You can feasibly make an argument for recession, but then again you can get your head chewed off by those sticking by the two quarters of negative GDP definition.

Recession... Depression... Inflation... the arguments have raged for months. But the only thing many can agree upon is that our economy is slipping into further decay.

Unemployment just spiked to 5.5% for May - the biggest monthly increase since 1986, further proof of a dwindling economy, troubled by job scarcity, and continuing housing, credit and financial issues, coupled with higher energy and food cost on over-stretched paychecks.

The news only served to bolster oil strength, as the dollar weakened.

And, unfortunately, it'll get worse.

We will see $200 oil

Up 28% in five months, and more than 94% in a year, some investors think it may be too late to buy energy.

They may have thought the same at $80, $90, or $100... even $125. But it's the only real way to make money these days. Oil's going higher.

As much as Americans would like to ignore $150 to $200 oil forecasts, growing numbers of forecasters are still sounding the alarm.

Jim Rogers just joined that list, saying the price of crude oil has "years to go" as sources are dwindling. "I know that unless someone discovers a lot of oil, it can go to $150, $200'' a barrel, Rogers said. "The facts are the world is running out of known oil reserves.''

Morgan Stanley says prices could reach $150 in a month, as millions of Americans go on vacation.

Asia demand for oil is soaring.

Workers at Chevron in Nigeria may strike.

The dollar continues to fall.

Israel's transportation minister Shaul Mofaz has announced that Israel will have to attack Iran if it "doesn't abandon its nuclear-development program." That move alone could risk eventual damage to the Strait of Hormuz, resulting in catastrophic oil spikes.

And, according to Chris Nelder's It Takes Two to Contango,"Global demand for oil is still greater than supply, and we believe that it will continue to remain so (with perhaps a few short periods of easing), so we think we'll be dancing the contango for a good long time to come-at least until global demand destruction sets in.

As for the conventional wisdom on the Street, Lehman Brothers and others are convinced that prices are now "anomalous" and that oil is an asset bubble. They believe that global supply will increase faster than expected in the next few years to resolve the tension, and for a while that will probably "talk down" the price of oil.

But I think they're wrong. Non-OPEC supply in particular looks terminally broken to me, and any growth in OPEC supply is dubious, at best. That means you've got a buying opportunity developing here, while the market is underpricing the future of oil."

So how do you profit from it?

You buy domestic oil and alternative energy companies.

Making these companies even more attractive are the oil and gas discoveries and the fact that domestic explorations are more appealing given geopolitical tension.

You know as well as we do that prices would come down sharply if we started producing on our own. And it'd be a strong global signal that we're not willing to be hostages of oil rich companies.

Even the President agrees.

"Our problem in America gets solved when we aggressively go for domestic exploration," Bush said.

Listen, we're not economically pessimistic at Energy and Capital. But we won't put on the rose-colored glasses and tell you everything's fine. Our goal is to profit from the situation, which we've been doing in Energy and Capital, Pure Energy Trader and The $20 Trillion Report.

Good Investing,

Ian L. Cooper
http://www.energyandcapital.com

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In case you missed our other investment opportunity highlights, here's what we covered in Wealth Daily, Gold World, Energy and Capital, and your free blogs for the week of June 2, 2008.

Gold Mining in Brazil: Magellan Minerals Reports Final Brazilian Gold Results
Believe it or not, the Brazilian equivalent to the Dow Jones has skyrocketed 306,622% in the past 15 years alone.

India Benchmark Gold ETF: India Gold ETFs Held 4.57 Tonnes in May
Physical gold held by the exchange-traded funds (ETFs) listed on the National Stock Exchange of India peaked to the highest level ever at 4.57 tonnes during May.

Consumer Confidence Hits 28 Year Low: Inflation Takes its Bite
Here's more news from the consumer front. Consumer confidence has fallen to its lowest point since 1980. Here's the skinny.

Masco Chairman Gets Bullish: You may want to ignore him, though
Lumber and wood producer Masco Corporation (MAS) is seeing its third day of call option buying activity. But don't be so quick to buy.

Energy Efficient Transportation: How Peak Oil is Transforming Air Travel
With new energy efficient technologies being employed almost daily, we see a niche where smart investors can make serious money.

It Takes Two to Contango: Pullback in Oil Is a Buying Opportunity
A few readers have asked about the meaning of a term I used in my last column: "contango." So this week, we'll delve into the murky world of oil futures trading.

Canadian Investments: Canadian Economic Contraction Means Buy Now
It's part of a political tug-o-war that international investors must understand if they want to make money from Canadian investments.

Coal Production: Why There's Further Upside for Coal Stocks
While coal supply is bad for China, it's great news for U.S. coal companies, which are predicting that global coal demand, will outstrip supply by 25 to 35 million metric tons. Coal consumption could rise 74% by 2030. India alone is expecting for its current annual demand of 460 million metric tons to quadruple by 2031. That's great news for coal company earnings potential.

Investing in Nuclear Energy: Cashing in on Cap and Trade: A Nuclear Power Surge
Whether you call it a "cripple and rob" or by its real name, the "cap and trade" legislation currently being debated in Congress does have a certain inertia of inevitability about it.

Insider Buys More... Follow Him.
What's not to like? The Chairman and CEO just bought another 600,000 shares between $52.95 and $54.10, and he's been a steady long-term buyer.

"Energy stocks... The only way a human is going to make any money."

-- Matt Simmons, Peak Oil's first and most vocal proponent,
and founder of the country's last pure play energy investment banking firm.

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...prices would soon come down if we started production oil on our own." meaning ramp up domestic (US) oil production. There's no causal connection whatsoever. Why would a monopolized market let prices fall no matter what amount is available. Demand destruction is going on, for sure, but the big 5 are never going to "flood the market" and drive price down. Capish?

Oil futures went up $5 on 6/5 & $10 on 6/6! Can you tell me why some oil stocks went down?

Did you all catch George Soros testifying before the totally clueless Senate committee on Tuesday??? Soros made the point that producers are keeping their appreciating reserves in the ground, rather than bringing the oil to the surface and selling it for depreciating dollars. The same thing is happening in copper. One copper giant is [1] mining its low-grade ore in its open pit, and [2] drilling selectively at will in its vast concessions to increase its reserves on its books. The CEO says that the producers are selling to the bullish speculators.

Most so-called oil experts/financial advisors have not yet grasped the fact that oil is going up, up, up, at whatever pace it chooses. Whether oil is $150 by July or $100 is immaterial. The long term trend( the next several years) is up and the world, especially Americans will rediscover the economy of 'Made In America' as import prices escalate beyond reach. The disruptions to the economy, the world political scene and standard of living will rock this nation and others as living habits drastically and permanently change.