Beware of the Pivotal Role of Oil

The Leebs arm readers with an investment strategy to survive, what they see, as the coming energy crisis.

Energy is crucial to the world’ economy. The Leebs believe we are transitioning away from reliance on oil and gas as our primary energy sources. As supplies dwindle, the price is experiencing an upside breakout, which will place inflationary pressures on the economy in conjunction with deflationary threats.

The Leebs predict the dwindling energy supplies will cause oil price will rise to $100 a barrel by the end of this decade, if not sooner. They observe that oil prices are the single most reliable predictor of stock market performance. That is why they urge investors to alternate between inflation and deflation positions using their “amazing oil indicator.”

Generally, I am skeptical of simplistic investment approaches. In my experience these indicators work only for investors whom I charitably call “donators.” Donators are a necessary market group, but I do not generally want to join. In this case, however, I agree with the underlying thesis. Energy is a non-renewable resource to which the world’s economy is hopelessly addicted. As the world transitions, there will be disruptions. I doubt they will take the form of a short-term, neat, predictable package. ( )