Why America and Russia Are Racing to Expand Their Nuclear Arsenals

America and Russia are in an arms race to upgrade their respective nuclear arsenals.

Both world powers are reversing decades of non-proliferation efforts in order to stay one step ahead of each other. Since Moscow began stockpiling warheads in earnest last year, Washington has been readdressing its own cache of nuclear arms.

Now, the public finally has a look - albeit an unintended look - at what the Trump White House has in store to counter the Kremlin's atomic upgrades.

Here's how Washington's nuclear arsenal stacks up against Moscow's - and how you can prepare financially as the two superpowers threaten a second Cold War...

America and Russia Return to Their Cold War Behaviors

Just last Friday, a leaked White House proposal entitled "The Nuclear Posture Review" made headlines, detailing potential plans for increased nuclear armament.

The proposal has been a long time coming.

On Dec. 22, 2016, Russian President Vladimir Putin claimed that Russia must strengthen its nuclear arms in order to handle "any global threats," The Hill reported that day.

Then, on Feb. 14, 2017, Moscow secretly deployed a new cruise missile that American officials said broke a 1987 treaty - the Intermediate-Range Nuclear Forces Treaty - which banned American and Russian intermediate-range missiles based on land.

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In response to the Kremlin's rule-breaking last February, U.S. President Donald Trump's administration stated that it would begin reviewing its nuclear policy. On Oct. 11, the president said he wanted the United States to boost its active stockpile to 1960s levels (to roughly 32,000 nukes from the current 4,000 - an eightfold increase). This was reportedly after Trump was shown a chart of the U.S. nuclear arsenal compared to that of Russia.

This chart below shows America and Russia's nuclear weapons caches.

America and Russia

"The Nuclear Posture Review" now provides more shape to President Trump's potential plans...
Specifically, the document notes that Russia and China are modernizing their nuclear arsenals, while North Korea's nuclear provocations "threaten regional and global peace." Therefore, the report claims, the United States must consider expanding its nuclear capabilities at the same time.

One way to do so, the document proposes, is by modifying a small number of existing submarine-launched ballistic missile warheads to provide a nuclear option with a lower payload.

But arguably the most dangerous upgrade posited in the leaked file concerns a particular atomic weapon not used since the Second World War.

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Trump White House Pushes for More "Flexible," "Low-Yield" Nukes

The United States is considering expanding its arsenal of nuclear weapons to include those that are easier to deploy and more accurate.

The document cites the advances in Russia's battlefield-ready nuclear arms and proposes reversing the Obama-era position of not making similar "low-yield" and "flexible" nuclear weapons to match them.

"To be clear, this is not intended to, nor does it enable, 'nuclear war-fighting.' Expanding flexible U.S. nuclear options now, to include low-yield options, is important for the preservation of credible deterrence against regional aggression," the proposal states.

But "low-yield" is a misnomer: This kind of nuclear weapon rivals the atomic bombs the United States dropped on Japan in 1945, each of which led to about 100,000 casualties. They're easier to deploy and more accurate with targeting.

America Russia
A post-war model of "Little Boy" - the atomic bomb exploded over Hiroshima, Japan, in World War II.

Right now, hundreds of U.S. nuclear weapons are already primed for use at a moment's notice, as are Russia's.

This dangerous return to Cold War-era policy means such weapons can be launched within a few minutes of detecting an adversary's preemptive nuclear strike. And given Hawaii's recent false alarm, the likelihood that this powder keg's fuse will one day be lit seems higher than ever.

Now, should this arms race one day come to a head, Americans won't have the time - nor the interest - to worry about their future finances.

But barring that nightmare scenario, there is a way to play the current nuclear arms race for unprecedented potential gains. That's because the fear surrounding the Trump-Putin arms race has sent investor confidence in the security and supremacy of the United States spiraling.

Editor's Note: Don't miss a single update on Trump and Putin's hot-cold geopolitical relationship, especially when it comes to U.S. defense. Get real-time alerts sent to your inbox, completely free, here.

The U.S. Dollar Index, which compares the dollar to a basket of six major currencies, is down to 90.36, a three-year low. And the U.S. 10-year Treasury yield, which moves inversely with investor confidence in the U.S. Treasury, is at 2.55%, a 10-month high.

These factors have sent safe-haven investments - gold chief among them - skyward. In fact, in the past two months, gold has jumped from $1,249 an ounce to $1,340 and is quickly approaching a four-year high.

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