Sharky:

The reality is that at current interest rates, particlarly in the US, we are significantly below the inflation rate. Such will continue to feed inflation and the value, measured in hard assets, of commodites. At present, Fed Funds rate is 2% and inflation is running 5.25% even using our Federal Reserve measurements. In actuality, using the M3 measurement of inflation reveals a true inflation rate of 16%. Such is over time bound to be a highly inflationary economy which will be positive for all commodites, including oil. $100 TO $120 oil will be only temporary. Ultimately oil will resume its march higher and significantly so as we compound the effects of peak oil with the effect of inflation. Not a pretty macro economic picture.

Brian