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4 New Dangers In The Middle East (USO, UGA, UNG)

February 28th, 2012

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.


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.

This investment news is brought to you by Money and Markets. Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com/.


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  1. March 1st, 2012 at 14:17 | #1

    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?

  2. Randy Watson
    February 28th, 2012 at 14:11 | #2

    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.

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