IISIA Monthly Report - ETH Z · PDF file · 2016-05-04IISIA Monthly Report ... Marriot Hotel in Islamabad Burst into Flame Because of the Suicide Attack7） ... the son of the founder,

IISIA Monthly Report

Institute for International Strategy and Information Analysis Inc.

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Table of Contents

Table of Contents 2

Chapter 1 Geopolitical Risks and the Financial Market

Takeo Harada, CEO

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～Which Would Be the Stage of an Explosion of Geopolitical Risk

to Make a “Sea Change”, Iran or Russia?～

Chapter 2 The Latest Move in the Intelligence Community

and the Military Technology

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Takeo Harada, CEO

～Read the “Sea Change of Money” from

What We Call “2018 Strategic Bomber Issue”～



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Chapter 1 Geopolitical Risk and Financial Market

～Which Would Be the Stage of Geopolitical Risk

to Make a “Sea Change”, Iran or Russia?～

By Takeo Harada, CEO

In the September issue of our report,1 we explained in detail why to observe

geopolitical risks is so important. In this report, we will concretely examine each of

geopolitical risks that can trigger an urgent “see change” in the global affairs. However,

since the following examinations are analyses for particular cases, we would

recommend readers who have not read the previous issue to read it.

（１）The Latest Move in the U.S. Navy～Secretly Gather in the Middle East～

As of the late September, the US Fifth Fleet led by aircraft carrier Ronald Reagan has

a prominent presence in the Middle East. According to open sources, we can confirm

that this fleet was deployed in the north part of Arabian Sea at least until September 15,

replaced by aircraft carrier Abraham Lincoln.2

＜Figure 2－1: Arabian Sea and Surrounding Area＞

（Source: Wikipedia3）

At the same time, intriguing is that another fleet has headed towards the Middle East,

namely the fleet lead by the aircraft carrier Theodore Roosevelt4. If the two fleets will be

deployed together, US navy’s highly remarkable preparation for war will be observed in

1 http://www.haradatakeo.com/personal/mr.html 2 http://www.gonavy.jp/CVLocation.html 3 http://ja.wikipedia.org/wiki/%E7%94%BB%E5%83%8F:Arabian_Sea_map.png 4 Ibid.



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the Middle East through the end of October.

Generally speaking, the gulf countries are Yemen, Oman, UAE, Iran, Pakistan, and

India. The fact that the mobile units are arriving in this area suggests that the

geopolitical risk can explode here. Therefore, we analyze the recent situation and future

perspective of this area, focusing particularly on Pakistan first and then on Iran.

（２）Pakistan ～Seek the Fact of the Terrorist Bombs～

On September 20, at 7 pm of local time, there was a terrible suicide bombing at

Marriott Hotel in Islamabad in Pakistan5 and around 60 people were killed. As the

evidence left there was closely resemble to other previous bombing attacks, the media

around the world reported that this attack could be also operated by the Al Qaida and

Taliban which supports them.6

（Picture: Marriot Hotel in Islamabad Burst into Flame Because of the Suicide Attack7）

It might be true, indeed. More than that, there is a very intriguing fact – most of the

hotels that had become the targets of the attacks were hotels under the Marriott brand8.

In fact, when the World Trade Center was attacked on September 11, 2001, the Marriott

was involved in the disaster. After then, the chain has been targeted by terrorist attacks

5 http://www.marriott.com/marriott.mi?page=EmergencyHotelStatus 6 For example, see http://diepresse.com/home/politik/aussenpolitik/416050/index.do 7

http://www.telegraph.co.uk/news/worldnews/asia/pakistan/3023114/Islamabad-suicide-

bombing-Scores-killed-at-Marriott-Hotel.html 8 http://www.marriott.com/marriott.mi?page=EmergencyHotelStatus



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in Karachi in 2002, Jakarta in 2003, and Islamabad in 2004. These attacks were all said

to be done by Al Qaida.

The Marriott Hotels are a well-known hotel chain owned by the Marriott

International.9 The chain’s history can be traced back to the motel started in 1957 by

John Willard Marriott, who was born in 1900 in Utah. The current president is John

Willard Bill Marriott Jr., the son of the founder, who believes also a Mormon as his

father. As one of the world’s largest hotel chain, the group’s 2007 annual sales was 129

billion dollars. The current president has a blog on the Internet on which he wrote his

thoughts on the recent disaster, showing his unexpectedly progressive attitude.10

It is difficult to decide whether there is a close connection between the owner

family’s devotion to Mormon Church and the terrorist attacks by Al Qaida. However,

Japanese individual investors and businessmen should be aware of the following two

possibilities.

Firstly, since there have been a series of attacks on Marriott hotels, one should be

aware of the potential of the same kind of attacks at the place where a hotel of the

Marriott group stands, as long as the possibility of attacks on Marriott hotels are

excluded. In fact, there are five hotels of the group in UAE, two in Pakistan, and five in

India.11 We should be cautious about the possibility of bombing attacks around these

places.

