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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

The Brewing Wars - Three Events Today

Jeffrey C. Borneman | March 10, 2015

The movement of US military hardware to the Baltic's; Repeated calls for a united European War Machine, and; Iran unveils new weapons. Let's take a look and think about the ongoing DEMAND for Defense.

The US & the Baltic's

"The United States on Monday delivered more than 100 pieces of military equipment to vulnerable NATO-allied Baltic states in a move designed to provide them with the ability to deter potential Russian threats," says US Major General John R. O'Connor (AP). The lethal weaponry was delivered to Estonia, Latvia and Lithuania, "all NATO and European Union members since 2004, (which) have very little military hardware of their own."

O'Connor added that the armor would stay "for as long as required to deter Russian aggression". This loosely translates as: The hardware was gift to the States and if it is used, replacement hardware would be forthcoming.

Eurozone News

EU Commission President Jean-Claude Juncker said today that the European Union "needs its own army to face up to Russia and other threats, as well as to restore the bloc's standing around the world," (EurActiv.com). The idea, although vehemently opposed by the United Kingdom, has many facets:

First it would show a united front to (ostensibly) counter Russian aggression but also because NATO, in its current form, would be "too slow" to respond to a Russian invasion of the any of the Baltic States. Secondly the new EU army would "show the world that there would never again be a war between EU countries," Juncker told the Welt am Sonntag newspaper. And lastly: "Such an army would also help us to form common foreign and security policies and allow Europe to take on responsibility in the world."

The road for Germany's entrance onto the world stage has been long in the making. I highlighted last summer Germany's military eagerness and ability to affect geopolitical outcomes. I also highlighted Germany's eagerness to enter the wildly profitable arms-trade. The question is, when might an army be formed? According to Germany's defense minister,Ursula von der Leyen, its formation is inevitable: "This interweaving of armies, with the perspective of one day having a European Army, is, in my opinion, the future."

Iran's Weaponry

On the heels of Netanyahu's US speech about Iran's weaponry and intentions, Iran today unveiled the new the Soumar surface-to-surface missile with improvements, it says, are considerable. According to Iran's Defense Minister Brigadier General Hossein Dehghan, "the new missile enjoys different characteristics in terms of range and pinpoint accuracy in comparison with the previous products," (WJ). He also claims all new missiles can avoid radar which of particular interest to both Israel and the US.

US Investors still have the luxury to calmly watch the Speed Chess portion of events. What follows is Blitz Chess and finally, Bullet Chess. Putin has made it clear that he will not allow Russia to be dragged into a war with NATO, yet NATO continues to tighten the noose. Saudi Arabia is more than 'concerned' about Iran's expansion into Iraq and the recent possible second-front from the fall of Yemen.

It is imperative for investors to know that the DEMAND for Defense will be met at the expense of all other things, and therefore, how specifically to allocate assets given the current geopolitical shifts unfolding. Monetary 'adjustments' are failing in all countries and direct fiscal spending on the War machine is evident everywhere. Where, when and between whom conflict comes is the only question. Despite technological advances, regardless of the increased ease with which great wealth can be amassed, our inherent instincts remain the same. Mankind has never changed.

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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