A Shift In US Procurement Spending Patterns Creates Immense Opportunities

Peter Tchir introduces "ProSec" (Production for Security) as a key concept, emphasizing its potential to influence government and corporate decisions. He highlights South and Central America as a region of focus, signaling a shift in US foreign policy and a renewed effort to counter China's influence. Tchir suggests a shift towards a more aggressive "war on drugs," particularly targeting Mexican cartels, with potential for new strategies. He anticipates streamlining military procurement processes to enhance technological advancements and address resource deficiencies. The author underscores the critical need for increased electricity production to support AI and data centers, viewing it as a national security imperative. He notes China's leadership in energy development, advocating for diverse energy sources, including nuclear, solar, and fusion power. This energy demand will likely foster stronger alliances and drive foreign policy, especially with countries in Africa. Tchir forecasts a decrease in Fed funds to 2.875% or 3.125% and a drop in 10-year bond yields below 4%. While acknowledging some credit market issues, he believes the overall credit performance remains solid.