Nikita Khrushchev called it the “grapefruit satellite.”
It was a bitter statement…
The launch of Vanguard 1 in March 1958 meant that the Soviet Union’s dominance in space was over.
Over the next couple of decades, the Cold War rivalry would result in countless conflicts, military crises, and a nuclear arms race.
It would also spur a technological revolution leading to the creation of GPS, artificial limbs, and memory foam.
The U.S. government, intent on gaining the upper hand, would award companies like Lockheed, Boeing, and Northrop billions of dollars in military contracts. The values of these companies skyrocketed.
It was the golden age of aerospace and defense investing.
The 21st Century Space Race
In 2019, we find ourselves in the same situation, though the face of the enemy has changed.
The current China-U.S. trade dispute is in all the news, but the rift between the two superpowers is not new.
It began 12 years ago when Beijing conducted its first anti-satellite missile test.
On Jan. 11, 2007, the Xichang Spaceport authorities launched a multistage rocket carrying a kinetic kill vehicle. Traveling at 5 miles per second, it hit the FY-1C weather satellite head on… and obliterated it in an instant.
The message was clear. Whatever you have up there, we can destroy it.
The international community condemned the test, but Beijing didn’t care. They had exposed the U.S. military’s greatest weakness.
Satellites represent a vital operational element for the U.S. armed forces. They rely on them for military positioning, weapon systems, and surveillance.
And there is no way to protect them.
Nor are they easily replaced. Putting satellites into orbit is difficult and expensive.
Of course, Washington could retaliate, destroy the Chinese space assets, and pursue mutually assured destruction. But the cost to the United States would be far greater than the cost to anyone else. Nobody has as many satellites in space as the United States.
When you understand how fragile space assets are, Trump’s Space Force begins to make sense.
Trump Signs Space Policy Directive 4—But What Does That Mean?
During the Second World War, the Air Force was part of the Army.
However, the Army quickly realized that waging war in the air is different from waging it on land. You need different types of soldiers and different tactics, and you’re fighting in a different theater of operations.
So, in 1947, President Truman announced a separate military branch, the U.S. Air Force.
If there is ever a war in space, the U.S. military will find itself in a similar situation.
Operating in zero-gravity with no atmosphere and solar radiation, current fighting equipment, training, and tactics would become irrelevant.
Last Tuesday was a crucial moment in the new space race. Making good on his promise, President Trump signed Space Policy Directive 4.
The legislative initiative plans to usher in a U.S. Space Force as soon as 2020.
Its primary role will be expanding U.S. military capabilities in Earth’s orbit, including GPS systems, geo-surveillance, and missile launch sensors.
To do that, the military will have to implement new technologies. First estimates show that the Space Force will cost $13 billion in the first five years alone.
With limited research and development capabilities, I expect the government will look for solutions in the private sector.
If the last space race took decades to play out. How long for the current contest? China’s economic power far surpasses that of the Soviet Union.
Meaning the potential offered by space companies today is even greater than it was at the outset of the Cold War.
Space Economy—The Other Side Of The Coin
The other reason I’m so bullish on the aerospace industry is because of its potential beyond military uses.
Space is already a $400-billion-a-year industry… 80% of which is private revenues. Over the next two decades, projections show that number increasing to $1.75 trillion.
And now an even bigger demand is emerging… the internet.
In the short- to medium-term, 55% of the value added to the space economy will be a result of expanding internet bandwidth worldwide, especially to under- and unserved parts of the globe.
These regions represent untapped potential for companies that rely on social media, online advertising, and e-commerce… and they’re willing to pay a lot to be able to access it.
I believe that the space economy will be the next big investment bubble… and that the time to take a position is right now.
I’ve identified a company that offers space solutions, including internet service, to both the government and the public.
I talk about it in “This Stock Is Set To Skyrocket From The New 21st Century Space Wars,” a special report available to subscribers of my True Retirement Wealth.