and extradited to Paraguay, where he was tried and sentenced to six years in prison for money laundering. He resumed his role as a Hezbollah fundraiser upon his release in 2008. This time, Barakat was wanted in Paraguay for identity theft and in Argentina for laundering more than $10 million in casinos there. It is not known if he will face charges in Brazil or if he will be extradited to Paraguay or Argentina. [source] (Analyst Comment: Iranian Hezbollah has long had a presence in South America, where they’ve been building networks, exploiting weaker governments, using criminal enterprises to raise terror funds, and capitalizing on a perceived lack of U.S. attention to the continent. Last month, Defense Secretary James Mattis was in South America where he committed to an increasing U.S. presence to compete with Russian and Chinese influence. That’s could very well also mean greater U.S. support to rooting out Hezbollah.)
NatSec Influencers: Trump risks war with Iran 
According to a statement by the group National Coalition To Prevent An Iranian Nuclear Weapon, the Trump administration’s tough stance against Iran “has left Iran the option of either capitulation or war.” The letter, authored by more than 50 prominent foreign policy figures and signed by former Secretary of State Madeleine Albright, former Director of National Intelligence James Clapper, and former Senators Richard Lugar (R-Ind.) and Carl Levin (D-Mich.), said that a lack of diplomatic engagement following the pull out from the Iran nuclear deal has complicated the administration’s goals with regard to Iran. “The Administration’s suggested policy of regime change in Iran reflects wishful thinking and a flawed interpretation of intelligence about Iran’s vulnerability,” they wrote. “The 2003 U.S. invasion of Iraq remains a striking reminder of our inability to estimate accurately the long-term impact of U.S. actions.” [source]

PIR2: What are the latest military and security pre-war indicators exhibited by the U.S. and their peer and near-peer adversaries?

Marines getting new Pacific uniforms 

As the U.S. Marine Corps increases its footprint in the Pacific in preparation for potential conflict with China, the Corps is getting a new tropical uniform. Highly praised by Marines for their fast drying and light weight, the new uniforms are scheduled for an initial delivery of 2,600 by late June 2019. [source] (Analyst Comment: Military uniforms typically change to reflect the operating environment. This isn’t necessarily an early warning indicator of war with China because deployments to the dry, arid climates of the Middle East have slowed down, while deployments to Asia and Central and South America are likely set to increase. Still, the jungle climes of southeast Asia are in China’s back yard, and Marine Corps leadership no doubt want their Marines to operate at the highest levels. Marines say these uniforms will help them do that.)
Marine Lt Col: Changes must be made for the U.S. to stay competitive in the Pacific
According to retired Marine Lt. Col. Dakota Wood, now an analyst with The Heritage Foundation, in order for the Navy and Marine Corps to be successful in the new environment in the Pacific with a resurging Chinese threat, there will need to be “experimentation and trying new things. That’s the critical shortfall for the Navy and the Marine Corps.” During a short interview with Defense News, Lt. Col. Wood said the top modernization priorities in the Pacific relate to improving air, ground, and unmanned capabilities, but the more interesting question is what the future Marine Corps will look like, something Wood says hasn’t been figured out just yet. Wood went on to say that a Marine landing force in the Pacific must present the enemy with a credible, multi-faceted problem in order to “give the Navy the chance to get inside the envelope, close and have an impact.” Wood summarized the problem by implying that there are currently more questions than answers with regard to Navy and Marine Corps modernization, saying, “There is a gap between current modernization efforts and what needs to be there.” [source]
USAF to join large scale aviation exercise in Ukraine
 
