The U.S. Is Focusing on Europe When It Should Be Looking to the Pacific

Written by Adam English
Posted June 23, 2022

“We must be the great arsenal of democracy. For us this is an emergency as serious as war itself. We must apply ourselves to our task with the same resolution, the same sense of urgency, the same spirit of patriotism and sacrifice, as we would show were we at war.”

This quote from one of President Franklin Delano Roosevelt’s “fireside chats” may not entirely apply today, but at its heart is the same sentiment and intention we see today.

I will not dive into the politics or minutiae of the war in Ukraine. You can find as much of that as you want elsewhere.

Instead I want to talk about two historic changes. One that happened before, one that is happening now, and why we should pay attention to how they are similar.

The quote above is from what is now known as FDR's “Arsenal of Democracy” speech from December 29, 1940.

It was as much a declaration of foreign policy as it was a declaration of intentional excess. It staked a claim for the U.S. to be the on-demand arsenal of the free world — or at least for our allies.

It also may have staved off an absolute disaster in the Pacific.

Both are lessons we should take to heart today.

By the time FDR delivered his speech, the U.S. had already started investing in critical commodities and defense after nearly two decades of intense post-World War I downsizing and outright neglect. It could hardly be done overnight.

It would be years before Great Britain could host a force that could break the Nazis’ Atlantic Wall... Years before Russia had the arms needed to reclaim land in the Battle of the Caucasus or end the siege of Leningrad, let alone drive to Berlin... Years before the island-hopping campaign in the Pacific pushed into striking range of Japan.

But as FDR popularized the term “Arsenal of Democracy,” we were shipping what excess weaponry we had and tooling up an entire nation for war.

The U.S. is shipping massive amounts of weapons to Ukraine today. Many European nations are depleting their arsenals for this cause as well.

The current pace is wildly unsustainable. The parallels to the past are unavoidable, along with what comes next — a flood of money into long-neglected militaries for basic munitions, materials, and new technologies.

The Stinger missiles that are so prominent in Ukraine right now were out of production. Raytheon’s CEO Greg Hayes has warned the world that all the donations cannot be replenished anytime soon. Large-scale production, at best, may restart next year.

As Mr. Hayes recently put it, “We’ve been working with the DoD for the last couple of weeks — we’re actively trying to resource some of the material, but unfortunately, DoD hasn’t bought a Stinger in about 18 years and some of the components are no longer commercially available.”

The Javelin missiles we are sending are rapidly depleting as well. Back on March 25, U.S. Assistant Secretary of the Army for Acquisition, Logistics, and Technology Doug Bush (what a mouthful) — basically the top procurement official — cited both types of weapons as being possible to restock but at cost and with effort to bring them up to speed.

As he put it, “I think, really, those are two opportunities for the Army to rapidly move ahead, the way Congress wants us to replenish those stocks.”

And the high-tech HIMAR systems, drones, and newer, more mobile artillery won't go very far in a war of attrition with a much larger foe.

The money is already available — the U.S. alone has pledged a total of $54 billion to support Ukraine.

That is just that start of what needs to be committed today for what we want tomorrow, and it doesn't even begin to include what we desperately need to guarantee our own defense in the years to come.

While Ukraine is working with our old weapons in what has turned into a familiar fight over land, the real threat to the U.S. is in the Pacific.

America was arming up just in time for World War II to hit home with the attack on Pearl Harbor and the brutal Japanese conquest of the Philippines. Today, we're focusing on Europe again when once more we should be looking to the other side of the globe.

The stakes are just as high now, if not higher. The Chinese navy is already the world's largest, and it just launched its first modern aircraft carrier with several more in the works.

And its missile technology is becoming world-class. Its latest is capable of speeds exceeding Mach 5, with an estimated range of over 1,200 miles. For a sense of scale, a nuclear-capable rocket like this can launch in New York City and hit Miami in less than 12 minutes.

Right now, the U.S. government is talking to just about everyone it can to supercharge a surge of spending to deal with a clash of superpowers in the Pacific again.

We already know all the big names are involved — Raytheon, Lockheed Martin, Boeing, Texas Instruments, and so on and so forth. They'll all be involved as always, spearheading the biggest projects.

But all of these companies will be looking to a much smaller one that is absolutely essential to making the kinds of high-tech weapons and defenses that will counter China's deadly new rockets and ramped-up weapons production. 

This company's tech is already being used in the newest Stinger missiles, and it's already making rockets for Boeing and the Defense Advanced Research Projects Agency (DARPA).

It's even working on the engines that NASA needs to get astronauts to the moon for the first time in over half a century.

The U.S. is tooling up for a wartime economy, and a broad swath of it will depend on what this company is building today.

It will be a multi-year, escalating surge. It will mean ever-increasing weapons shipments overseas and a flood of R&D spending to get next-generation designs crucial to our defense off the drawing board.

There has never been a better time to invest in both basic military spending and advanced tech since the days of the Iron Curtain and perhaps the start of World War II.

No one knows this better than Jason Simpkins. Jason and his readers are perfectly positioned for the surge in spending on both fronts.

He just dropped some new research on the company at the heart of the new high-tech rocket push that you should check out. And stay tuned for more from him. A lot is in the works, and the present is mirroring the past. We know what that means, and Jason knows how that works.

Take care,

adam english sig

Adam English
Editor, Outsider Club

follow basic @AdamEnglishOC on Twitter

Adam's editorial talents and analysis drew the attention of senior editors at Outsider Club, which he joined in mid-2012. While he has acquired years of hands-on experience in the editorial room by working side by side with ex-brokers, options floor traders, and financial advisors, he is acutely aware of the challenges faced by retail investors after starting at the ground floor in the financial publishing field. For more on Adam, check out his editor's page

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