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One thing Trump and Hillary agree on: more defense

Wednesday, October 19, 2016 22:42
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(Before It's News)

This is quite an election season. Rarely do two candidates engender so much anger and disgust.

But there is one thing that actually unites them: a rebirth in defense spending.

In 2013, the U.S. Congress decided the U.S. government needed to slim down, so it enacted the sequester, which essentially meant budgets were slashed across the board. Since defense is the largest item on the U.S. budget, it got hit hardest.

That meant no spending on new weapons systems, no significant upgrades of technology or logistics.

Whether this is good or bad may be debatable, but the consequences are what we hear in both campaigns: The U.S. needs to rebuild its power and influence in the world again through its military might.

Again, I am not here to express my opinion on the wisdom (or stupidity) of this plan but to tell you how you can profit from it, if you choose to do so.

Beyond the politics, there is a real fundamental demand that will show we are at the ground floor of a major defense spending mega-trend.

Some of it comes out of simple necessity. We beat up, blew up and fired a lot of the aging equipment we had in the arsenal in our efforts in Iraq and Afghanistan. Iraq alone has lasted longer than any conflict the U.S. has been involved in… ever. You go through a lot of equipment regardless of the intensity of the conflict. You always have to be prepared.

That means the U.S. is about to go on a massive spending plan to restock our military arsenal. And much of the equipment will be brand spanking new, not just re-orders.

All the armed forces are looking to upgrade their systems and retire some equipment that has been around since the Cold War. It’s also about transitioning from a people-heavy force to an increasingly automated force — unmanned vehicles, cybersecurity, telecommunications.

And it has already begun.

For example, the Air Force has purchased the next generation long-range bomber the B-21 Raider which will not only replace the B-2, but also the B-52s that have been around since the Korean War. Each plane is expected to cost $500 million and the first build is about 100 planes. The second leg will double or triple that number.

The Navy is transitioning its projection of power by moving to Littoral Combat Ships (LCS) using unmanned boats to search for mines and unmanned helicopters to stay aware of what’s happening in the theater of operations.

There is a massive multiplier effect in all this, across each branch of the services. And both presidential front runners are more than willing to move this along.

If you want to take advantage of this mega-trend — because you’re not going to stop it from happening — is to look to the two major defense stocks, Lockheed Martin and Northrop Grumman.

Boeing will also likely benefit, but it is no longer the company it once was. Its commercial airline division and corporate welfare projects by the U.S. government have kept it alive over the years, but it’s more diversified than Lockheed Martin and Northrop Grumman.

Another good smaller play that will benefit mightily from the increased intelligence and cybersecurity business is a small firm called Mantech. It’s a leveraged play on a particular sector but could mean big profits in coming years.

— GS Early

The post One thing Trump and Hillary agree on: more defense appeared first on Personal Liberty®.

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