Approximately 450 U.S. Air Force personnel will join participants from Belgium, Denmark, Estonia, the Netherlands, Poland, Romania, and the United Kingdom in exercise Clear Sky in Ukraine from 8-19 October. A total of 950 personnel are expected to take part in the exercise. Ukraine has expressed interest in joining the NATO alliance, and cooperation has expanded rapidly since Russia’s 2014 annexation of Ukraine’s Crimean Peninsula. Training will focus on air sovereignty, air interdiction, air-to-ground integration, air mobility operations, aeromedical evacuation, cyberdefense and personnel recovery. [source] (Analyst Comment: Ukraine is one of those ‘red lines’ for Russian President Vladimir Putin. Putin views NATO expansion as a national security threat, so creating buffer space is one significant reason why he’s trying to expand Russia’s de facto borders. Ukraine’s close and growing military relations with NATO is a clear sign to Putin that threats exist on Russia’s borders. NATO’s take is that they’re protecting a sovereign nation from Russian aggression, and that’s why both sides continue to develop military capabilities in the region.)
Army’s combat arms improving known issues 
During the recent annual Army combat arms conference, which was closed to the press this year, General Stephen Townsend, commander of Training and Doctrine Command, described five near-term priorities that will drive how prepared today’s soldiers will be for the next operating environment:
1.     A review of how the Army recruits its soldiers and a plan to improve.
2.     Improving the leader-to-led ratio and resourcing in initial entry training.
3.     Successfully standing up Army Futures Command.
4.     Fielding a new Combat Fitness Test and changing the force’s fitness culture.
5.     Ramping up Multi-Domain Operations into doctrine and practice.
Some early work has been done on each of these priorities, and more is on its way.
Examples of some of this early work includes:
1.     The Army’s Center for Initial Military Training has begun a study to improve recruit quality, both in discipline and physical fitness.
2.     Drill sergeants are being brought back into Advance Individual Training (AIT) to replace AIT platoon sergeants.
3.     Austin, Texas was recently announced as the new headquarters for the Army Futures Command, which will pair technical advances with Army initiatives.
4.     The Army will begin a year-long field test of the new fitness test in October.
5.     A Multi-Domain Task Force recently completed its first-ever field exercise this past summer. [source] (Analyst Comment: Several years ago, the Army removed drill sergeants from AIT, the second phase of initial training where soldiers earn their military occupational specialty, because then-leaders said having platoon sergeants would better reflect a transition out of basic training and into routine Army life. But drill sergeants tend to enforce strict discipline at high cost, which is more beneficial for new soldiers. Because the Army sees a pressing need to increase troop quality, drill sergeants are being brought back.)
LTG: Expect mobilization/transit to be contested in future conflicts 
“Our mobilization to and from a fight is unopposed right now.  No one opposes airmen driving to [Baltimore-Washington International Airport]. No one is in the computer systems tracking their luggage. No one is in [Air Mobility Command’s] computer systems that keep the equipment flowing forward,” said Lt. Gen. Mark Kelly, commander of the 12th Air Force, at the 2018 Air, Space and Cyber Conference in Washington, D.C.  Kelly went on to say that these and all other mobilization and transit logistics would likely be challenged in any future conflicts with near-peer adversaries like Russia or China. One example of a countermeasure to such challenges can be found in the Air Force’s Deployable Air Base System (DABS), which was tested in Poland this summer. This system provides “enhanced pre-positioning of U.S. equipment, increases responsiveness and readiness by pre-positioning ammunition, fuel and equipment, and improves infrastructure to enhance our ability to provide a rapid response,” according to General Tod Wolters, U.S. Air Forces Europe and U.S. Air Forces Africa commander. [source] (Analyst Comment: The military has been pre-positioning stocks in Europe in the event of hostilities with Russia or Russian-backed separatist groups, and leaders have expressed concern that a large scale sea transit of troops and equipment from the East Coast to Europe would be highly vulnerable to Russian submarines. This is a threat the military hasn’t contended with since World War II, and it’s made infinitely more complex when we consider the cyber and electronic weapons fielded by Russia and China. Two years ago, each of the chiefs of the four service branches told Congress that the next war they fight will bear a greater cost in terms of life. They were very blunt in their assessment that a great power conflict would inflict casualties not seen since Vietnam, Korea, or World War II. Pre-positioned stocks and permanent heel-to-toe deployments, such as we’re seeing with heavy armored brigades in the European Deterrence Initiative, can only go so far to increase military readiness in those theaters. Ultimately, military planners are faced with significant threats to mobilization and troop transit in the event that a conflict does occur.)

