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  • Value vs. Price: Trade in Your Gold for Oil and Agriculture Futures [View article]
    Jake,

    I agree with your observations; oil is cheap now and gold is expensive.
    Historically, the oil to gold ratio has been around 12-15 bls/oz. Oil is the place to invest and has many advantages over gold as an investment vehicle.

    1) Most people can live without gold, very few can live without oil. Besides transportation, oil is used to make thousands of different products.

    2) Oil and gas Canroys or MLPs are good place to invest. Gold does not pay interest or dividends, Canroys/ MLPs continue to pay good dividends (anywhere from 5% to 15%) despite the new low price of crude oil. After we get out of current economic malaise, oil demand will resume and Canroys/MLP will enjoy good capital gains as well.

    3) Realistically, we won't any serious transition to alternative energy for the next 30 to 40 yrs. So oil will only become more valuable for the next 10-20 yrs at least.
    Dec 22 11:05 am |Rating: +2 -2 |Link to Comment
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