North Korea's Astounding Strides in Missile Technology Come from a Shocking Source

North Korea's rapid development of missile technology comes from an unexpected source...

The Ukraine.

Evidence of this connection was first revealed on Aug. 14 in a report by the International Institute for Strategic Studies (IISS).

The IISS report claimed that Pyongyang's recent success with intercontinental ballistic missiles (ICBMs) was facilitated by black market purchases of foreign rocket engines and intellectual property.

And evidence to further support the IISS' claim surfaced just this week...

North Korean Media Let Slip the Country's Latest Rocket Designs

On Tuesday, North Korean state media released images of dictator Kim Jong Un with what looked like cutting-edge rocket engine designs hung on the walls around him.

Indeed, the isolated regime has made leaps and bounds in its missile and rocket engine technology in recent months, dating back to August 2016 in particular...

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That's when Pyongyang launched a Pukkuksong-1 missile from a submarine capable of striking the United States.

North KoreaThen, just this past July, the regime successfully carried out two ICBM tests.

In all, North Korea has executed 14 missile tests this year - only three of which failed. And of the 11 successful tests, three contained never-before-seen rocket engine technology.

To experts, these advancements, made in such a short time, imply the work of foreign intelligence.

Chiefly, Ukrainian foreign intelligence.

Here's how they figured that out...

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Only One of Two Manufacturers Could Have Supplied North Korea

Michael Elleman, a missile expert and author of the Aug. 14 IISS study, told NPR that same day the North Koreans were almost certainly using a modified version of a Russian-designed missile engine that is only available from two sites:

  1. The Energomash concern in Russia
  2. The KB Yuzhnoye design bureau in the Ukraine

That latter site is the more likely culprit, as far as Elleman and his colleagues are concerned.

You see, Russia announced that it was no longer interested in buying Ukrainian rocket boosters back in February 2015. The move worsened problems for the already struggling Yuzhmash factory. Employees' salaries were already in arrears at the time. And they soon began working just one day a week to avoid joining the 13% of Ukrainians who were fully unemployed at the time.

Pressure for the plant's employees to find other ways to profit made them potential targets for North Korean operatives to exploit.

The IISS report stated that "a small team of disgruntled employees or underpaid guards at any one of the storage sites, and with access to the [engines], could be enticed to steal a few dozen engines by one of the many illicit arms dealers, criminal networks, or transnational smugglers operating in the former Soviet Union."

And while North Korea could ostensibly have gotten rocket engine technology from Yuzhmash's sister plant in Russia - Energomash - there's no reason Putin's government would be willing to part with its own aging supply.

That leaves Yuzhmash looking all the more guilty. While it remains unknown who smuggled Yuzhmash's rocket engine designs to Pyongyang, the "how" is clear...

North Korea's New Rockets Are Far More Mobile Than Before

"The engines (less than two meters tall and one meter wide) can be flown or, more likely, transported by train through Russia to North Korea," Elleman said.

He pointed out that North Korea seems to be using RD-250 engines in particular. Designed in the 70s during the Cold War era, RD-250s are liquid-fuel propellant rockets that rely on oxygen and hydrogen for operation.

They are far more mobile devices than their larger, solid-fuel rocket engine counterparts.

Russia actually used RD-250s for decades, but decided to transition away from them because they're extremely toxic and difficult to work with.

Ukraine, on the other hand, continued producing them.

Now, North Korea could have obtained RD-250 designs after the Soviet Union's collapse in 1989.

Elleman, however, doesn't buy this. He thinks they were purchased from the Ukraine by North Korea sometime last year, which explains why the United States is just now seeing advancements and not a couple decades ago, in the more immediate years following the fall of the USSR.

And not only do we know North Korea has obtained these rockets by illicit means, but they likely had - and still have - foreign workers helping them...

North Korea's Getting Outside Help

North Korea's RD-250 rockets have also been skillfully modified and updated, Elleman said. This indicates foreign engineers' involvement in the regime's weapons development.

"We know the modified version, which we've seen on the North Korean missiles, that has actually been seen in Ukraine," Elleman said. "It doesn't mean that it doesn't exist in Russia, it's just that we've seen it there - so that's the most likely source."

Since the Aug. 14 IISS report was released, Yuzhmash has vehemently denied the claims.

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In an Aug. 15 rebuttal statement, the factory said, "The facts, which are stated in the publication, do not correspond to reality. In particular, Yuzhmash not only is not the main producer of missiles for the Russian Federation, but does not supply missiles, their parts and assembly units, including rocket engines."

Whether Yuzhmash is guilty or not remains to be determined, but one thing is for sure: North Korea is aggressively pursuing advanced weapons technology.

And that means the United States - the Pentagon in particular - needs to create and maintain a "missile shield" in order to protect America.

We're talking about missile-interceptor systems.

And one company will be a windfall beneficiary of the Pentagon's ongoing endeavors...

U.S. Rocket Manufacturer to the Rescue

Right now, there are two missile-interceptor systems that have been deployed.

The first is THAAD, which was successfully tested for the second time in mid-July.

THAAD has been deployed to Guam, to South Korea, and in the mainland United States. It's designed to take on intermediate-range missiles.

Then there's a system known as the Ground-Based Midcourse Defense System (GMD) - a more sophisticated setup that targets intercontinental missiles. That missile interceptor, too, recently recorded a successful test.

Aerojet Rocketdyne Holdings Inc. (NYSE: AJRD) is the rocket engine venture that is a key supplier to both the THAAD and the GMD programs.

Aerojet is a longtime favorite of Money Morning Executive Editor Bill Patalon.

In fact, he's already doubled money for his Private Briefing subscribers on the pick. (Bill first recommended the rocket engine venture as a "buy" in 2013 - under its former name GenCorp Inc. - long before this Pyongyang mess hit the headlines.) In 2017 alone, AJRD has seen a 57% share price increase.

Currently, Aerojet is working to deliver 52 THAAD interceptors to the U.S. Army between October of this year and September of next year.

And as the North Korean threat escalates, those numbers will rise.

Plus, with an increasingly militant China serving as a possible new trigger for conflict in the East, Aerojet - as well as other defense stocks Bill's recommended - are headed higher, still.

Get in on these profit plays yourself right here.

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