A new East-West cold war is quickly emerging, just as Larry Edelson has warned …
Crimea has voted to break away from the Ukraine!
Putin has announced his decision to annex the peninsula into the Russian Federation!
And for the first time since the Cold War, we are witnessing the transfer of critical turf from one major country to another!
So to help put all this in perspective, I just gave Larry a call; and the points that came out of our conversation were so timely — so critical to your next decisions — I decided to give you a quick summary right away this morning.
Larry began by recapping events of the last 48 hours …
Larry: The vote in Crimea was historic — almost 97% in favor of secession, creating shock waves in the government of every country that fears of secessionist movements of their own. This rising cycle of war is precisely the kind of thing I’ve been warning about. It’s happening. And it’s about to happen in a bigger way.
But the vote on Sunday was already widely expected by investors.
That’s one of the reasons why we’ve seen a typical market pattern in recent trading sessions — “sell on the fear, buy on the bad news.” And sure enough, yesterday, the Dow surged on the bad news — up 181 points to 16,247.
Martin: What if this continues?
Larry: If it continues, and the Dow can give us a weekly close above 16,650, it could be headed for 18,000-19,000. If not, I still think a market correction is in order, especially in Europe.
Martin: Based on …?
Larry: Based purely on technical indicators. As you know, for short-term market timing, I rely on them heavily.
As I’ve said repeatedly, though, my long-term fundamental view is unchanged: The rising tide of war — whether cold or hot — will drive global flight capital to the United States, which, in turn, will be one of the factors that helps drive the Dow to 31,000.
Martin: You say Europe is more vulnerable. Is that because of the Ukraine crisis?
Larry: Not entirely. Yes, Europe is far more vulnerable to what happens with Russia than the United States — Europe has more trade with Russia, especially in energy. But as I’ve written many times before, Europe and the euro were fragile long before the crisis in the Ukraine began.
Martin: I agree with you about the cycles of war and the threat to Europe. Plus, no one can deny the continuing concern about a correction. This is why my family and I have a lot of our money still in cash. And it’s why we invest in stocks with the highest Weiss Stock Ratings. In our approach to the market, we feel that quality trumps market timing.
Larry: I think you can do both — pick the best quality AND time the market. But it’s true that market timing can be trickier.
Martin: Larry, this coming weekend, let’s talk again. And let’s focus on some bigger questions that are on my mind, and, I presume, on the minds of many of our readers as well.
Larry: For example?
Martin: I want to pose some very serious and urgent questions for investors:
What’s the next likely phase in the new cold war?
Is America still doomed to a major failure down the road?
What could save America from that fate?
How can you build your wealth in the meantime?
Larry: Sounds good. Let’s talk again Sunday. I assume it’s OK if I share that conversation with our readers in my Money and Markets edition Monday morning?
Martin: Be my guest! It could turn out to be one of your best.