In 1973, then President Richard Nixon and his administration made the correct call of decoupling the US dollar from gold, thereby changing the world of finance forever.
Now, while I agree breaking from the Gold Standard was the right move at that time (Thanks, France)…
The fact that there was nothing physical, no commodity or good, backing the
US dollar has made things a little shaky over the past 40-something years.
Now, the dollar is backed by “the full faith and credit” of the US government, it makes things a little bit difficult…
Especially when it comes to the value of goods.
However, we’re not here to talk about the value of money…
We’re here to talk about the value of one of the world’s biggest and most widely used commodities – oil.
The price of oil has been whacky lately…
And it’s wreaking a fair amount of havoc throughout the rest of the markets.
The price of oil and its volatility heavily impacts the economics of not only the US, but can levy a hefty toll on the global economy…
Especially when you keep in mind the fact that there isn’t an industry in which oil doesn’t play some role in – and that’s not just here in the US – but throughout the world.
At least, that is, for now.
While, globally, we’re just starting to see and understand the potential of renewable energy sources – the fact is we’re not ready to depend solely on them.
So oil is still king – which means when things start going wonky – the world starts getting a little nervous.
The price of crude oil has been pretty volatile over the past year…
Looking back, you can see the price between some of the big dogs has swung from as low as $43 to as high as $54 – which may not sound like a lot – but we’ve definitely felt that difference at the pump.
Even these prices are a far cry from where they were about 10 years ago when oil was routinely priced above $120 per barrel…
But since prices bottomed out in 2016 – the price of US crude oil has started rebounding steadily.
But then…
Major oil refineries in the Gulf of Mexico were damaged by Hurricane Harvey…
The threat of war with the crackpot that runs North Korea…
And the need to send aid and supplies to Houston and California has brought about a bit of a shortage of Texas Tea in the US, which could send prices up even higher.
Spikes in the price of oil can stifle economic growth (both foreign and domestic) because as we’ve already discussed, a number of industries, including transportation, farming, airline, chemicals and many more, are directly (or indirectly) influenced by the price of oil and its volatility.
Oil to fuel power…
Oil to transport…
Oil to manufacture chemicals…
There just isn’t a major industry in which oil doesn’t play some factor.
With that said, is now the perfect time to get into oil?
Maybe…
What I’m more excited about is the fact that it may be a better time to get into some of these other industries as certain companies may experience a dip in share price due to how much money they have to pay out.
Could now be a good time to get into some agricultural stocks like Monsanto (MON)? Maybe…
Could it be a good time to sell machinery stocks like Caterpillar (CAT)? Maybe…
Could it be a GREAT time to get into biofuels? Maybe!
When coming up with my GorillaTrades recommendations – I always like to keep an eye on what Black Gold is doing…
That being said, there are two stocks I have my eye on that could do something big – regardless of the direction oil takes over the next few weeks.
When it’s ready, I’ll be sure to push the chosen pick out to my GTsubscribers ASAP!
Now, again, I’d love to have you receive this recommendation yourself – that way you can see the power of the GorillaTrades system at work… (We always offer a free 30-day trial, with no credit card required.)
However, I get how some people only trust what they know or are too resistant to allowing modern technology to do the work for them – and if that’s where you fall – I totally understand you wanting to do the extra work for yourself.
Either way…
Do yourself a favor and watch what happens with oil over the next few weeks – doing so could help you figure out some interesting places where you could make money.
That’s what I plan on doing…
“The stars, that nature hung in heaven, and filled their lamps with everlasting oil, give due light to the misled and lonely traveller.” – John Milton