Army converting more units 

The Army continues shifting its focus to near-peer adversaries which have large formations of mechanized ground combat units. As part of that focus shift, the Army has announced that it will convert one Stryker brigade combat team into an armored brigade combat team in 2019 and an infantry brigade combat team to a Stryker brigade combat team in 2020. Equipment and infrastructure refurbishing and refitting will take an estimated 18 to 24 months. That will put the regular Army at a total of 31 brigade combat teams, comprised of 11 armored, 13 infantry, and seven Stryker brigades once complete. [source] (Analyst Comment: Last year, the Army announced it would convert an infantry brigade combat team to a heavy armored brigade. That was big news to us then because it showed the Army was indeed preparing for great power conflict. Armored brigades aren’t used for anything other than conventional warfare, like what we’d expect to see in Europe. Because the Army continues its transition of units towards tank warfare, we can only believe that Army leaders are actively preparing for the potential for war with Russia.)
Despite growth plans, Army to miss end strength goal
In spite of high retention rates, the Army will miss its fiscal year 2018 end strength goal of 483,500.  Instead, the end strength will remain at last year’s level of 476,000. The longer-term goal is for a 500,000-soldier active duty force. This end strength shortfall comes as a result of missing recruiting goals, particularly in military occupational specialties that are already under-strength, like field artillery, air defense artillery, intelligence and satellite communications. The Army will continue to offer up to $40,000 in bonuses, two-year enlistments and student loan repayment in hopes of improving recruiting in the coming fiscal year. Additionally, there are efforts underway to increase advertising in social media and to move or upgrade recruiting stations to make them more attractive. Training and Doctrine Command is also in the process of reviewing accessions efforts in hopes of making improvements. [source]
Army mulls $31.6 billion shift in armor, copters in war plan
In order to align its arsenal with the new National Defense Strategy, the Army intends to shift spending from some existing programs to a next-generation combat vehicle; future vertical lift, long-range artillery, and strike capabilities; a stronger communications network; and air and missile defense. Programs that would likely see cuts would include the Bradley Fighting Vehicle program, Chinook helicopter overhauls, the Army Tactical Missile System, the Armored Multi-Purpose Vehicle project, the Joint Light Tactical Vehicle program, and the UH-60 Blackhawk helicopter program. Defense spending caps for fiscal years 2020 and 2021, implemented by the 2011 Budget Control Act, could jeopardize plans to fulfill the National Defense Strategy if Congress and the White House are unable to agree on a plan to increase the caps.
Navy’s carrier deployments at 25 year low
According to USNI News analysis, the Navy has seen the lowest number of carrier strike groups underway since 1992 over the last 15 months. According to service leaders, the Navy’s reduced global presence has come as a result of 17 years of supporting ground forces during the global war on terrorism. These operations, in addition to budget cuts forced by sequestration, have caused delays in maintenance and modernization efforts. The Navy is now playing catch-up in these areas while retooling its forces for the new focus on near-peer competition with China and Russia, which have both been modernizing their forces during this period.
“When we kept two carriers in the Persian Gulf for a period of time, we kept telling the senior leadership that this was going to have a downstream effect, and it would really put a crimp maintenance-wise, and there would be gaps both in the Pacific as well as the Middle East. That is coming home to roost,” said former Deputy Secretary of Defense Bob Work. Furthermore, Chief of Naval Operations Adm. John Richardson told reporters in May that the Navy was starting to use a new deployment scheme called “dynamic force employment”, which deemphasizes constant carrier deployments in favor of less predictable deployments. This strategy is based on Secretary of Defense Mattis’ new National Defense Strategy mandate of operational unpredictability. [source]
Australia looking to acquire U.S. nuclear submarines 
Australia is considering the possibility of purchasing Virginia class nuclear submarines from the U.S. rather than continuing with its plans to build its own Shortfin Barracuda conventional submarines. The nuclear option could allow Australia to purchase fewer submarines than it would need to build due to the added capabilities of the nuclear submarines. [source] (Analyst Comment: Australia is a key player in Global NATO’s strategy to contain China. ‘Global NATO’ is the catch-all term used to describe U.S. and Western allies outside of NATO, to include Japan, South Korea, Australia, India, and others. Australia has already been targeted by Chinese political influence amid domestic and international warnings that China is becoming an increasing threat.)
UK to build 2,000-strong cyber force
According to Sky News, Britain is increasing its cyber warfare capabilities nearly four-fold with the creation of a new offensive cyber force of up to 2,000 personnel. The unit will be composed of military and contractor personnel under the aegis of the Government Communications Headquarters (GCHQ), the British equivalent to the U.S. National Security Agency. The move comes amid a growing cyber threat from Russia. [source] (Analyst Comment: Welcome to the 21st century arms race. Information and cyber warfare are being employed to great effect against the West, as Western nations struggle to understand and counter these threats. The United States, Great Britain, and NATO headquarters have all expressed a dire need to increase awareness of the cyber domain. Last week, the White House announced it would ease restrictions on the use of offensive cyber weapons in retaliation for foreign cyber attacks and exploitation. If the “defense forward” cyber strategy shows signs of success, then it could be adopted by other Western nations. We’re likely looking at the same type of strategy in use during the Cold War. How do you know when your nuclear weapon stockpile is large enough? When you have more nukes than your adversary.)