Secondly, we should note that there was “a fact” that was never reported but in the

local media – there was a very strange phenomenon in the last bombing attack.12

According to the report by the local media, on the fourth and fifth floors of the

Islamabad hotel were iron boxes that had been monitored by the US marine. However,

nobody – neither Pakistani security authority nor the guards of the hotel –knew what

the boxes were. And actually, this box was brought in the hotel some time between

September 16 and 17, when Mike Mullen, chairman of the Joint Chiefs of Staff visited

Islamabad. When the box was brought in the hotel, no security check was done. More

9 It is written mainly here, http://en.wikipedia.org/wiki/J._Willard_Marriott 10 http://www.blogs.marriott.com/default.asp?item=2264403 11 https://www.marriott.com/hotel-search.mi 12

http://www.daily.pk/politics/politicalnews/7422-what-was-mysterious-activity-going-on-i

n-the-marriott-hotel-islamabad-by-united-states-marines.html



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than that, every exit and entrance of the hotel was locked.

In fact, when the US embassies both in Kenya and Tanzania were “attacked by Al

Qaida” in 1988, the US launched a massive attack by cruise missiles in Afghanistan and

Sudan. According to the recent disclosure of the information, this whipped up Al Qaida’s

anti-US feeling.13 We should note that as for the recent terrorist attack in Islamabad,

US may “find a cause” and use it as their reasoning for revenge.14

（３）Iran ～ the Hidden Scenario Behind the Rising Tension～

In the previous issue of this Monthly Report, we presented the following analyses and

predictions.15

・ Losses caused by the US risk assets are soaring, and the “trans-border investors”

such as funds and investment banks, who want to cover their losses, seek a way to

manipulate accounting rules.

・ While postponing the “accounting shock”, they produce a massive geopolitical risk,

even in a limited way, involving a huge sea-change in money markets, especially in

the commodity market.

・ The most possible target of the geopolitical risk is Iran. However, we should note

that Iran has the gold so that they will be able to keep their position to have profit

from the possible situation, even though they are involved in a limited conflict.

As of now (late September, 2008), there has been no explosion of a geopolitical risk in

Iran, or more concretely, a limited air campaign to Iran by Israel or/and US. However,

this does not mean the analyses and predictions mentioned above were excluded. Rather,

the later the explosion occurs, the bigger it will be. For the following reasons, we, IISIA

will keep the analyses and predictions through the end of October.

13 http://www.gwu.edu/~nsarchiv/NSAEBB/NSAEBB253/index.htm 14 In this regard, it should be noted that, when the bombing attacks were done, the

middle executives of the US marine leaked that “according to the US and Afghanistan

intelligence sources” Pakistani army practiced logistic operations for Talibans by

helicopter several times in the midst of warfares in Afghanistan between the US army

and Taliban.（http://www.defensenews.com/story.php?i=3733901） The story seems

nothing other than plotted, even though they say this happened by chance. 15 http://www.haradatakeo.com/personal/mr.html



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First, Israel’s domestic situation is extremely

insecure. While Prime Minister Olmert has faced

bribery allegation, which could force him to

resign, the governing party Kadima held a

presidential election on September 17. As a result,

Tzipi Livni, the foreign minister, an ex-Mossad

agent, and peace-seeker of the Middle East, was

elected.16 Shortly after then Olmert announced

to resign, and the administration has come to the

end.

However, there is still concern over the situation around Israel. Rather, experts argue

that critical situations are yet to come. Livni has to form a coalition administration

including Labor Party in 42 days by the end of

October. At the same time, Transportation

Minister Shaul Mofaz, who fell in the second

place in the election by a 431-vote margin,

announced a sudden retirement from the

politics, drawing attention how he, the former

chairman of the Joint Chiefs of Staff will act as

a power-broker.17

In addition, although Livni has won the

election with pleading for reforms, Olmert will

be in the office until Livni’s new cabinet will have been completed. This means a serious

problem – Olmert keeps having Prime Minister's right to dismiss the members of his

cabinet.18

As Livni seeks a renovation of the politics in Israel, when the new administration has

inaugurated, Olmert, who has been heavily tainted by corruption, will be driven into a

corner. At the same time, although Livni is a well-known peace-seeker, some say that

the current peace making process between Israel and counterparts like Syria is based

16 http://jp.reuters.com/article/topNews/idUSLH62065120080917 17

http://www.faz.net/s/RubB30ABD11B91F41C0BF2722C308D40318/Doc~E2A6CE0591F

044FC9B17AA9F2E29A8D05~ATpl~Ecommon~Scontent.html 18 http://www.israelnationalnews.com/News/News.aspx/127703

Transportation Minister Mofaz

and Freign Minister Livni

（Source: FAZ）

Banker Buster Bomb GBU-39

（Source: Boeing HP）



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on Olmert’ s private connections. Therefore, to keep his face, Olmert will possibly use

his diplomatic crafts by the end of October, narrowing Livni’s diplomacy preemptively.

