by thetimeisgold
The World Bank is warning that oil prices could be pushed into uncharted waters if the conflict in the middle east escalates. (Info here)
They said oil prices could hit $150
If oil prices rise significantly, it could drive inflation higher, which could call for echos of the 1970s.
Nightmare scenario for everyone.
“Gold went from an official price of $35 per ounce before the Nixon Shock to a peak of $850 per ounce in 1980.
During the same period, the stock market remained relatively flat from 1970 to 1980, fluctuating within the 90 to 110 level. This period witnessed substantial volatility, including a notable 50% drawdown from peak to trough between 1973 and 1974.”
If oil prices surge dramatically, it’s important to note that the United States already sold over 40 percent of the Strategic Petroleum Reserve last year to mitigate rising fuel prices. As such, this option might not be readily available again. (Info Here)
My question is this:
If oil prices experience a dramatic surge, which companies or stocks might offer significant leverage to that trend? Additionally, in the event of stagflation, would it be beneficial to diversify into other commodities?
After all, during the 1970s, miners were among the few sectors that delivered solid returns during that stretch.
Thoughts?