Today's comment is by Eric Roseman, Investment Director and editor of Commodity Trend Alert.

Every single day, the world's population uses more oil than the planet can possibly produce. This means the peak oil theory is still alive and well.

Poor Correlation on the Way Up

The majority of energy stocks have struggled this year as oil prices raced to a record high of US $147 a barrel. Stocks simply couldn't rally as the bear market in global stocks applied downward pressure on the entire complex.

Oil futures tell a completely different story. While major U.S. and international oil companies rose only 3.5% from January 1 to July 11, oil futures rose an astounding 63%. Over the same period, the S&P 500 Index tanked more than 10%.

Admittedly, the recent peak in oil prices was extreme and indicated a short-term "bubble."

Commodities have been the prime beneficiaries of the global institutional boom. Industry players have already created a flurry of exchange traded funds to take advantage of this commodity bull market.

Also, hedge funds have turned to commodities to gain exposure to one of the few remaining profitable segments of the market. In fact, hedge funds' "big trade" over the last 12 months has been riding the wave in commodities, including oil and shorting or betting against financial stocks. That trade violently reversed last month.

Bear Market or Correction?

From its high in early July the benchmark Reuters-CRB Index has declined 19% while crude oil prices have tanked 23%. Other commodities have declined even more.

Oil stocks, as measured by the Spiders XLE Index (XLE) are down 22.5% from their highs while the Dow Jones Oil Equipment and Services Index is off 21% from its best level.

Commodities, including oil, are in a correction. But don't be mistaken: We're definitely not at the cusp of a bear market for oil or commodities.

The market is right to discount a slowing global economy this year as credit problems and stagflation spread to overseas economies. It's wrong to assume that the bull market in oil and most other commodities is over. Short-term cash rates still below the rate of inflation and global money-supply is still growing in excess of almost 20% year over year, according to Grant's Interest Rate Observer.

In its fight to control deflation in housing and bank credit, the Federal Reserve will continue to pump the financial system with more money. Massive government bailouts don't come cheap. Over time, inflation, which is now moderating, will make a comeback.

And what about the dollar?

Just because the dollar is soaring doesn't imply that trend will last, either. The Fed is not going to hike lending rates for at least another 12 months and foreign central banks won't start cutting rates until inflation eases.

At the very least I expect the rate of dollar appreciation to slow over the next few weeks as profit-taking arrives and more signs of credit contraction plague the domestic economy. If anything, I'm expecting the Fed to cut, not raise, interest rates in 2009. That won't be bullish for the dollar.

Tune in tomorrow, and I'll tell you how to take advantage of this dollar strength and short-term oil correction.

Be your own inflation hawk!

Looming inflation has the Fed on the ropes. Take matters into your own hands.

That's why you have to take action on your own. Take a bite back out of inflation and watch your earnings soar.

Click here to fatten your wallet on the back of inflation's bad intentions.

Foreigners Beware:
America's "Long Arm" is Very Long Indeed

Have you committed a "tax crime" - or any other crime - that you could be prosecuted for in the United States? If you have, you should know that there are hardly limits to U.S. jurisdiction if Uncle Sam wants to bring you before his courts.

Whether it's through an extradition treaty, deportation, or even kidnapping, it's perfectly legal - at least under U.S. law - for U.S. authorities to take "any means necessary" to prosecute you.

The best-known method for the United States to bring someone from outside its territorial jurisdiction before its courts is via an extradition treaty. The United States has extradition treaties in force with over 100 countries. The largest countries that don't have extradition treaties with the United States are China, Indonesia, Russia, and South Korea.

Extradition to the requesting country is subject to the laws, procedures, and policies of the requested country. However, even if there is no extradition treaty in effect - or if the offense you are charged with (e.g., violations of U.S. economic sanctions against particular countries) isn't covered in the particular treaty - the United States has numerous alternatives to bring you before its courts.

For instance, U.S. authorities might try to nab you when you travel internationally. Let's say you're a Russian national who travels internationally on their Russian passport.

While you've never set foot in the United States, you have an email account at Gmail, a U.S.-based email service. Through this account, you've transacted considerable business with companies in Iran - a country against which the United States has imposed economic sanctions.

Under U.S. law, using the Gmail account may well provide U.S. prosecutors with jurisdiction to indict you for violations under the International Economic Emergency Powers Act (IEEPA). The fact you've never visited the United States won't prevent an indictment. Nor will it prevent an increasing number of governments from extraditing you to the United States if you set foot there.

It gets even worse than that... I'll give more details on these ridiculous practices tomorrow.

MARK NESTMANN,
Privacy Expert & President of The Nestmann Group
www.nestmann.com

What's the Difference Between a
Dollar CD and a Foreign Currency CD?

As you may have heard, a foreign-currency CD is one of the simplest ways to buy foreign currencies.

You're not really trading one currency for another like in the foreign-exchange market. Nor are you investing with leverage like a currency option.

Instead, you're buying and holding a foreign currency - just as if you were holding an average dollar-based CD.

Really, it's a simple four-step process:

1. Decide to invest in a certain currency
2. Call your bank
3. Apply for the CD in a particular currency
4. Forget about your CD until it's time to report your holdings on your taxes each year.

In fact, it's so similar to your average dollar CD that it's easy to forget the extra benefits you're receiving by investing in a foreign currency CD.

So we thought we'd review these benefits quickly.

Benefit #1: You can actually beat inflation with a foreign-currency CD. Right now, you're average dollar-based CD only pays 2 - 4%. If inflation is soaring above 6%, then you're actually LOSING money over the long haul. But with a foreign currency CD, you can choose a stronger currency that has the power to appreciate faster than inflation.

Benefit #2: Two ways to profit. A foreign-currency CD earns interest similar to a normal dollar-based CD, but you also get an extra profit bonus if your foreign-currency appreciates in value vs. the U.S. dollar. In this way, your foreign-currency CD actually gives you two ways to profit.

Benefit #3: Instant diversification. If your entire portfolio is in dollars, then a simple foreign-currency CD gives you instant diversification to other stronger currencies around the globe. It's one of the best ways to inch into the currency markets, if you're not interested in trading.

ERIKA NOLAN, Managing Director

P.S. Don't know which CD to invest in? Check out EverBank's All-Weather Portfolio - that includes diversification across many foreign currencies plus gold.

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