To put it more concretely, as another option as well as the Palestine problem, it would be

a possible scenario that the Iran problem is kept for a while and then finally exploded as

a limited air campaign.

Secondly, regardless of the domestic matters, the Israel military as well as the

country’s military-related companies has found huge interests in the possible limited air

campaign to Iran, and could have already begun preparing for it. One proof for this is

that US has finally agreed to sell banker busters to Israel, which Israel has asked US to

provide in order to attack the underground nuclear facilities in Iran.19

US decided to sell GBU-39 Banker Busters by Bowing to Israel.20 Although the Bush

administration formerly rejected to sell them to

Israel, in the midst of the political situation just

before the presidential election, Israel lobby in the

US has put pressure on the administration to

finally agree on the sales. It seems that US had no

choice but doing so. Still, when a limited air

campaign is practiced, the effectiveness of the

weapon produced in the US, which is the very

situation for the purpose of the manufacturer.

In addition, among Iranian companies the US

imposes financial sanctions on, there is one of the most important UAV manufacturers

in Iran. On September 17, the US Treasury has added 6 military-related companies into

the sanction list, which includes HESA, an Iranian aircraft producer.21 In the press

release of the US Treasury, it is clearly written that this company is famous for the UAV

(“Ababil”), and that is why the company was included in the sanction list.

At the same time, as we examined in the previous issue of this Monthly Report, the

19 http://www.worldtribune.com/worldtribune/WTARC/2008/ss_israel0522_09_15.asp 20 http://www.boeing.com/defense-space/missiles/sdb/docs/SDB_overview.pdf

The destruction capability of the bomb can be seen in the following images.

http://jp.youtube.com/watch?v=XbtzpqZOtB8 21 http://www.treas.gov/press/releases/hp1145.htm

Made in Iran UAV“Ababil”

Source: Moscow Institute of

Physics and Technology HP



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most important product in the weapon market for the US and Israel is UAV.22 It is

possible to assume that the US and Israel were competing against Iran over the

dominance of the UAV market in the Middle East, and that is why the US put the

sanction on Iran. When the limited air campaign is practiced in Iran, it is likely for us to

observe the UAV war for the first time. This will lead to the expansion of the UAV

market, needless to say.

Thirdly, it should be noted that Iran is provoking the situation in an obvious way. The

Army of the Guardians of the Islamic Revolution, the most conservative and aggressive

units of the Iranian army, has been deployed on the coast of Persian Gulf since

September 16, while the Iranian Air Force did the biggest ever exercise for several days

since September 15. 23 In this circumstance, the IAEA has announced a report

suggesting that Iran has continued the nuclear development, and Iran has shown a

posture to thoroughly condemn such move.24

Even seeing the situation mentioned above, there are some experts saying that after

all both Iran and Israel are just bluffing and Israel is especially doing a psychological

game so that there will not be an air campaign.25 However, we should note that

although seemingly opposing to the Western countries including the US, (1) Iran shows

a move to file their candidacy for the board of IAEA26; (2) Iran as well as the US is

included in the IMF task group for setting an investment guideline for Sovereign

Wealth Funds, the top priority of the IMF at the moment, and this means the US and

Iran share the same “sea change” in the financial capitalism.27 These two facts suggests

that the US and Iran will possibly cooperate to “realize” the air campaign to generate a

sea change in the world of money. The most possible date for the campaign is, as

mentioned earlier, some time by the end of October, while the domestic situation in

Israel is unstable, the US navy mobile units are flexible to be deployed, and the US

domestic situation is most unstable just before the presidential election.

22 http://www.haradatakeo.com/personal/mr.html 23 http://www.worldtribune.com/worldtribune/WTARC/2008/me_iran0524_09_16.asp 24 http://www.defensenews.com/story.php?i=3727872 25 http://www.defensenews.com/story.php?i=3734943 26

http://www.spacewar.com/reports/Iran_Syria_seeking_seat_on_IAEA_board_diplomats_

999.html 27 http://www.iwg-swf.org/index.htm



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＜Figure2－2: NY Gold Price Transition＞

＜Figure2－3: NY Crude Oil Price Transition＞

（Source: Fuji Futures28）

Just as if leading this move, the oil and gold are rising from late September, although

most commodities were falling in the summer. Some explain that when the dollar falls

the gold and oil are rise. However, the dollar is rising as of now (the end of September)

because of credit withdrawals in the US market, and the conventional explanation

mentioned above is not logical. Now, why the oil and gold rise? We reiterate that the

biggest factor is the financial market has no other solution but creating effectual

demand by exploding a geopolitical risk and the situation can be already in the make.

28 http://www.fuji-ft.co.jp/chart/0n-genyu/index.htm



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（４）Russia ～ High Strategy to Use Hard and Soft～

Now, let us see the situation around Russia, which has

been harshly accused by Western countries after the

conflict in Georgia.

