Were the Chinese Balloons Just a Warning?

Dear Reader,

Notice how talk about the Chinese surveillance balloons has been rather muted lately? 

I really think that it’s a testament to the effectiveness of our media spin doctors that in just over eight weeks, we can completely brush aside what was essentially a hostile encroachment by an unfriendly superpower on our sovereign territory. 

Taking a look at Google trends, which may be the ultimate barometer of public mindset, interest in the topic peaked within the first week of the incident, and within five weeks it had plummeted into obscurity.

You can’t put all the blame on the media, however. They are simply gaming the idiosyncrasies of the human mind for maximum screen time. 

But why would they bother to push this incident, unprecedented in brazenness, out of the public eye?

Was there more to the story that the powers that be simply did not want leaking out into the public and creating panic?

What Else Was the CCP Planning to Mount on Its Balloons?

One such story might be that this balloon was just a test flight designed to measure the speed and effectiveness of the American response. 

The Russians, after all, routinely send their lumbering Tu-95 Bear bombers over the Bering Sea to observe how long it takes us to scramble fighters for the interception.

Why should the Chinese be any different?

Well, there is evidence now that China's ambitions go beyond passive information gathering.

In fact, the ultimate plan with these balloons may be far more sinister than the government is letting on.

As this 2018 tweet indicates, the Chinese have been developing a methodology for delivering live munitions to their enemies from altitudes approaching 200,000 feet. 

And not just any munitions.

The weapons attached to the main structure suspended from the balloon are among the most feared in the world today — hypersonic missile glide vehicles. 

And it's more than just one isolated tweet.

Multiple Asian media outlets covered the story back in 2018, but the story was largely ignored in the West.

Now, you’ve been hearing about these hypersonic missiles lately because it’s one technological field where the Chinese have an apparent edge over the West… but to mount these already fearsome machines on a high-altitude delivery system, which could then be deployed en masse, completely changes the balance of global politics. 

Cheap, Scalable, Hard to Defeat

So maybe this first balloon was a warning… and the fact that it’s faded from public attention means that the message was received loud and clear. 

Of course, the U.S. isn’t going to just sit around and allow another nation to do to it what the U.S. has done to others, with impunity, for decades. 

It’s simply not in our cultural DNA. 

Hypersonic missile technology is a primary concern for today’s military strategists, as it has the potential to erase some of America’s iconic military assets quickly, with no warning, and with no realistic means of defense. 

The assets I’m referring to are The US Navy's 11 carrier groups — the ultimate calling card of American policymakers. 

Though they’re loaded to the gills with short-, medium-, and long-range surface-to-air missiles as well as close-in defensive systems like the Phalanx CIWS, the hypersonic missile's glide vehicle and whatever warhead it contains, conventional or nuclear, would make its final approach at Mach 4 — too fast for any existing air defense systems to reliably stop.

A swarm of such glide vehicles, which is exactly how the Chinese attack would arrive, would lay waste to any fleet. 

Though countermeasures are always being invented and refined to tackle increasingly challenging problems, the DoD’s usual approach of "the best defense is a good offense" holds here. Developing our own hypersonic missile arsenal is now a critical concern of the Pentagon. 

When the Going Gets Tough… the Tough Write Massive Checks

Over $16 billion in total has been committed by the U.S. armed forces to the development of a new generation of hypersonic missiles.

This new arms race with the world’s new superpower may seem wasteful, but there’s one thing that the management in the Pentagon gets right: It’s absolutely essential that we right any potential imbalance in military capability. 

Not doing so only invites more encroachment, and not just from the Chinese. 

Plenty of other rogue nations are itching to boost their geopolitical capital by publicly humiliating or undermining what's increasingly perceived as a declining empire.

The Russians have already used their own brand of air-to-surface hypersonic missile, the Kh-47M2 Kinzhal, in their invasion of Ukraine, so the deadly game of one-upmanship is underway whether we like it or not.

Today, the hypersonic missile race is one of the most talked-about themes in the defense sector. 

The investment community — at least the smarter members — have been looking for ways to capitalize on this DoD-financed trend from the very beginning. 

A 10-Year Trend… Kicking off Right Now

My colleague, Secret Stock Files editor and investment director Jason Simpkins, has been waiting for this moment for years. 

Right now he’s investigating a unique investment opportunity in the hypersonic missile space. 

Risk levels are low, but the payoff here, as the emerging trend gets rolling, is anything but. 

It involves one of the U.S.’s premier rocket motor producers — a key player in the coming revolution in defense tech and doctrine. 

There’s a lot to this story, but needless to say, it’s about as timely as it gets. 

To help you digest everything and get the full story on the best hypersonic missile play out there in today’s market, Jason’s published a quick video presentation. 

It’s brief, it’s entertaining, and, most importantly, it will leave you with a deeper understanding of the defense market and how to most efficiently leverage what we already know is going to happen into profits. 

No registration required. Just go here to access the video.

Fortune favors the bold,

Alex Koyfman

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His flagship service, Microcap Insider, provides market-beating insights into some of the fastest moving, highest profit-potential companies available for public trading on the U.S. and Canadian exchanges. With more than 5 years of track record to back it up, Microcap Insider is the choice for the growth-minded investor. Alex contributes his thoughts and insights regularly to Energy and Capital. To learn more about Alex, click here.