Inflation jumped in the UK yesterday to 3.8% on the CPI measure, highest for 16 years. I'm inclined to agree with Simmons on the oil price (he did say 6mths to 5years for $600). Some observations on oil:-

1 A gallon of gas does the same work as a man working 8 hour days for a 5 day week. Using a gallon of gasoline a day to commute to work is like having 5 full time servants on $1 a day. At $600 oil you'd be paying them maybe $5 a day each ... still cheap.

2 In the UK we're paying the equivalent of $10 for a US gallon of diesel and $9 for gasoline. As you're untaxed, oil will have to go over $250 a barrel to give you the same pump prices in the US. I don't see much evidence of demand destruction over here which makes me think the oil price willl have to go above $300, at least, to kill off enough demand to get ahead of the depletion curve.

3 Oil exports are falling faster than world depletion rates (which are 4%+) because oil demand is increasing fastest in oil producing countries where governments subsidise the price and can afford to go on doing so. Add to that the fact that rising demand from China and India is being tied up on long term contracts with producer nations off market and who knows where the price of the shrinking pool of oil on the London and New Yorks markets will go.

What do you think of these 5 year price targets???

gold $6000, silver $400, oil $600, kimber? (will have been taken out by then but at what price?)