In the first place, there has been a dispute over the

cause of the conflict: Which is responsible, Russia or

Georgia? Then, in mid-September, it was revealed that

Georgia had explained to Western countries about the

reason for their preemptive invading into South Ossetia

before the invasion based on the information they had

obtained monitoring in the pro-Russia faction’s mobile

phone.29 President Saakashvili was forced into the corner by this report as well as by

the alleged improprieties at the last election.30

＜Figure2－4: Russia RTS Index Transition＞

（Source: FC231）

In the meantime, Russia, which has “won” the conflict over Georgia, has never done

any military demonstration after then, showing rather strangely timid behaviors. The

29 http://www.asahi.com/international/update/0917/TKY200809170049.html 30 http://www.nzz.ch/nachrichten/international/georgiens_opposition__1.833354.html 31 http://lemonchord.web.fc2.com/rts.html

President Medvedev Discuss

with Financial Leaders

Source：Reuters



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reason is that after the conflict, the Russian market was thoroughly sold off.

In this situation, the Russian government has changed their hard-line stance.

Especially notable is that Russian President Medovedev led this move by making a

statement at Kremlin in front of the newly arrived US ambassador that Russia seeks

improvement of the relationship with the US, and this was reported to the world

through media.32 Then, being urged by Russian business circle, President Medvedev

repeatedly announced that the government continue to take measures to cope with the

financial crisis by offering massive liquidity to the market as well as giving out the fund

they have accumulated by exporting the oil and natural gas. At the same time, the

collapse of Lehman Brothers, the fourth biggest investment bank in the US gave an

additional blow to the situation.33

However, it is definitely wrong to decide by seeing their timid attitude that Russia

has become weak and lost their strategies. Because, by showing this timid attitude,

Russia has blinded the eyes of the US. More than that, they have taken a new step to

approach Central and South America as well as the Middle East.

In the first place, when losses by the US risk asset have been soaring, sovereign

wealth funds (SWF) were expected to be a final solution. Russia’s SWF was regarded as

one of the biggest one. However, when the US Treasury Secretary Paulson visited

Moscow in June, Putin bluntly said, “There is no SWF in Russia”, and Paulson was

shocked.34 In other words, Russia declared that the US would have no right to decide

the fund supplies by SWFs. In September, Lehman Brothers collapsed and Morgan

Stanley was on the verge of M&A, “Russian money” was expected to be offered into the

market, but Russia would not buy the US asset through the SWF. As a result, Japan

was actually forced to play the role that had been expected for Russia, as Nomura

bought the Asia and Europe divisions of Lehman Brothers35 while Mitsubishi UFJ

Financial Group funded Morgan Stanley. 36 As recognizing that the current financial

meltdown is as serious as the financial turmoil happened in the end of 1920s through

1930, one can notice the excellence of Russia’s strategies compared to Japan’s behavior.

32 Ibid. 33 http://www.business-i.jp/news/china-page/news/200809170015a.nwc 34 http://www.reuters.com/article/etfNews/idUSL3028241920080630 35 http://www.nikkei.co.jp/sp2/nt242/20080922AS2C2202E22092008.html 36 http://www.nikkei.co.jp/sp2/nt242/20080922AS2C2202M22092008.html



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In this situation, as for the conflict in

Georgia, which has once caused the fall of

Russian stock market, Russia has shown

a hard-line attitude. At the press

conference in Sochi on September 20,

Prime Minister Putin announced that

Russia would reject to withdraw their

army from South Ossetia and Abkhazia37.

More than that, they exhibited the

Georgian tanks they have taken as war

bounty in South Ossetia.38

In the meantime, in September, Russia announced that they would send two strategic

attackers (Tu-160) to Venezuela to patrol the coast area of South America.39 Plus, in the

Middle East, Russia and Syria agreed to construct a military port, which will enable

Russian navy to be deployed in the area.40

As mentioned above, although Russia has a “good look and soft image” of President

Medvedev to appeal a non-hard-line attitude towards Western countries on one side, on

the other side Prime Minister Putin presents the uncompromising hard-line strategies

towards Western countries. While Russia has shown the presence in the Middle East

and Central and South America, “the front yard”, just in the transition time of the

presidential administration, the US must have been frustrated. As for South America in

particular, Russia has announced that drug deals were profited for the US intelligence

agency only. This could lead to a clash between the US and Russia.41

However, does Russia have a serious intention to battle against the US? Not at all.

37

http://www.nzz.ch/nachrichten/international/kein_russischer_abzug_aus_abchasien_un

d_suedossetien__1.869360.html 38 As IISIA has already reported in various media, most weapons of Gerogia’s army

were made in Israel, and it is understandable that how shocking for Israel the

demonstrations at the conflict were. In addition, some in Russia say that the US and

Israel has strengthened their presence in Georgia not only to show their presence off to

Russia but to use Georgia as a base to conduct surveillance missions.

