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What is MDEF™ Investing? Strategy before tactics. Strategic investments dictate tactical actions in the Metals, Defense, Energy & Food sectors.

- Jeffrey C. Borneman

UN's Goal To "Weaken" ISIS Only - Major Arms To Flow

Jeffrey C. Borneman | August 16, 2014

"The 15-member council unanimously adopted a resolution that aims to weaken ISIS and Al-Qaeda's Syrian wing Nusra Front," Reuters reported.

In what may go down as the biggest double-take of the year, the UN council's statement that ISIS must be "weakened" is certainly the front-runner if not the outright winner.

Let's put this in perspective: The best equipped (with US arms), best financed ($450 million in stolen cash and funds via US tax dollars through Syrian support), most ruthless terror army (beheading its way across Iraq) threatening to take Baghdad and send Energy prices soaring, must be "weakened" according to the feckless United Nations.

According to the EU ministers present, the UN action is "strong" and "sends the desired political message." 

This article could be about the morality of the UN's words - the fact that it did not order ISIS to 'stand down' now or be annihilated - but I want to draw investors' attention to the age-old issue of War as a distraction, and specifically DEMAND for Defense spending.

Investors will note that yesterday we received the headline news that "The recovery in Europe, not that there was ever much of one, is now over. As expected in this corner, Germany Contracts and France Stagnates in Second Quarter", from Townhall. It goes on to say:

"The data from the currency bloc’s two largest economies came as the embattled French government said the disappointing growth meant it would miss its budget deficit this year and halved its gross domestic product forecast for 2014 ... (and) Germany’s economy, which provides more than a quarter of the euro area’s output, shrank 0.2 per cent between April and June, according to official figures."

Using history as our guide, it should come as no surprise that the list of countries jumping to aid the Kurds is now long. The aid, of course, is military aid. This is DEMAND for Defense with no pretension other than "just business" as we discussed here

"Several European governments, including France, Britain, Germany, the Czech Republic and the Netherlands, have said they will send arms to the Kurds or are considering doing so," says Al Arabiya News. 

While the US had repeated it will not aid the Kurds, it has now joined in supplying arms but no troops. Canada has joined the fray as well. It seems the Kurds will be well-armed henceforth, but that presents a balance-of-power problem in itself.

DEMAND for Defense spending is rising across the globe as economies weaken and the grab for resources continues. Investors must take notice now and understand the alliances that are being reaffirmed as well as broken. New alliances are being formed by the most unlikely of countries as we watch the greatest geopolitical shift in our history, and the surge in DEMAND for Defense spending continues.

If you want to know more about how the MDEF™ Investing strategy is positioned in this, or other geopolitical possibilities, please contact us directly.

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