Dear Reader,
Today I want to talk about President Trump’s trade deal with Europe that’s coming into focus…
Plus, how Silicon Valley and the world’s smartest investors are involved…
And, finally, our top defense stocks to benefit from the massive increases coming to military spending across the globe.
European Council President António Costa said that Europe’s increased military spending is going to involve buying U.S. arms…
And this is really helping the trade deal that is being worked between the United States and Europe.
A lot of folks gave President Trump a hard time about this.
Really, he was 100% right.
I support the President 1,000% on this, in the sense that the world is really entering a new cycle of geopolitical great power competition – a new cycle of war.
And unfortunately, with what Russia did in Ukraine, and to a lesser extent Iran, and China providing both of these countries with arms, the war machine is back on.
It’s a big deal.
I was talking to my daughter this weekend. She was worried about war.
I explained to her that the idea here isn’t to increase military spending to start a war; it’s to dissuade people from picking a fight with you.
To do that, you really gotta be a 7-footer.
You have to be a foot taller than everyone else.
You want to be the biggest, baddest kid on the block.
As Reagan said, “peace through strength.”
Or Teddy Roosevelt, “speak softly and carry a big stick.”
Teddy Roosevelt’s who I named my son after – big fan.
Anyway, it’s interesting that NATO is going to really push through the trade deal…
Which has been President Trump trying to get Europe to carry more of its weight.
Because as I’ve said in these videos, in the past, the U.S. military doctrine required being able to fight a two-theater war. But we really can’t do that with China.
All U.S. resources have to focus on China, and Europe has to handle Russia. That’s just the way it has to be.
So European Council President António Costa has just confirmed what we’ve been hearing through our sources and through the grapevine: that NATO’s going to be spending more money.
Nations have agreed to spend 5% of GDP.
I have some facts and figures here on 2024 military spending as a percentage of GDP for NATO members to give you an idea of what that means…
Poland already spends 4%…
Estonia spends 3.5%.
The U.S. spends around 3.5%, too.
Latvia spends 3.2%. Greece, around 3.1%. Lithuania, about 2.7%.
Basically you see the Eastern European countries – the countries that are closest to Russia’s border – spend the most.
That’s because they are the most concerned, rightfully so.
And Greece, with its very troubled history with the Ottoman empire, spends a good amount, too.
Finland spends about 2.6%. NATO as a whole spends about 2.6%.
The U.K. spends about 2.5%.
Northern Macedonia, Germany, Sweden, France, Montenegro, Croatia, all spend about 2%.
Portugal and Italy spend about 1.5%.
Spain spends about 1%.
Canada actually spends less than 1.5%.
So the question now is, as NATO, Europe re-arm, where is that money going?
Again, the President has pushed these countries to buy U.S. weapons, which is good for us, because not only does it give our arms manufacturers more customers, but it also allows us to get economies of scale on these weapons.
China, with its 1.5 billion people, hits scale very quickly.
NATO investing in U.S. weapons allows us to leverage Europe’s population to achieve economies of scale…
Which reduces the price of production per unit, for every unit we push out.
So this gives us the scale to compete with China – a very shrewd decision by the President to do that.
And it aligns the U.S. tighter with Europe. Which I am also a big fan of.
The President was very hard on Europe in the beginning, but you can see the plan coming into focus now – what goal that was serving.
And it was serving a very important goal as far as I see it.
Look, I’m happy about this.
A lot of the companies we’ve been recommending are the biggest beneficiaries of this spending…
Especially the stocks we picked in the special report we put out recently exposing China’s kill list, which leaked after President Trump got elected.
This was the real reason Elon Musk was summoned to the Pentagon to look at our war plans for China.
So you get an idea now that Silicon Valley – via Elon Musk, Palmer Luckey who runs Anduril, Peter Thiel and the Palantir guys, etc. – has finally entered the ring.
They’ve moved on from “woke” ideals and turned their attention to protecting America.
They understand what we’ve understood for a long time – which is, whose world do you want to live in?
The authoritarian dictatorship regime run by China?
Or do you want to defend American values for freedom?
Do you believe in the enlightenment as our founders believed, that our authority doesn’t come from the state, as it does in China, but that it comes from God?
That “divine authority” means we actually get to choose our leaders. It’s a fundamental difference in world views.
It’s very important to defend that, as I tell my kids.
And this is a supercycle for defense – make no mistake about it. It’s going to last a long time.
The war machine has been turned on. If you’ve been following our work here at Behind the Markets, this won’t surprise you.
We’ve been ringing the alarm about this for over a year now.
Hopefully it stops anybody from messing with us and keeps the world at peace for a long time as we push a lot of money to these new weapons platforms, many of which are in our Breakthrough Wealth portfolio.
As I’ve said before, that means defense contractors at the center of this strategy – especially those building modern missile systems, drones, and critical defense AI – will be the biggest beneficiaries of this pivot.
We’re watching this unfold right now.
This is why I’ve been urging readers to get ahead of this new cycle.
Not by panicking – but by preparing.
That’s what we’ve done with our newest defense stock report. We’ve pinpointed the American and allied contractors positioned at the center of this geopolitical shift.
These are the companies building the future of defense – at a time when our current and future enemies are growing bolder by the day.
Make sure to position yourself for what’s coming.
“The Buck Stops Here,”