（http://en.fondsk.ru/article.php?id=1624） 39 http://www.mnweekly.ru/news/20080919/55347609.html 40 http://www.gulfnews.com/region/Syria/10244870.html 41 http://en.fondsk.ru/article.php?id=1615

Tu-160 Strategic Bomber “Black Jack”

Source: http://www.aviation.ru



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Lately Russia has been repeatedly saying that their military equipments are weak and

the army was damaged in the battle in Georgia so seriously that the government needs

to improve national defense power by funding the defense industry.42 Still, we should

never be fooled by such propaganda. In fact, we should note that Russia intends to

generate military demand as domestic demand to strengthen the base of Russian

economy. This is an excellent strategy of Russia, the experienced and shrewd world

power.

As discussed above, we have examined the developments in September and the areas

of note for the October. Although there was a notable move, such as a report on the

rumor of Kim Jong-Il’s death, we did not include it in our analysis, as a possible

explosion of geopolitical risk is much more likely in the Middle East, judging from the

recent deployment and development of the US navy. Regarding the North Korea

problem, we will analyze it again in a future issue.

42 http://www.mnweekly.ru/comment/20080911/55345897.html



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Chapter 2 Latest Move in the Intelligence and the Military Technology

（１）The Latest Move in the Military Technology

～Read the “Sea Change of Money” from

What We Call “2018 Strategic bomber Issue”～

Takeo Harada, CEO

On September 11 and 12, the so-called “Bomber Summit” was held at Tinker Air

Force Base in Oklahoma in the US.43 The conference of 40 people from the bomber units

of the US Air Force had drawn attention even before its opening, as the briefing on the

“bomber roadmap” was likely to be delivered. As of now (the end of September), the

content of the briefing has not disclosed, but it is significant for us, Japanese individual

investors and businessmen to see the coming sea changes in the markets.

The reason is, firstly, that it has been said that all of the strategic bombers (B-52, B-1,

and B-2) will be decommissioned in 2037.44

＜Figure3-1: Expected Retirement of the Strategic Bomber Owned by U.S. Air Force＞

（Source: Air Power Australia45）

43 http://www.af.mil/news/story.asp?id=123113577

44 The U.S. Air Force White Paper on Long Range Bombers.

See http://www.fas.org/nuke/guide/usa/bomber/bmap99.pdf, at 21-22

45 http://www.ausairpower.net/Heavy-Bomber-Aust-Av.pdf



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However, at the moment, US aircraft manufacturing companies are rushing to sell

their new models to be equipped in 2018. The timing has been 20 years ahead of the

scheduled reequipment. Why? The Pentagon released the Quadrennial Defense Review

(QDR) on February 3, 2006, 46 in which they expressed their intention to deploy new

bombers in 2018. 47

Characteristic of the QDR is that it insists the necessity of restructuring the capacity

of the US army to cope with new security challenges, based on the recent operations and

experiences under the long war against terrorist networks.48

＜Figure3‐2: Direction Seen in QDR＞

（Source: 2006 White Paper on Defense49）

46 http://www.defenselink.mil/qdr/ 47 http://www.afa.org/magazine/march2008/0308issbf.asp 48 See “the United States” in section 2 of Chapter 1 in 2006 White paper on defense

（http://www.clearing.mod.go.jp/hakusho_data/2006/2006/index.html） 49 Ibid.



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First of all, in Nuclear Posture Review (NPR) 50released in 2002, the US proposed

that the army should change their defense stance from the emphasis on nuclear

weapons concerning the confrontation against the former Soviet Union to that of the

new deterrent forces including the normal forces and missile defense system.51

Concretely, the review proposed to change the three new fundamental equipments to

new ones: from (1) ICBM, (2) SLBM, and (3) strategic bombers to (1) aggressive

capability of nuclear forces as well as normal forces, (2) defense system, and (3) national

defense foundation (defense industry and procurement).

As these review on the nuclear system clearly suggests, strategic bombers, one of the

three fundamental equipments under the cold war world order, has been destined to

lose its significance. As we featured the UAVs in the US army in the last issue of this

Monthly Report,52 the US has speeded up the full deployment of the UAV. This is

obviously because the US has shifted its weight to the normal force that is not based on

the nuclear force.

However, when the Air Force 53needs no man in the operations, there will be a

number of redundant staff members including many pilots. This is a grave situation for

the Air Force. Therefore, it is natural that they try to recover from a setback in the

administration. In this circumstance, strategic bombers attract attention. In fact, in an

event held by Air Force Association on May 1, Mark T. Matthews air force major general

said, “Our belief is that the bomber should be manned”. 54 For the insiders of the Air

Force, the new manned bombers should be deployed before the UAVs will establish

overwhelming presence in the defense strategy. This is obviously a review of the defense

plan rather than a review of the nuclear force system.

