Chinese Stealth Fighter

China has unveiled photos of its stealth fighter prototype, which will be operational in about 10 years. Allowing the West to see photos of the prototype is in itself an aggressive move on China's part. China is reverse engineering as best it can America's F-35. The great dragon is rapidly building aircraft carriers, anti-aircraft carrier missiles, stealth fighters, and a host of submarines. All of this is designed to challenge America's military dominance in the Pacific and east Asia.
And China continues to hold the global electronics industry hostage with rare earth mineral export quotas.
The latter point hurts stocks like Ferro Corporation (FOE). But the big picture is that America does not have the luxury of cutting conventional weapon systems and overall military spending.
Today I am getting slaughtered in my FOE position, but my defense stocks (RTN, ITT, HRS) are more than making up for this loss. Not only will the US have to maintain existing great power weapons programs but it will also have to develop new anti- aircraft carrier missiles and cyber-warfare capability. These are two areas where China is ahead of the US.
The American public will be dragged kicking and screaming to the realization that we cannot afford our big social spending programs and will instead have to spend even more on defense. Reality is a bitch.