PIR3: What is the current situation report and risk of war in each of the four? (NATO-Russia, Indo-Pacific, Middle East, North Korea)

NATO-Russia

Significant Developments:

Russians’ ethnic problems in Estonia 

In a case that reflects on the efforts to integrate ethnic Russians in Estonian society, Major Deniss Metsavas and his father Piotr Volin were arrested on 03 September for allegedly working in tandem to provide information to Russia’s Main Intelligence Directorate (GRU). Both men are ethnic Russians. Only Metsavas had current access to classified information as he worked in the General Staff of the Estonian Armed Forces, where he had worked for the past five years. According to one report, the GRU’s interests were likely related to Estonian mobilization plans and capabilities, general defense plans, and allied troop placement. Both Metsavas and his father were given Estonian citizenship in the early 1990s. Volin is a retiree who formerly worked as a Soviet Union border guard and later for the Estonian prison service. [source] (Analyst Comment: A large part of the challenge for counties like Estonia and Latvia is that they’re home to sizeable ethnically-Russian populations at risk of recruitment by Russian intelligence. During the Cold War, native ethnic populations were replaced with ethnic Russians, who stayed behind after the collapse of the Soviet Union. Today, those populations may still have pro-Russian sentiments, and are therefore problematic to national security for the Estonian and Latvian governments.)

 

Indo-Pacific

Significant Developments:

