The Rebirth of the American War Machine

The fact is, when the Cold War ended and the Soviet Union collapsed, America made some bad decisions. The fact is, when the Cold War ended and the Soviet Union collapsed, America made some bad decisions.                                                                                                      [Outsider Club Header] Dec 08, 2023 By Jason Simpkins for the Outsider Club The Rebirth of the American War Machine Complacency… Overreach… Bureaucracy… Shortsightedness… All these things and more have put America’s security in a precarious position. The fact is, when the Cold War ended and the Soviet Union collapsed, America made some bad decisions. Too many to really get into here, really. But suffice to say, policymakers, lobbyists, and even the arms dealers themselves let our country’s manufacturing base atrophy. With no true near-peer competitor to contend with, America saw no need to prepare for war. So rather than continue to churn out munitions that would only sit in warehouses, defense contractors curtailed production and focused instead on elaborate and expensive high-end weapons platforms like fighter jets and submarines. Then came the wars in Iraq and Afghanistan, and military interventions in Lebanon and Syria, which drained America’s once-robust stockpiles — just as Russia and China rushed to grow their arsenals exponentially. Now, having shipped off most of our excess supplies to Ukraine, and still more to Israel, we’re in a bit of a bind. And the only way out is a multimillion-dollar build-out of manufacturing capacity. 9 Billionaires Shifting Funds Here (Plus Warren Buffett) The smartest investors in the world are making a BIG move right now. David Tepper, Steve Cohen, Bill Gross, Paul Tudor Jones, Jeremy Grantham, George Soros, Carl Icahn, Jim Simons, and Larry Fink... They're jumping into oil and gas stocks with both feet. Meanwhile, 99% of investors can’t see what’s coming. According to Keith Kohl, our oil and gas analyst, three powerful economic triggers are converging on the oil markets right now... A "perfect storm" unlike anything we’ve seen in 50 years. The last time this happened, a small group of oil companies made 20x returns in a few years. Some gains were as high as 3,000%! That’s exactly the type of oil company Keith is recommending today.  He’s calling it "the No. 1 oil stock of the decade." [Get the name and ticker here before oil prices surge higher.]( For example, RTX (NYSE: RTX) and Rafael Advanced Defense Systems just announced plans for a new $33 million production facility in Arkansas. The plant will manufacture missiles to be used in U.S. and Israeli air defense systems — namely Tamir missiles for Israel’s Iron Dome system and an American variant called Skyhunter. Indeed, the Iron Dome is the most active missile defense system in the world, and it’s only getting busier. But, naturally, it’s not just Israel that needs to worry about rocket attacks, which is why the Skyhunter was developed for similar systems in the United States and Europe RTX plans to break ground on the new facility by the end of the year. It’s set to start production in 2025 and ultimately churn out 1,000–2,000 missiles annually. Similarly, Lockheed Martin (NYSE: LMT) is working to increase its output of Javelin anti-tank missiles, which were instrumental in rebuffing Russia’s initial invasion of Ukraine. As it currently stands, Lockheed Martin produces about 2,100 Javelins per year. Yet Ukraine is burning through them at a rate of 500 per day. And they’ve been so successful that other countries are lining up to acquire them for their own defense. In particular, Poland and its state-run defense group PGZ have signed a memorandum of understanding with both Lockheed Martin and RTX to jointly produce Javelins there. Lockheed Martin hopes that will be part of an effort to increase its annual production to 3,960 by 2026. The Stinger anti-aircraft missile is another hot commodity that’s seen resurgent demand. Unfortunately, that caught RTX off guard because the missile has been out of production for 20 years. There's $322 Billion Worth of Lithium in Northwest Alberta...Why Can't Anybody Touch It? For more than 40 years, an oil company has been working a 671-square-mile chunk of northwestern Alberta, producing its lifeblood using brine that’s kept in hundreds of massive storage ponds. These storage ponds have long been known to contain a massive lithium resource, totaling an estimated 4.3 million tons. Just recently a tiny Vancouver-based technology company, founded and headed by petrochemical industry veterans, figured out a way to extract the lithium from this brine, very quickly and very efficiently. So efficiently, in fact, that the company can filter this oil field brine, returning it to the pond after processing, with a better than 95% capture rate. Production of salable lithium will cost between $3,000 and $4,000 per ton, while market rates price lithium at $70,000 per ton. They know where the lithium is, they know how to extract it, and, as of now, they have an agreement in place to work this giant lithium-rich property. Commercial production is now projected to be in place by the middle of 2024, with buyers already lining up. [Interested? Enter here to learn more.]( In a sign of just how bad things got, a request for 1,700 Stingers made by the Army in May 2022 won’t be fulfilled until 2026. RTX has even had to call up retired engineers (some of them now in their 70s) to retrain its current employees in their production. And finally, America’s supply of 155 mm artillery shells have been absolutely eradicated by a conflict that’s seen anywhere from 4,000-8,000 rounds expended each day. In a hurried effort to backfill those stocks, General Dynamics (NYSE: GD) has gone from producing 14,000 155 mm rounds per month to 20,000 and is working with the Pentagon to further expand production to 100,000 rounds per month in the years ahead. Happily, that effort is ahead of schedule. And that is the good news here. We never should have let things deteriorate to this extent, but a massive backlog of new orders has provided the kind of long-term sustainability for production programs that hasn’t been seen since the Cold War. Companies like RTX, Lockheed Martin, and GD can now invest in new plants, new workers, and new supply chains, confident that the demand and government funding is there. The Biden White House even allocated $30.6 billion to acquire missiles and munitions in the current fiscal year, up 51% from the 2022 level. So the investments are being made. And if investors get in now, they’ll be there to reap the gains when these contracts finally get fulfilled. Of course, if you really want to profit from defense spending, you should check out my latest report on cutting-edge AI technology that’s powering the war machines of the future. You can [find out more about that here.]( Fight on, [Jason Simpkins Signature] Jason Simpkins P.S. 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