The Equidata Investor

America is being held hostage to unstable countries in the Middle East, Latin America, and Africa who control the flow of crude oil. Americans own 27 billion of the world's 700 billion barrels of oil reserves, which is approximately only 3.8% of all of the total reserves.

America imported 5 million barrels of oil a day in 1985. We now use 12 million more barrels of oil than we produce each day.

Saudi Arabia, Iran, Iraq, Kuwait, Oman and the United Arab Emirates rule more than 50% of the world's known oil reserves, and these nations are torn by revolutions, wars and terrorism. The threatened all-out war in the Middle East and the economic decline of oil rich countries are sure to guarantee sharply higher oil prices in the near future, and you can expect the price of gold to follow.

The author has prepared a list of low priced domestic and foreign oil exploration stocks that are listed on the major exchanges in the United States; many under $ 10.00 per share and some for pennies.

We have also prepared a list of low priced oil service group stocks both in the domestic and foreign markets which will profit from a war in the middle east.

Other stock groups to benefit are oil alternative developers, long under priced and overlooked.

The world's most precious metals, Gold Silver, Platinum and Palladium are produced in South Africa and Russia. Together they control 93% of the world's platinum, 90% of the world's palladium and 75% of the world's gold.

They also control 72% of the world's Vanadium reserves, 92% of the world's Manganese and 85% of the world's Chromium. All of the last three metals are vital to the U.S. defense industry and it would be in the best interest of Russia to cut off supplies of these metals to the United States.

South African supply disruption could start as a result of the following:

1. Retaliation against the United States for placing stringent embargos on South African products.

2. Mine closings due to strikes and terrorism.

3. Total Victory by the ANC, the African National Congress, over white South Africa, thereby unwittingly giving all control of their natural resources to Russia.

There are two reasons why gold should be the foundation of any portfolio. One is the limited downside risk and two is the great upside potential.

Owning gold in these uncertain times will put you far ahead of the crowd in the years to come. Owning gold is critical to financial security, it is the ultimate form of financial security because it is cash. Not cash in the form of paper, but cash in the form of money and a prudent investor traditionally goes into cash in times of uncertainty. Gold is money in the form of cold hard cash and is held for safety, is liquid, mobile and retains it's value in normal times. A cache of gold, hidden, will ensure that whatever happens, you will at least retain that amount of value.

The present outstanding billions of dollars held worldwide in relationship to the ounces of gold in the treasury, pegs the price of gold at about 3300 dollars per ounce if dollars were to be redeemed. In 1957, the U.S. had 650 million ounces of gold in the treasury and only $ 200 billion dollars outstanding and the writer sees no plausible reason given today's deficit woes, why this trend will reverse itself.

Gold has made a comeback recently and we think we may again see it selling above $ 1800 dollars per ounce in the near future.

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