US must ‘make room’ for China’s military power

Robert Kaplan, senior advisor at consulting firm the Eurasia Group, speaking at the Singapore Summit on 15 September, said that China’s rise in military power “cannot be denied,” describing the U.S. presence in Asia as a “balancing” or “stabilizing force.” “The U.S. has to make room for a rising China in Asia militarily, economically. The question is how much room. And that takes a very nuanced policy to say the least, to convert Asia from a uni-polar to a multi-polar security world.” The U.S. announced last month its $113 million in infrastructure spending for the Asia Pacific region following withdrawal from the Trans-Pacific Partnership (TPP) trade deal in 2017. This is seen by some as the U.S.’s rather disproportionate response to China’s trillion-dollar Belt and Road initiative. Kaplan also expressed concern about the potential massive scale of cyber attacks, which could elicit a conventional military response. [source]
Trump administration’s secret anti-China plans
Two anonymous Trump administration officials have leaked a plan by the administration to launch an “administration-wide” offensive against China in the coming weeks. This offensive is said to be both rhetorical and substantive with participation by the National Security Council, Commerce, and Defense. As part of the plan, the administration plans to unveil new information about Chinese hostile actions against U.S. private and public sectors, and to act on it; call out China’s “malign activity” in cyberattacks, election interference, and industrial warfare; and release large amounts of data to support the charges. The sources were unable to explain the timing of this offensive given the activities described have been ongoing for years. [source]
U.S. approves military sales to Taiwan
On Monday the U.S. approved military sales to Taiwan, estimated by the Pentagon to be worth $330 million, drawing criticism from China. The deal, which was proposed by the Taiwanese government last year, includes spare parts for F-16, C-130, and indigenous defense fighter aircraft. A statement by a Chinese military spokesman demanded that the sale be canceled, “in order to avoid the next step in damaging China-U.S. military relations and peace and stability in the Taiwan strait.” A spokesman for Taiwan’s president said the defense enhancements would help ensure “cross-strait and regional peace and stability.” [source]
Taiwan can win a war with China 
Last year Chinese President Xi Jinping spoke to the 19th Party Congress about the future of Taiwan. In the speech he said that China had “sufficient capability” to defeat any plans of secession by Taiwan. According to two recent studies, one by political scientist Michael Beckly of Tufts University, and another by Ian Easton, a fellow at Project 2049 Institute, the outcome of a cross-strait conflict is far from certain. According to People’s Liberation Army (PLA) plans, China would march into Taipei within one week if a conflict were to erupt, and within two weeks they would have implemented martial law in order to convert the island into a forward operating base that the PLA would use to defend against Japanese and American counter-campaigns. Looking at a Chinese force of 915,000 combat troops and a budget of $154.3 billion, compared to Taiwan’s 140,000 combat troops and 10.4 billion dollar budget, it could be easy to conclude a lopsided Chinese victory. The studies by Beckly and Easton tell a different story. Probably the greatest hurdle for an easy Chinese victory is the element of surprise. It is likely that Taiwan would detect a pending Chinese offensive 30-60 days ahead of time. This would give Taiwan ample time to finish the readying of an already hardened island. The strait would be mined; the berms of each of Taiwan’s 13 beaches have been covered with razor leaf plants; chemical treatment plants near many of the beaches would likely release toxic gases in the case of indiscriminate bombings; steel cables would be strung between skyscrapers and rock outcrops to thwart rotary-wing aircraft; tunnels, bridges, and overpasses would be booby trapped; and Taiwan’s dense urban core would be used to draw Chinese forces into difficult fighting in the city streets. While the Taiwanese Army says it could only hold off the Chinese for two weeks after the landing, the PLA believes it will lose the war if it is unable to defeat the Taiwanese within two weeks. As it turns out, small nations like Taiwan do not need a PLA-sized military budget to keep a much larger enemy at bay, particularly when they are fighting from a defensive position. [source] (Analyst Comment: For the past few years, Chinese military exercises show that they still have some command and control problems, and that’s just based on the information publicly released. Internal communications may show even worse problems, as the nation hasn’t fought in a war since 1979. A conflict with Taiwan, or with the U.S. in the South China Sea, would likely be a high intensity one including cyber, electronic, and information warfare tactics in addition to conventional air, land, and sea operations. That’s a lot of pieces to synchronize, and I have doubts that China could execute those tasks as well as the U.S. military could. Additionally, if the Taiwanese could potentially have 30-60 days of early warning, that would give the U.S. and its allies enough time to build-up assets in the area. A war on Taiwan, however likely it is, could start a global conflict. Certainly China knows this. A military defeat would be a large set back to China’s economic goals and outlook.)
China: We’re trying to save the world from the U.S.
On Monday, the same day as an escalation in the trade dispute between China and the U.S., China released a 71-page white paper accusing the Trump administration of “trade bullyism practices” that threaten the global economy’s recovery. On Monday, the administration levied tariffs on an additional $200 billion of Chinese goods, while the Chinese government retaliated by targeting roughly $60 billion worth of U.S. imports. In another sign of deteriorating trade relations between the two countries, Beijing has reportedly cancelled mid-level trade talks with Washington and called off a proposed visit to the U.S. by Chinese Vice Premier Liu He. The Chinese white paper portrayed China as the victim in the dispute, but it also said that it was ready to fight a trade war if that’s what the U.S. wants. “I think there is a fundamental miscalculation on the two sides that is going to lead to a prolonged trade war,” said Eswar Prasad, a professor at Cornell University. [source]

Middle East 

Significant Developments:

Iranian leaders try to spark more anti-American backlash

Both the Islamic State and an ethnically-Arab opposition movement called the Ahvaz National Resistance claimed responsibility for an attack that reportedly killed 25 people, including 12 members of the Islamic Revolutionary Guard Corps, at a military parade. Various Iranian officials blamed the U.S. and its Arab allies in the region, as well as Israel, for the attack. Secretary of Defense Mattis and Secretary of State Pompeo both denied U.S. involvement. Iran’s Intelligence Ministry reported that 22 people have been arrested in connection with the attack, which involved gunmen firing on a parade-viewing stand. Five gunmen were reportedly killed. [source]
Analyst Comment: Some Iranian officials were quick to blame the United States for the attack in order to foment anti-American backlash among the Iranian people. U.S. sanctions are crippling the Iranian economy, multi-national corporations like Daimler Benz have pulled out to avoid the implications of those sanctions, and there’s civil unrest and rioting across the country, which puts a lot of pressure on Iranian leaders. In Wednesday’s solo press conference, President Trump seemed to predict that Iran would “come back” and try to make a deal with the United States that would allow them to avoid further sanctions. This looks a lot like a replay of the president’s “maximum pressure” strategy with North Korea. But that looks increasingly less likely to succeed as European nations are implementing new rules, such as a new payment system, that will allow them to keep doing business with Iran. On Tuesday, National Security Advisor John Bolton had some strong words for Iranian leaders during his address to the United Nations. “If you cross us, our allies, or our partners; if you harm our citizens, there will indeed be hell to pay.” He continued, “Let my message today be clear: We are watching, and we will come after you.” That’s similar to the talk from President Trump’s infamous “fire and fury” tweet, which reportedly convinced the Kim regime that war was a real possibility, and perhaps imminent, given North Korea’s then-recent threats against the United States. As for Iran, no one expects Iranian leaders to approach President Trump with hat-in-hand and, as long as European powers continue to undermine the Trump strategy, progress with Iran remains at a stalemate. As long as Jim Mattis remains at the helm of the Defense Department, it’s difficult to see the United States going to war with Iran unless a serious red line has been crossed. It appears, for now, that the U.S. strategy will be maximum pressure against the Iranian theocracy, in hopes of further developing a youth-led, democratic transition of power.
Saudi Arabia at its least stable in 50 years
 
Despite numerous challenges over the past 50 years, including a determined assault by Osama bin Laden and al-Qaeda early in this century and the Arab Spring uprising, Saudi Arabia has remained stable and the line of succession had remained clear and uncontested. That has been altered with a change in succession to Crown Prince Mohammed bin Salman, the young son of King Salman bin Abdul-Aziz Al Saud. Mohammed bin Salman’s judgment and competence as defense minister are increasingly in doubt.  Perceived failings include the war in Yemen, which is producing an anti-Saudi reaction worldwide; a blockade of Qatar that has caused the near collapse of the Gulf Cooperation Council; speculation that the Saudis were involved in an attack in Ahvaz, Iran; and the arrests of prominent Saudi opponents, leading to capital flight and reduced foreign investment. As long as Mohammed bin Salman’s father is on the throne, the crown prince will be his most likely heir, but if the king dies “suddenly and soon,” the succession could be contested and violent. The author questions the wisdom of the Trump administration’s support of the prince and Saudi Arabia’s involvement in Yemen. [source]

North Korea

Significant Developments:

DPRK uses cryptocurrency too skirt sanctions 

The Democratic People’s Republic of Korea (DPRK) may be earning as much as $200 million for its nuclear and ballistic missile programs via its crypto-currency channels, according to Priscilla Moriuchi, a former top National Security Agency official charged with overseeing cyber threats from East Asia. The complex scheme, variations of which are used extensively by international criminals, involves using crypto-currencies to avoid detection by regulatory and criminal investigative agencies.  In this case, crypto-currencies are being used to circumvent U.S. sanctions against North Korea. Using “mixing” and “shifting” services, the DPRK is able to launder the money by breaking up like crypto-currencies (mixing) and then exchanging them for other currencies (shifting).  These new crypto-currencies can then be brought into one of the exchanges and converted into fiat currencies, such as U.S. dollars, without attribution or detection. [source]

 

// END REPORT

– S.C.

 

 

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