How High Can Crude Oil Price Go?

Over the past one year or so, we have seen the price of crude oil shooting off the roof, from a mere $25 to the record high $123 per tonne! Have you ever thought the possibility of crude oil prices to Hit $200? What sort of impact will this have on global inflation? As so many essential items are linked to crude oil, we can imagine the potential crisis that could emerge from this unthinkable event? Too far fetch, you think?

Well, Goldman Sachs, the famous global investment banker, has predicted that the price of crude oil will hit $200 as early as by the end of 2008! Yes, you hear it right, this is the same folks who predicted that the price would hit $100 a year ago!!

Already many countries are experiencing high inflation, and in some countries, food crisis could become a real threat too!

Inflation certainly reduces one's purchasing power with every dollar...so whatever retirement savings you have today most likely will erode further in its value and as such, questions will be asked how long can these money survive? Some research indicates that retirement savings fund tend to vanquish within 3 years after retirement....it is a startling statistic indeed!

What's the solution? Simple, you have to make sure that your funds grow at a rate significantly greater than the inflation rate, so that your real purchasing power will not erode over time. Putting the money in the safest form of cash instruments such as Fixed Deposit simply won't work! In simple terms, one has to learn how to take some calculated risk and invest your money wisely. I really think there is no other way unless you run some form of business that generates tonnes of money every year!

One of the safest asset class for investment is GOLD. Gold prices have in fact risen in tandem with the rise in crude oil, as people generally perceive gold as one of the most defensive form of investment and a safe heaven. Like all investments and commodities, the price of gold is ultimately driven by supply and demand.

Let's look at how well Gold has performed over the past 5 years...


Simply Astonishing!

Looks like I will hold on to my gold investment for some time to come, perhaps with the intention to increase my portfolio too!

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