Are You Buying the Wrong Gold?

With all eyes on gold, it’s time to buy OIL
The freakish dip in oil prices we’re seeing right now may be one of your last opportunities to buy into all manner of oil-based investments at bargain prices.

As I’m sure you already know, this dip is not being caused by any increase in crude production — or a forecasted decline in demand for oil…

In fact, the IEA predicts that 2010 will sharply reverse two straight years of declining world oil consumption to break 2007’s record of 86.5 million BPD.

Rather, the tumbling oil prices of the last few weeks are due to a U.S. dollar that’s suddenly — and, many experts believe, temporarily — stronger in comparison to the debt-strained euro, the world’s largest currency in circulation.

Just yesterday, Bloomberg’s BusinessWeek confirmed this: Crude oil tumbled to a 12-week low in New York as the strengthening dollar curbed the appeal of commodities as an alternative investment.

Oil is priced in dollars. And all other factors being equal, when the buck spikes, oil dips.

Simple as that.

Right now is one of those rare anomalies (read: window of incredible opportunity) when extreme events briefly disrupt the two-part scenario almost all credible analysts foresee:

1) World oil demand soars, while conventional crude production falls (See: Peak Oil).

2) The dollar declines as the U.S. government prints and spends ever more of them on things that do nothing the restore America’s engine of economic greatness: industry.

These factors translate into only one thing: A sustained boom in oil prices such that the world has never seen.

Morgan Stanley calls for oil to potentially touch $120 in 2011…

B of A/Merrill Lynch sees oil bouncing back to $105 this year…

Barclays more conservatively predicts $100 oil by the end of 2010…

And all of these venerated experts see oil hitting $135-$150 by 2012-2015.

So it’s easy to see how today’s low-$70s crude price is a freakishly favorable window of opportunity to get in on well-chosen oil investments…

Wealth Daily