Thus, since this has an ulterior motive, “the 2018 strategic bomber plan” has been

harshly criticized by various parties. For instance, in the Next Generation Bomber:

Background Oversight Issues and Options for Congress, a report presented by CRS on

March 7, the CRS argues that whether the 2018 strategic bomber plan is really

necessary or not is depends on what kind of conflict will happen by the time when the

50

http://www.defenselink.mil/DODCMSShare/briefingslide/120/020109-D-6570C-001.pdf 51 Ibid. 52 http://www.haradatakeo.com/personal/mr.html 53 http://www.afa.org/ 54 http://en.wikipedia.org/wiki/2018_Bomber



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conventional 3 types of bombers will be retired, namely between 2015 and 2040.55 In

addition, there is an objection that there is no necessity to produce and equip new

bombers, as the situation can be coped by updating the conventional three types in

various ways.56

For instance, even in 1999, there has been an evaluation that B-2 bomber, the latest

model at the moment, can be updated to improve the capacity by 10 times compared

that of 1992 by 2004.

＜Figure3‐3: Performance Improvement Seen in Version up of Current Strategic

Bomber＞

Bomber Effectiveness

(Relative to 1992)

（Source: The Air Force Association57）

In fact, even though the Air Force eagerly seeks to deploy the new bombers by 2018,

there is a question if the timing can be met. Referring back to the past, the history of the

development of bomber has always been behind the schedule.58 For instance, the B-1

bomber was ordered by the Pentagon in 1970, the first test flight was done in 1974, the

Carter administration stopped the development, the Regan administration restarted it

in 1981, and the full deployment of the bomber was realized finally in 1986. In addition,

as for the development plan of B-2, the stealth bomber, which is hard to be found by the

radar, although it launched in the 1970s, and Northrop accepted the order in 1981, and

the first flight was realized in 1989, the full deployment was in 1997. Therefore, it is

said that, despite the eagerness of the Air Force, whether the plan will be realized as

55 http://www.fas.org/sgp/crs/weapons/RL34406.pdf 56 http://www.afa.org/magazine/june1999/0699bomber.asp 57 Ibid. 58 http://www.afa.org/magazine/march2008/0308issbf.asp



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scheduled is “at best, uncertain”.59

However, this situation suggests that the Air Force longs for a conflict where their

bombers fly over the distance equipped with massively destructive bombs. For instance,

in the Operation Enduring Freedom, the Al Qaida cleanup operation, on October 7, 2001,

the Air Force launched B-52H and B-1B bombers 10 times each day from the Diego

Garcia base on the Indian Ocean.60 It was truly “A Heavy Bomber Renaissance” of

heavy bombers to choose such a remote target as Afghanistan that can be reached only

by the long distance bombers.61 In fact, experts point out that since the Air Campaign

in Kosovo (March 1999) the stealth aircraft has become essential to an air campaign

and in this operation in Afghanistan, the strategic bombers has become essential to

carry out the range and payload attacks.62

＜Figure3‐4: The list of U.S. Air Force Strategic Bomber Load, from Left B-52, B-1, B-2＞

（Source: Air Power Australia63）

Interestingly, some experts say that the new 2018 strategic bombers will be necessary

when a conflict will occur in the Far East region.64 In addition, this is not a desk theory.

In the QBR, which brought about the 2018 strategic bomber issue again, it is revealed

that US navy will shift the weight of force in the Pacific, suggesting the presence of

59 http://www.csis.org/component/option,com_csis_pubs/task,view/id,4301/type,1/ 60 http://www.ausairpower.net/Heavy-Bomber-Aust-Av.pdf 61 Presidential candidate Obama (Democratic Party) has argued the early closure of the

war in Iraq, while clearly saying to shift “the main battlefield” to Afghanistan. Arguing

peace and continuation of warfare at the same time seems contradicting at a glance, but

when overseeing his stance according to the logics of the Air Force, his manifest is

actually consistent. 62 http://www.afa.org/media/reports/Bomber0207c.pdf 63 http://www.ausairpower.net/Heavy-Bomber-Aust-Av.pdf 64 See http://www.fas.org/sgp/crs/weapons/RL34406.pdf, at 21.



20

China as a potential threat.65 It is also revealed that in the meantime, in ten years from

2005, the US navy will send back 100,000 people including 60,000 to 70,000 soldiers and

their family members, and the civilian officers to the homeland.66

By examining these facts, we can see a scenario the US is considering. That is, while

the US army personnel are sent back to the homeland from all over the world under the

name of the transformation of the army, conflicts will occur in places where the

deterrent power becomes absent. This consequence will more likely in the Far East

region, and there the potential threat is China. And then, when there will be an

emergency, the Air Force will send the new strategic bombers. As long as this demand

can be created, pilots of the Air Force will not lose their job.

