A Real-Time Gauge of the WWIII Arms Race

For years now, I’ve been saying that WWIII isn’t coming…

It’s already here.

Just take a look around.

Russia is already invading Eastern Europe.

It’s only a matter of time before China feels like it has enough juice to finally invade Taiwan — even if it means overwhelming U.S. forces in the Pacific.

Israel has obliterated whatever hope Palestinians ever had for a two-state solution.

Iran and its proxy groups are lashing out in response, further exacerbating the chaos, death, and turmoil.

And everywhere you look, defense spending is soaring.

Global military spending surged 9.4% in 2024, to $2.718 trillion, according to Stockholm International Peace Research Institute (SIPRI).

That’s the highest figure ever recorded and the biggest increase since 1988 (the year before the Berlin Wall fell).

Yes, it’s an arms race. But what you have to keep in mind is that it’s not been undertaken for some future war that may or may not be fought. It’s been undertaken for a war that is already underway.

And the war that we’ve all feared most for decades — an all-out war between the United States and China — is the main event.

Together, the United States and China accounted for roughly half of the world’s military spending in 2024.

If you’re even casually familiar with America’s budget, you know our defense budget is jaw-droppingly high.

And it’s headed even higher.

Just last week, the House Armed Services Committee approved a $150 billion increase in defense spending that would push the Pentagon’s budget beyond $1 trillion in FY2025.

The budget includes:

• $33.7 billion for shipbuilding
• $20.4 billion for munitions
• $13.5 billion for innovation
• $12.9 billion for nuclear deterrence
• $11.5 billion for military readiness
• $11.1 billion for Pacific deterrence
• $7.2 billion for aircraft
• $5 billion for border security
• $4.5 billion for the B-21 bomber
• And $2 billion for military intelligence

It’s practically an open fire hydrant.

Yet it’s still justifiable because the world is kind of on fire right now — and the conflicts underway are scarily close to blazing out of control.

Again, China is a big reason why.

China raised its defense spending by 7% in 2024, according to SIPRI.

That marked the 30th consecutive year-over-year rise in spending for Beijing — the longest unbroken streak on record.

China’s ever-rising defense budget is a big reason why the country has been able to advance and expand its capabilities in hypersonics, drones, shipbuilding, space, stealth aircraft, and nuclear weapons.

NATO Secretary General Mark Rutte even warned about China’s advances in a recent visit to the Japanese naval port of Yokosuka.

“China is supporting Russia's efforts,” Rutte said. “China is building up its armed forces, including its navy, at a rapid pace. We cannot be naive, and we really have to work together, assess what is happening.”

And indeed, China’s military buildup has spurred a commensurate rise in defense spending throughout the region.

Japan’s military budget rose 21% in 2024 — its largest increase since 1952.

The Philippines, which has been facing off with Chinese forces in the South China Sea, increased its defense spending 19%.

South Korea increased spending by 1.4% last year, but it also has one of the largest proportional levels of spending in the Pacific at 2.6% of GDP. (By comparison Japan’s defense spending is still just 1.4% of its GDP.)

Taiwan increased its defense budget by only 1.8% last year, which again sounds small until you realize the besieged island has increased its total defense spend by 48% since 2015.

India — another country that’s locked into territorial disputes with China — has the world’s fifth-largest defense budget. It increased its defense spend by 1.6% last year and 42% in the past decade.

Hence this sober warning from Nan Tian, director of the SIPRI Military Expenditure and Arms Production Program:

“With several unresolved disputes and mounting tensions, these investments risk sending the region into a dangerous arms-race spiral.”

Swinging back to the other side of the world, Russia’s invasion of Ukraine has had the same effect on Europe.

Russia itself raised defense spending by 38% last year — probably more, in fact. It’s the only thing propping up its economy at this point.

Europe is responding.

Germany, which has the world’s fourth-largest defense budget, upped its spending by 28%. France increased its defense budget by 6.1% and the United Kingdom boosted its budget by 2.8%.

Sweden — NATO’s newest member — increased its military expenditure by 34%.

Other major European defense spend increases included:

• Romania — 43%
• The Netherlands — 35%
• Sweden — 34%
• Czechia — 32%
• Poland — 31%
• Denmark — 20%
• Norway — 17%
• Finland — 16%
• Turkey — 12%
• And Greece — 11%

At the end of the day, every European country outside of Malta expanded their defense budgets, pushing the continent’s arms spending beyond Cold War levels.

And finally, defense budgets in the Middle East jumped 15%, to $243 billion.

That growth was led by Israel, which increased its defense spend by a whopping 65%.

The bottom line is that these numbers aren’t just numbers.

They’re a real-time measure of a global arms race that is only going to end one way.

Disaster — depending, of course, on who comes out on top.

This is why I’m such an ardent supporter of defense stocks like Lockheed Martin (NYSE: LMT), Northrop Grumman (NYSE: NOC), and RTX (NYSE: RTX.)

However if you really want to profit from defense — and find out about the most advanced, cutting-edge defense technologies, and the companies behind them, check out my latest report for Secret Stock Files here.

It details President Trump’s plan to channel defense spending to a select few companies that will lead the way in 21st-century warfare.

This is Donald Trump’s "AI Victory Plan."