4 New Dangers In The Middle East (USO, UGA, UNG)
Martin D. Weiss: Ever since I was born in 1946, the Middle East has been at the core of the most enduring, most vexing, and most economically impactful conflicts on Earth.
The region has generated eight major wars, scores of lesser skirmishes, plus a cascade of political assassinations, acts of terror and revolutions.
It has triggered at least four global economic upheavals.
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It has repeatedly caused chaos in the world’s most advanced industrial nations.
And now, despite one of the most concerted — and frustrating — multinational peace initiatives ever mounted by the global powers, it is about to do it AGAIN!
Israel and Iran are on the brink of an all-out war.
Syria is blowing up.
Russia and the U.S. are closer to taking opposite sides than at any time since the Vietnam War.
The mostly peaceful Arab Spring is now turning into a mostly violent Arab Winter.
And despite it all, international organizations like the UN, the EU and the Arab league are utterly powerless — neutralized by the chronic complexity and growing ferocity of the conflicting forces.
But if you think you’ve seen it all before, think again!
I know. After six decades of on-again-off-again Middle East conflicts, it’s easy to become inured to the steady drone of alarming headlines … the hyperbole of so-called Middle East experts … and the never-ending sable-rattling of the protagonists.
But before you turn a deaf ear, please understand that this time, there are four NEW dangers that have greatly changed the dynamics of the conflict, making the ultimate outcome both less predictable and more impactful:
First, in the past, the conflicts were restricted primarily to battles between each nation’s leadership, with the population largely following along. Now, we have the masses in open rebellion against their leaders.
And it’s not a passing phenomenon. Long before the Arab Spring, I wrote extensively about the popular revolutions in the region that have been percolating for decades — and could continue to escalate for many years to come.
Nor is it strictly a phenomenon of the Arab world. We see similar uprisings bursting to the surface in at least three non-Arab nations — in Iran, Pakistan, and now, just in the last few days, in Afghanistan as well.
Second, in the past, the inevitable wars were restricted to conventional weapons. Now, the dark cloud of a nuclear conflict hangs over the region and pervades the tactical planning of nearly every nation.
Three countries — Israel, Pakistan and India — already have substantial stockpiles of atomic bombs plus, apparently, the capability of delivering their warheads directly to the financial, industrial and political capitals of their likely enemies.
A fourth country, Iran, is barreling ahead with its nuclear weapons development, even at the risk of destroying its global trade and gutting its domestic economy.
In two of these countries, nuclear Pakistan and wannabe-nuclear Iran, domestic politics are powder kegs on the verge of chaos — chronic instability that drives their leaders to take even more extreme measures, both externally and internally.
Third, I need not remind you that the U.S., Europe and Japan are DROWNING in the largest government debts of all time, while, at the same time, more reliant on imported energy than ever before.
This means …
Their economies are more vulnerable to external shocks than during prior Middle East conflicts …
Their leadership has far less tolerance for any country or conflict that may threaten global finances or oil supplies …
And it will be far more difficult for them to stay neutral in any war — to refrain from shipping arms, from providing logistic support or even joining the fray directly.
Fourth, don’t forget China!
During prior Middle East wars, China was not yet a major player on the global scene. It was not a huge energy consumer. And for the most part, it was either absent or neutral when conflict exploded.
Now, all that has changed.
In terms of its energy needs, it’s the global leader.
In terms of its cash reserves, it’s the only financial superpower on the planet.
And, as a result, it has a far greater stake in Middle East energy production, politics and conflicts than during any Arab-Israeli conflict or Gulf war.
China will simply NOT sit quietly on the sidelines as it did before.
The only positive: The cold war seems to be over.
But is it really? It’s too soon to say for sure.
So now do you see why this situation is so unpredictable? Now do you see why it’s so dangerous?
How do we connect the dots from the Middle East to your personal finances?
We don’t have to. Because the energy markets are already doing it for us.
• The U.S. price of crude oil (NYSEArca:USO) has catapulted from a low of $74.95 per barrel last year to $109.84 on Friday.
• The domestic price of gasoline (NYSEArca:UGA) at the pump is at the highest level in history (for this time of year), on its way to $5 per gallon this summer.
• Natural gas prices (NYSEArca:UNG), previously holding steady near the $4 per million BTU level, are now surging.
And guess what! The most impactful eruptions in the Middle East have not even begun.
All the price surges you’ve seen so far are merely reflecting the buying of investors and speculators in ANTICIPATION of possible conflicts.
My recommendation: Don’t get caught flat-footed!
If you take the wrong steps, the events on the immediate horizon will wreck your investment plans. And if you follow the right ones, they could fire up some of the most rapid growth in your wealth in decades.
For instructions on precisely how, be sure not to miss your next Weiss Research newsletter issues.
Good luck and God bless!
Written By Martin D. Weiss From Money And Markets
Money and Markets (MaM)is published by Weiss Research, Inc. and written by Martin D. Weiss along with Nilus Mattive, Claus Vogt, Ron Rowland, Michael Larson and Bryan Rich. To avoid conflicts of interest, Weiss Research and its staff do not hold positions in companies recommended in MaM, nor do we accept any compensation for such recommendations. The comments, graphs, forecasts, and indices published in MaMare based upon data whose accuracy is deemed reliable but not guaranteed. Performance returns cited are derived from our best estimates but must be considered hypothetical in as much as we do not track the actual prices investors pay or receive. Regular contributors and staff include Andrea Baumwald, John Burke, Marci Campbell, Selene Ceballo, Amber Dakar, Maryellen Murphy, Jennifer Newman-Amos, Adam Shafer, Julie Trudeau, Jill Umiker, Leslie Underwood and Michelle Zausnig.
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Mr. Weiss, do you know how tired I am of hearing how things are “different this time,” that there “are new dangers” that require my immediate attention be fixed on the Middle East?
I am like the first foreign solder that ever set foot in the Middle East who, when asked what his first impression was said: “Well, once you get over the over-whelming desire to kill them all things aren’t so bad, really. As long as I know that I get to go home I think I can handle it.”
The Middle East is a place where the over-whelming hatreds and savageries, the consuming compulsions to settle centuries old-scores exists in an environment where nobody can ever go home again.
The first thing the world needs to do is give these poor people a place wherw they can all call home, say in parts of Moscow, Paris, London, New York, Vancouver B.C., Los Angeles. Oh, wait. We have already, and they are still causing trouble.
See my point?
Are you dumb? Look at the chart of UNG and tell the world how that’s “surging.” USO and UNG are terrible, they can go down as oil and nat gas go up. You and your staff no nothing about ETFs, you prove it time and again. I know you won’t respond, but this is irresponsible.