＜Figure3－5: The Conceptual Picture of “the 2018 Strategic Bomber” on the HP of

Boeing＞

（Source: Boeing67）

It is true that the budget for the development of the new strategic bombers is zero,

while the huge amount of the money is distributed to the next generation of the tanker

plane, the development of the satellite and the F-35 bomber.68 However, it is too early to

conclude that the 2018 strategic bomber, the “dream project” of the Air Force has

completely discontinued.

Actually, aircraft manufacturers are the stakeholders that can accelerate this

65 http://www.defenselink.mil/qdr/ 66 http://www.clearing.mod.go.jp/hakusho_data/2006/2006/index.html 67 http://www.boeing.com/defense-space/military/2018bomber/index.html 68 http://www.afa.org/magazine/march2008/0308issbf.asp



21

situation. The most aggressive stakeholders, namely Boeing and Lockheed Martin,

announced on January 25 that they agreed to develop the new strategic bomber

cooperatively. On the website of Boeing is presented the final sketch of the plane,

showing their eagerness.69

On the other hand, Northrop Grumman, the rival manufacturer that did not

participated in the consortium, announced a report entitled “The 2018 Bomber: The

Case for Accelerating the Next Generation Long-Range Strike System”, showing their

enthusiasm, too.70 In this report, the next generation long range striker is the first

bomber after WWII, which clearly shows that the Air Force sees China as the potential

enemy.

When leaning the situation around the development of the new strategic bombers in

the US mentioned above, Japanese individual investors and businessmen should note

that 2018 might be a target date when a conflict can be triggered by the US in Far East

region. More than that, there will be possible danger that small conflicts can be set as

“test cases” even before the full deployment at the target date, namely 2018.

In addition, the new administration starting in 2009 will last until 2016 at longest,

and it is possible that the administration starting in 2017 will trigger a regional conflict

in the very beginning as it seeks a change in the situation. When we compare the

current financial crisis with the crisis in 1929, we cannot avoid remembering that in

around 10 years after then, in 1937 the Marco Polo Incident near Beijing triggered the

Japan-China War, while in 1939 Germany’s invasion into Poland the WWII in Europe. If

a conflict is triggered in East Asia again, a rise in the market will never be failed to be

staged, while a huge sea change of money will be definitely invoked in the commodity

market when the conflict occurred.

In this regard, we should keep watching the 2018 strategic bomber issue as a typical

reflection of a sea change the US players are setting up.

69 http://www.boeing.com/defense-space/military/2018bomber/index.html 70 http://www.defence-data.com/current/page41040.htm



22

（２）The Latest Move in the World’s Intelligence Community

Open Source Conference 2008 sponsored by Director of National Intelligence (DNI)

was held in Washington D. C. on September 11 and 12.71 As this conference is a great

opportunity to know the present situation of the Open Source Intelligence (OSINT),

Masaaki Kikuchi, visiting researcher at IISIA participated in it. The following is the

special report on the conference by Kikuchi.

～”Open Source Conference” Organized by the U.S. Government

Special Report (Part 1)～

Masaaki Kikuchi, Visiting Researcher

On September 11 and 12, I participated in the DNI Open Source Conference 2008

sponsored by ODNI (Office of Director of National Intelligence72) in Washington D. C.

The DNI is the head of the fifteen intelligence agencies, collectively called Intelligence

Community (IC). In the wake of the 9.11 simultaneous terrorist attacks the lack of

cooperation among intelligence agencies were pointed, and in 2004 the Intelligence

Reform and Terrorism Prevention Act of 2004 was enacted by reviewing the National

Security Law, establishing the post of DNI. Although the head of the CIA served

concurrently at the start, now the post has become independent and DNI is in charge of

directing IC. John Negroponte, the first DNI, serves as the Deputy Secretary of State

currently.

In this report, I would like to tell the purpose and premise of the conference.

First of all, let me explain what the open source is. At the conference there was a basic

session about the effectiveness of open sources, and it presented that there has already

been more profound as well as technological discussion going on in the US. Therefore, I

would like to sort out what the open source, the premise of the conference, is.

“Open source” literally means that the information open to the public, and available

for free or relatively meager fee. For instance, information publicized on the Internet,

including blogs, media reports, books, academic papers, are open sources. Plus,

geographical images, maps, images, photographs, financial data, environmental data

71 http://www.dniopensource.org/ 72 http://www.dni.gov/



23

and so on are included. OSINT, or open source intelligence is a related word, which

means collecting open source information to use for analyses at the government,

security agencies, and business, as well as reporting the information and knowledge

obtained from open source. However, the conference was not “Open Source Intelligence

Conference” but “Open Source Conference” – this is an important difference.

One of the characteristics of this conference was its openness. This was not only

because it focused on the open source which is currently drawing attention worldwide.

The registration was free and anyone from any countries was allowed to participate in.

The same kind of conference held in 2007 was attended by 1,000 people. This time, the

conference had more than 1,800 attendances. 80 universities, 35 states, 47 think tanks,

60 media outlets from 38 countries were there. Private companies set up exhibition

booths to display their products for open source intelligence analysis.

