Saigon 2.0?

Taliban Afghanistan

We look across the world at geopolitical hotspots. They’re typically the usual suspects… Iran, North Korea, Hong Kong, Venezuela, Cuba, Central Africa, and Ukraine. But today, we’re looking at a potential catastrophe that mirrors the fall of Saigon in Vietnam so many years ago.

The United States withdrawal from Afghanistan after 20 years on the ground has created a disaster. The Taliban is moving across the country swiftly. Its forces captured two strategic cities in the country today: Heret – the nation’s third largest city. Then Ghazni, a large provincial city that is on the way to the capital of Kabul. 

According to the New York Times, the Biden administration has requested that the Taliban leave the U.S. embassy alone as it moves toward the capital. There are about 4,000 people who work at this embassy. The White House is trying to negotiate that the Taliban will leave the embassy alone. 

I don’t see that happening. History might not repeat itself, but it tends to rhyme. My expectation is that the U.S. government is preparing helicopters to evacuate soon. We might see images similar to the Fall of Saigon on April 30, 1975.

I view the world through the lens of history and repetition. Russia couldn’t win in Afghanistan. The United States couldn’t sustain there either. My expectation is that this is going to become China’s problem now. The two nations share a border, and the Taliban might have something to say about the treatment of Uygher Muslims in East China. 

This is a reminder that war, defense, and military is a trend that will never escape the human condition. It is a reminder that the world can change quickly, and that trillions of dollars spill into the coffers of the military on a constant basis. 

Taliban Causes Geopolitical Tension

As the United States and the rest of the world attempts to emerge from COVID, the Taliban is again on the march. We could see heightened tensions once again across the Middle East soon. And we could see more problems emerge in the region. 

This can create volatility, selloffs, and movements into commodities like gold and other defensive assets. No one should ignore this story. It is part of a larger theme of military and defense spending. The Pentagon asked for $715 BILLION for the 2022 defense budget. 

Total spending on military by all nations hit nearly $2 trillion in 2020, according to SIPRI. So, what do you think is a safe and sound investment?

Defense contractors Lockheed Martin (NYSE:LMT), Raytheon (NYSE:RTX), or Northrop Grumman (NYSE:NOC). If you answered all three, then you read this article. 

This is an industry that has a terrible trend behind it. But if you’re looking to ensure that you’re protected from the world’s uncertainty, there’s no better industry to own for the near-term. We’ll talk more tomorrow about the sub-sector that is really driving spending in this space.

Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.
Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.

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