Baltimore, MD--The world is much closer to an energy crisis than you might think. But with the right positioning, you stand to make a fortune from your energy investments.
One day in October, George Mehales felt a rush of excitement over his latest investments. He had every reason to do so. There was the financial security of his bustling restaurant. George was also ready to reap the benefits offered by the stock market.
By the next morning, he had lost it all.
I'm not talking about a little here or there. I mean everything. His money, possessions and restaurant.
The mass panic of "Black Tuesday" on October 29, 1929, sent investors rushing to the bank. The fear of losing everything made them try and grab whatever savings they could. Nearly three years later, the market bottomed out.
What does this have to do with us?
George had lived through a crisis. And that event triggered what we all know as the Great Depression.
Hard to imagine a crisis of that magnitude happening again, right?
I wouldn't be too quick to say that.
Our crisis is a horse of a different color. Now, I'm not saying the world's energy crisis will come as sharply as the crash on October 29, 1929. But it will be just as severe.
I've gotten some interesting feedback from some of my Energy and Capital readers lately about the effects of an energy crisis. The main questions were generally the same: "Wouldn't the effects of peak oil take years to be felt? This would suggest that we would see a powering-down over time rather than an overnight panic."
I gave them the positive answer first . . .
"I hope." The truth is that we have no way of knowing how people will react.
However, I think history can give us some examples. We know how people reacted to the stock market crashing almost seven decades ago.
Granted, circumstances were different back then. Let's take a look at a more relevant event . . .
During the energy crisis in 1979, the cost of a barrel of oil almost tripled after Iran cut its oil production. Older readers will remember the agonizingly long lines at the gas pump.
But here's the interesting point . . .
Oil prices tripled after a mere 4% production cut!
As our oil supplies become tighter over the next few years, I wouldn't be surprised at all to see similar lines appearing. Instead of rushing to the banks, we'll be scrambling to get to the pumps.
But you don't have to take my word for it.
For the first time in years, some people are starting to get the hint. In the IEA's latest oil market report, they stated that an oil supply crunch could be deferred--but not by that much.
Today, Exxon Mobil's net income in the second quarter experienced a loss of $100 million. I'll keep my opinions to myself, for now. Remember, this is the same oil company that's been laughing at the idea of peak oil, insisting new discoveries and technology would certainly be enough to keep up production . . .
Actually, you can hear it straight from them.
According to their chief equity strategist, Barry James, "We're starting o see a crack in the production side."
One hundred million dollars is a big crack.
Panic or Profit?
Although a multitude of people lost the shirts off their backs in 1929, you also need to realize that there was a group that made huge fortunes. They were in the right position to take advantage of the crash.
No matter how devastating this energy crisis turns out to be, it will present you with the investment chance of a lifetime.
I'd like to invite you to see for yourself, though. On September 13-16, 2007, you can join me at our conference 2007 Angel Research "Profit from the Peak" Summit in Philadelphia. But there are only a few days left before discounted rates are closed, so if you're interested, visit here now. I look forward to hearing from you personally.
Until next time,
Keith Kohl
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