The purpose of the conference was to learn more from experiences of organizations,

individuals, and experts to deepen insights to carry out better practice for the issues on

national security. According to the mission statement of the conference, the open source

will offer an ideal mechanism for sharing information.

In other words, by not limiting the purpose in OSINT, which already sounds a little

worn-out, but by creating “the open source” as an upper concept, DNI aims at

establishing a platform to strengthen the cooperation among intelligence agencies. The

co-sponsor of the conference was Open Source Center (OSC) 73 and US Department of

Homeland Security (DHS) 74, which are under the supervision of the DNI.

OSC was founded in 2005 as an agency to analyze materials (information) collected in

the open source. They collect information from the Internet, databases, media reports,

radios, televisions, video products, geographical data, photographs, and commercial

images, as well as offer trainings to make use of them. The current head is Douglas

Naquin, who once worked for Foreign Broadcast Information Service (FBIS). FBIS is an

agency that collects information from televisions, radios, newspapers, and conference

73

https://www.opensource.gov/login/login.fcc?TYPE=33554433&REALMOID=06-0005c35

7-460d-1240-80bf-8348feffff3b&GUID=&SMAUTHREASON=0&METHOD=GET&SMA

GENTNAME=osc-frontdoor&TARGET=-SM-http%3a%2f%2fwww.opensource.gov%2flo

gin%2findex.html 74 http://www.dhs.gov/index.shtm



24

reports, government reports by cooperating with BBC to offer the daily report and other

forms to IC.

On the other hand, DHS is an agency founded through the experience of the 9.11

simultaneous terrorist attack, which was launched on November 25, 2002, when

President Bush signed legislation creating a new cabinet-level Department of

Homeland Security. This is rather an integrated organization of executive offices than

an intelligence agency, and it includes the coast guards, the air traffic control agency,

the secret service that had been under control of the Treasury, the border guard that

had once been under the supervision of the Immigration and Nationalization Services of

the Justice Department. Therefore, while IC deals with classified information, DHS

deals with those of lower sensitivity in a wide range. In this regard, the open source is

significant, especially in order to link these agencies.

The word “open source” might remind of the term of computer technology such as

LINUX. In this case, the code of the operation system, which has been regarded as

classified information, is disclosed to the public so that any user can improve the OS as

they want. Users can feed back and share what they learned with the creators and other

users. That is, with collected information and intelligence, not only the original creators

but also various users including many experts can improve the software.

The open source in the intelligence world can be explained in a similar perspective.

Information itself is open to the public and easy to obtain. Although there might be a

language barrier, a variety of information is available on the Internet. Therefore, it is

better to share the methods to more effectively and efficiently collect and analyze it

rather than to respectively collect and analyze it to deliver each other. For instance,

although the information and analysis method are different between FRB and CIA, the

information and analysis at each hand might be useful to each other. Or, a new method,

which was not for useful for the agency that had developed it, might be useful for

another. With the open source, this kind of sharing and analysis of information can be

promoted.



25

In addition, by making the

environment for analysis open, related

parties can work in a cooperative

system as if they were working in the

same office, even though they are in

different places or time zones. This is

called the cooperative analysis under

the competitive environment, which is

one of the research and development themes at IC. In other words, to make the open

source an upper concept rather than a conventional intelligent source, IC can link each

other to share information for a higher development. It is true that there will be a risk

that the information and methods will be widespread from IC, by involving other

parties to the open environment; the whole process can be an important intelligence

activity.75

Therefore, the purpose of the conference was to encourage more experts to participate

in. For this very reason, the registration fee, and other services including breakfast and

lunch were offered free at each round table seating 8 people. Participants can sit at a

table as they want, talk to the people there to construct a new relationship. There are

people of ODNI, OSC and DHS

involved too. In this very “open”

environment various experts are

involved. (The picture on the right is

the reception table at the entrance.

The left counter is for sign-up, and

behind it is an entrance for the

exhibition booth area.)

During 2-day conference, there were five key-note speeches, three panel discussions,

75 In fact, when thinking that the base of the intelligence activities is to analyze

information obtained from human contacts (HUMINT), it is obvious too that the concept

of the open source, which is now strongly backed by the US, cannot be regarded just

positively without reservation. The conference was open for public, both for government

officials and commoners, from any countries – this means that the US might have a

strategic intention to directly contact the competitors of their OSINT activities, whose

face cannot be seen on the PC screens through the Internet. Although IISIA will follow

the consequence of the conference, keeping this in our mind, we will never fail to pursue

the moves of the US for the interest of the nation and society of Japan.



26

four module sessions, and “the open source innovation challenge session” that involves

participants. In the next issue, I will deliver a report on this session. (The picture on the

right shows the lunch time. I enjoyed talking with intelligence experts from other

countries.

End



27

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