Bubble Boom and Economic Collapse

Peak oil is coming. Some say as early as 2005 December 16, which has come and gone, and others as late as 2037. To me it looks like it's coming in 2008. Our present steady oil market will be replaced by a declining one, and shortages, high prices, and possibly wars will occur. Further, baby boomers like me (I will be 60 years old soon) will start retiring in droves around 2010; they will live on retirement incomes and drag the economy down. Grim outlook. How should I invest? I have run into two financial analysts who take societal trends into account: Stephen Leeb, who takes peak oil into account, and H.S. Dent, who takes generational theory into account. Up to now, Stephen Leeb (The Oil Factor) calls for alternating mostly safe investments (if oil increases 80%) with investing in energy, gold, and real estate (bubble busting soon?) (if oil decreases or increases less than 20%). H.S. Dent (The Roaring 2000s) says that incredible boom times have come (yeah, the dot-com boom and bust) and that we are going to get more big boom, until 2010 when the Mother of all Depressions with 15% unemployment will arrive and last 15 years.

What do they call for now? Stephen Leeb has published a new book, The Coming Economic Collapse, in which he says that peak oil will cause the world economy to go into a severe recession or depression, but he says one can still "get rich" from it. I don't see how. H.S. Dent has published The Next Great Bubble Boom, in which he says an incredible boom will occur until 2009, with the Dow hitting 40,000 (that's right - forty thousand) and then the roofs are coming to be coming down everywhere like roofs on houses in New Orleans during Katrina: The Mother of All Depressions. I have ordered both books.

I will read them when I get them this week, and will find out what they say. In the meantime, I will say that investing in near peak oil times has proved to be tricky. Oil does not go monolithically up. Instead, it soars in price, causing people to grouse, grumble and do without. This causes demand to decrease ("demand destruction"), causing oil to fall in price. In addition, the higher gasoline and other fuel prices cause a slowdown in the economy and higher inflation rates, and these things cause the stock market to fall, taking energy funds and gold with it. So for example, my energy and gold shares have done great so far this year, until recently when they fell, costing me 1% of my portfolio. Stephen Leeb reminds us that we should not buy and hold, but at no time did his negative oil indicator sound. In fact, his positive indicator has hit several times. So I have held. But I do know one thing. If the weather models predict a major hurricane hit on the Gulf Coast, I am pulling out of stocks altogether.