We’re About to See a New Wave of Global Defense Spending

In the next year, Russia will spend a third of its national budget on “defense.” Defense is in quotation marks there because Vladimir Putin’s concept of the word entails invading neighboring countries. 

That’s up from 28% in 2024 and should throw some icy-cold water on any notion that Donald Trump’s election will usher in a new era of global peace and prosperity. 

Of course, there’s no doubt that Trump will abandon Ukraine as soon as he takes office. But even as America abandons its European allies Russia will still have to carry out the gritty task of conquering Ukraine and other former Soviet satellite states. 

That’s not going to be easy. Especially for a military that’s proven as weak as Russia’s. 

Remember, Putin thought it’d take just days to topple Kyiv — not years. Yet its forces were not only rebuffed but sent into a full-scale retreat amid a humiliating Ukrainian counter-offensive. They’ve spent the past two years just barely pushing the frontline back toward the Ukrainian capital. And they’ve burned through so many conscripts in that effort that Putin had to augment his troops with poorly trained, porn-addicted North Korean reinforcements. 

Furthermore, with Trump assuming office in January, the Biden administration is making an 11th-hour push to give Volodymyr Zelenskyy everything he needs to hold out as long as possible. 

“We are going to do everything in our power for these 50 days to get Ukraine all the tools we possibly can to strengthen their position on the battlefield so that they’ll be stronger at the negotiating table,” National Security Advisor Jake Sullivan said over the weekend. “And President Biden directed me to oversee a massive surge in the military equipment that we are delivering to Ukraine so that we have spent every dollar that Congress has appropriated to us by the time that President Biden leaves office.”

Biden also relaxed conditions for Ukraine to strike well within Russia proper last month. 

Again, as Sullivan put it, “On January 21, the war in Ukraine doesn’t just go away.”

That’s why Russia is pushing its defense budget even higher. That, and because the war effort is literally the only thing propping up Russia’s economy. Which is to say its currency has once again collapsed, its workers have been drafted into war or died there, oil and gas prices are sagging, public services are degrading, and a large portion of its state assets have been jailed by Western sanctions. 

So now a third of Russia’s money streams into a war effort that’s devolved into a bit of a black hole. 

Once more, President Trump will rush to alleviate as much of Putin’s headache as he can, but there’s only so much he’ll be able to do. And while he may be keen to make Russia great again, the rest of Europe sees the writing on the wall. 

Europe as a whole and particularly the countries that broke free from the Soviet Union have a hell of a lot more at stake. That includes countries like Latvia, Lithuania, Estonia, as well as Poland and Finland. 

These countries have spearheaded a renaissance of actual defense spending in Europe.

To put some clarity on that, NATO Europe has doubled its spending in the past 10 years to roughly $380 billion. A record 23 of 32 NATO members are set to clear the alliance’s 2% of GDP spending guidance this year — up from just three in 2014. And the alliance’s petrified Eastern flank is even pushing the group to raise the defense spending guidance to as much as 3%.

Moving forward, European Commission President Ursula von der Leyen says the bloc will need to spend an additional $500 on defense in the next decade.

“After the U.S. election, we in Europe have to have our own [defense] plans,” Magdalena Sobkowiak-Czarnecka, Poland’s undersecretary of state for EU affairs, said last month.

Nevertheless, Europe isn’t so independent that it can defend itself without America’s defense industrial complex. 

These countries still need U.S. jets, tanks, missiles, bullets, artillery shells, satellites, radios, computers, chips, software…

The list goes on. Meanwhile, the U.S. defense budget edges closer to $1 trillion every year. And it’ll get there under Trump, trust me.

This confluence of European and American defense spending — to say nothing of soaring defense spending in Russia, Asia, and the Middle East — will ensure that companies like Lockheed Martin (NYSE: LMT), General Dynamics (NSE: GD), Northrop Grumman (NYSE: NOC), and RTX (NYSE: RTX) will continue to rake in record profits in the year ahead. 

And that’s not all. 

In the past year, I have positively crushed it on companies that work on advanced technology for the Defense Department. 

I’m talking about triple-digit gains like the one I talked about last week. And if you want to get in on those, all you have to do is check out my latest report for Secret Stock Files here.

Because defense is everything right now, and that’s going to continue to be the case going forward.