By David Forest, editor, Casey Daily Dispatch
We got some shocking news from Capitol Hill this week.
The Pentagon asked for more hard tech funding.
But not in America. Rather, top defense officials begged lawmakers to send cash for hard tech to two unlikely nations.
It’s all part of the yearly defense spending bill. Each year, the Pentagon gives Congress a “wish list” on spending. Defense officials highlight items they see as critical to national security.
This year, hard tech is front and center.
Hard Tech Is at the Top of the Pentagon’s Wish List
The Pentagon’s interest in hard tech rose sharply in recent years. Defense departments offered funding to American mining projects for critical metals like rare earths.
There’s a good reason for that.
China controls about 60% of the world’s rare earths supply. That’s a big problem. This hard tech powers many of our biggest defense technologies: fighter jets, guided missiles, and even nuclear submarines.
The Department of Defense (DoD) wants mines on local soil. But getting there isn’t easy.
For decades, America let its rare earths mining sector decay. In the 1970s, we produced a lot of this key hard tech. Today, the output has withered to almost nothing.
The situation is so bad that America’s only rare earths mine – Mountain Pass in California – ships its ores to China for processing. In fact, that “American” mine is partly owned by a Chinese company.
This is far from comfortable in today’s world. Relying on Chinese goodwill to supply the raw materials for our defense systems is a risky bet.
However… starting up new U.S. mines is a slow process. There are a few advanced projects around in Wyoming and Texas. But getting them to commercial production could take years.
That’s why the DoD went a step further this year.
They’re looking beyond America to fund new mines.
The Pentagon is so desperate for hard tech supply, they’re rewriting the book on defense spending.
Hard Tech Mania Will Go Global
This week’s request to Congress is unusual in several ways.
The request uses the Defense Production Act. That’s a Cold War-era piece of legislation. It allows the government to divert funds to industries producing things critical to defense.
Currently, the Act doesn’t allow direct funding to mining. The Pentagon wants to change that, asking that government funds be sent directly into new projects.
Existing laws also say that funds under the Act must be spent in the U.S. or Canada. In the past, the idea was securing supplies of key raw materials close to home.
Defense officials now want to look further afield. They’ve asked Congress to allow spending as far away as Australia. They’d also like to send funds to hard tech suppliers in the U.K.
The distances are far. But officials say these are countries we can trust. They’d rather ship rare earths all the way from Australia than risk supply disruptions from closer, less-friendly nations.
This has some big implications for our hard tech investments.
First, it shows just how desperate things are in metals supply. The Pentagon is basically looking at any options, anywhere on Earth, to bring in new stockpiles.
That obviously bodes well for prices. If a buyer like the U.S. government steps into the market, small commodities sectors could explode upward.
We’ve Profited From This Playbook Before… And We’ll Do It Again
This is great for any company holding mining projects in America (or next door in Canada). These will be prime candidates for government support and premium pricing.
I’ve added several American critical metals stories to all of my portfolios. We’ve seen peak gains of over 1,000% on at least one U.S. rare earths play.
But this week’s news from the Pentagon takes things to another level.
We could now see the mania for hard tech going global. Defense officials signaled they want supply anywhere they can get it.
And they’re willing to pay up.
That means good projects in friendly countries are now all-in plays. That greatly expands our universe of stocks for big gains in hard tech even further.
Keep walking the path,
Editor, Casey Daily Dispatch
P.S. I’m looking for the best picks to benefit from this tidal wave. It’s happening now, and the gains could come extremely quickly.
This is a trend to get in front of. Get all the details on which hard tech will profit, the current state of those markets, and the best ways to invest right here.