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HomeUncategorizedGlobal Alert: U.K. Signals 'Pre-War' Phase, Dashing Hopes for Sustained Peace Dividend

Global Alert: U.K. Signals ‘Pre-War’ Phase, Dashing Hopes for Sustained Peace Dividend

Global Alert

There are more signals that the world is entering a new era of collective defense, and 2024 may represent that inflexion point. One of the world’s most critical commercial arteries in the Red Sea is becoming too unsafe to traverse, with fresh attacks striking American-owned ships despite retaliatory bombings by U.S. and U.K. armed units. Overnight, Iran’s Revolutionary Guards also launched ballistic missiles and armed drones toward the Erbil airport in northern Iraq, where U.S. and other foreign soldiers are stationed.

“Now is the time for all allied and democratic nations across the world to ensure their defense spending is growing,” U.K. military Secretary Grant Shapps announced at the Lancaster House in London. “Because, as argued, the period of the peace dividend is ended. In five years’ time, we might be looking at numerous theaters including Russia, China, Iran and North Korea.” As a result, Britain will be deploying approximately 20,000 people to lead NATO’s newest Exercise Steadfast Defender, marking one of military alliance’s largest deployments since the end of the Cold War.

“We find ourselves at the dawn of a new era,” Shapps concluded. “The Berlin Wall a distant memory and we have come full circle, going from a post-war to a pre-war environment. An age of idealism has been supplanted by a time of hard-headed realism. Today, our opponents are feverishly strengthening their barricades. Old adversaries are reanimated. New adversaries are taking form. Battle lines are being redrawn. The tanks are actually on Europe’s Ukrainian yard. And the foundations of the international system are being rattled to their core.”

“We stand at this crossroads – whether to yield to a sea of difficulties, or do everything we can to avert the threat. I believe that, in truth, it’s no option at all. To safeguard our freedoms, we must be prepared.”

What to watch:

The push for increases in defense expenditure comes at a time when many Western economies are being stressed by enormous debt loads and increased interest rates. Over the previous two decades, European countries have cut back even more owing to budget deficit constraints and a reliance on the U.S. security umbrella, and rechanneling funds away from sectors like health, education and infrastructure – or enacting greater taxes and expenditure cutbacks – won’t be popular. While Donald Trump recently scored a clear win in Iowa as the 2024 presidential election begins, American military expenditure is projected to climb at an exponential pace no matter who is in government, with the defense budget increasing every year since 2016.

Defense stocks:

Lockheed Martin (NYSE:LMT), Raytheon (NYSE:RTX), Northrop Grumman (NYSE:NOC), Boeing (NYSE:BA), General Dynamics (NYSE:GD), L3Harris Technologies (NYSE:LHX), Huntington Ingalls Industries (NYSE:HII), Leidos (LDOS), CACI International (CACI), Honeywell (HON), General Electric (GE), KBR (KBR), SAIC (SAIC), Textron (TXT), TransDigm (TDG), Parker-Hannifin (PH), ManTech International (CG), Oshkosh (OSK), Jacobs Solutions (J), Teledyne (TDY), BWX Technologies (BWXT), Parsons (PSN), Eaton (ETN), Curtiss-Wright (CW), Amphenol (APH), Mercury Systems (MRCY), Ball Corp (BALL), Howmet Aerospace (HWM), TTM Technologies (TTMI) and HEICO (HEI).

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The push for increases in defense expenditure comes at a time when many Western economies are being stressed by enormous debt loads and increased interest rates. Over the previous two decades, European countries have cut back even more owing to budget deficit constraints and a reliance on the U.S. security umbrella, and rechanneling funds away from sectors like health, education and infrastructure – or enacting greater taxes and expenditure cutbacks – won’t be popular. While Donald Trump recently scored a clear win in Iowa as the 2024 presidential election begins, American military expenditure is projected to climb at an exponential pace no matter who is in government, with the defense budget increasing every year since 2016.

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