The Stakes Are Getting Higher

The Weekend Edition is pulled from the daily Stansberry Digest.

And on the 1,000th day, things changed...

Tuesday marked the 1,000th day since the Russian invasion of Ukraine in February 2022... And with it came a new level of escalation in the conflict.

On Monday night, after months of urging, U.S. President Joe Biden authorized Ukraine to use U.S.-made long-range missiles to attack deeper into Russian territory.

The next day, Russia said Ukraine carried out its first strike using six such missiles. Russian President Vladimir Putin responded by updating the country's nuclear doctrine. Russia will now consider aggression by a nonnuclear state (like Ukraine) supported by a nuclear power (the U.S.) a "joint attack" that could warrant a response from Russia using nuclear weapons.

In other words, Putin is now saying the U.S. has effectively attacked Russia – and that a nuclear response is on the table... Will it happen? Nobody knows for sure, but the threat is now in writing, which is different.

At a press conference on Tuesday at the G20 summit in Brazil, Russian Press Secretary Dmitry Peskov told reporters...

You will be able to read the paragraphs yourself, but in general it also states that the Russian Federation reserves the right to use nuclear weapons in the event of aggression with the use of conventional weapons against it or the Republic of Belarus [a Russian ally], which creates a critical threat to sovereignty or territorial integrity.

Other Russian officials evoked the idea of World War III, like one Russian senator who told Russia's state-run news agency that Biden's decision represented "a very big step toward the beginning of the third world war."

Why all this escalation now?...

After all, Ukraine has been asking to use these U.S. weapons (ATACMS missiles, which have a range of about 190 miles) on targets inside Russia for a while. And Putin had telegraphed in September this would be the response should such attacks take place.

Well, CBS News reported on some of the factors on Monday...

Over the weekend, however, the calculus apparently changed. The decision came almost 1,000 days into the full-scale war in Ukraine, and with Mr. Biden about two months away from handing over the White House keys to President-elect Trump, who's seen as far less supportive of Ukraine's ambitions of hanging onto all of its Russian-occupied territory.

It also came as Russia hit Ukraine with a devastating missile attack, highlighting Ukraine's desperate desire for the ability to target Russian weapons systems deeper inside the country before they're launched, which [Ukrainian President Volodymyr Zelenskyy] has stressed for more than a year.

Russia attacked critical Ukrainian energy infrastructure in that most recent attack and reportedly killed 11 civilians. But attacks like that aren't new in this conflict.

What has changed recently, however, is that Russia has enlisted at least 11,000 troops from ally North Korea to fight in the war. More from CBS News...

According to John Sullivan, who served as U.S. Ambassador to Russia under both Trump and Mr. Biden, it may have been that move by Putin – "really solidifying this as a global conflict with troops from North Korea fighting in Europe" – that proved to be "the last straw" for the current U.S. president.

The decision could be the start of an entirely new, higher-stakes environment involving multiple countries more directly... or it could be mostly posturing that doesn't lead to nuclear attacks.

In any case, what happens next is far from certain.

So, throw in the prospect of escalations about the war in Ukraine – and questions about energy, trade, and national security, to put it broadly – into the mix of what investors are considering right now.

The markets were on edge...

As this news broke overnight, futures were down, and volatility spiked somewhat on Tuesday. The CBOE Volatility Index – a measure of options activity on the S&P 500 Index, which some consider the market's "fear gauge" – rose above 16, a jump of more than 4% from Monday.

We've certainly seen bigger one-day spikes before. Still, this move is a sign of what could come should things in Ukraine take further unexpected turns in the days, weeks, or months ahead.

The major U.S. stock indexes opened lower on Tuesday, and bonds rallied in apparent "safe haven" fashion. Our Ten Stock Trader editor Greg Diamond brought up an interesting dynamic...

Now, things get tricky with bonds... Will we see a "flight to safety" if the war escalates, or will inflation reign over the price action?

We shall see. It may end up being a bit of both. It's hard to imagine the war in Ukraine coming to a resolution soon, and the pace of inflation in the U.S. and elsewhere has been picking up in the past few months (as the Federal Reserve seems intent on lowering interest rates).

Gold moved higher on Tuesday, too...

The "chaos hedge" was up 0.8%, recovering from its recent turn lower. The precious metal had reached an all-time high of around $2,785 per ounce in late October before the U.S. presidential election.

Gold has a place in any well-diversified portfolio. And we have several reasons to be bullish on the precious metal.

From a technical perspective, gold remains in a long-term uptrend solidly above its 200-day moving average and is up about 29% year to date.

If history is any indication, this could be just the start of a massive bull run...

Check out this chart, shared on the social platform X by "In Gold We Trust," comparing gold's path this year with the start of its other major runs higher in the 1970s and amid the great financial crisis...

Of course, there's no guarantee of history repeating, and this is a small sample size. But if you're bullish on gold, this should probably get you interested.

And whatever develops in the world of geopolitics, these threats and uncertainty will likely send investors into safe-haven assets... like gold.

All the best,

Corey McLaughlin

Editor's note: While the conflict in Eastern Europe escalates, an unfolding event in the U.S. could soon lead many Americans to financial ruin. Porter Stansberry – founder of Stansberry Research – warns that when it erupts, it will bring dramatic consequences for anyone with money tied up in the U.S. economy.

But with a strategy he learned from his mentor 25 years ago, you can still protect yourself. Porter is sharing the details now... along with the names and ticker symbols of four stocks you should hold to prepare. Learn more here.