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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

Will The US Run Out Of Missiles? It Is Possible But Not Probable

Jeffrey C. Borneman | September 23, 2014

Obama now has his Syrian War (albeit delayed by Putin's intervention in 2013). On the first night of bombing alone, the US used 47 Tomahawk missiles leaving only 4,000 in inventory (spread around the globe), 100 on order for 2015 and none beyond that. At this pace, the US will soon run out missiles.

Back in March of this year we learned the Pentagon was forced to cut procurement of both Tomahawk and Hellfire missiles as the program's funds were diverted for research and development of the next generation missile. The problem is whatever weapon is produced won't be ready for at least a decade. 

Seth Cropsey, director of the Hudson Institute’s Center for American Seapower, told The Washington Times in March of the reduction and elimination of both missile systems: “It doesn't make sense. This really moves the U.S. away from a position of influence and military dominance.”

Cropsey added that " ... if someone were trying to 'reduce the U.S. ability to shape events' in the world, they couldn't find a better way than depriving the U.S. fleet of Tomahawks. It’s breathtaking.”

Cropsey was by no means alone in his assessment. 

“The administration’s proposed budget dramatically under-resources our investments in munitions and leaves the Defense Department with dangerous gaps in key areas, like Tomahawk and Hellfire missiles,” said Rep. Randy Forbes (R., Va.), a member of House Armed Services Committee.

Investor NOTE: Will the US allow itself to run out of the mainstay missile on which it has so heavily relied to project power? Hardly. DEMAND for Defense will be met regardless of the cost or who must be dragged kicking and screaming. The indication of this is in the immediate statement by the Pentagon.

Lt. Caroline Hutcheson, a Navy spokeswoman at the Pentagon noted, "The current inventory of Block IV Tactical Tomahawks exceeds combat requirements (emphasis mine). (However) "A recertification line for existing missiles will be established to retain effectiveness of current TacToms," she added.

The "Recertification process will provide high-tech upgrades to the existing design and increase production to help meet the Demand spurred by the War in Syria," says the Department of Defense.

The investor takeaway? Current events reiterate the point that Defense Demand does not kneel before eloquent but ultimately vapid theories that promise national security through diplomacy without the muscle of munitions as an ever-present stick behind the posturing. Given current pressures, further funding to increase inventory is expected.

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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