Market Call: $100 Oil, $3000 Gold?

Will the current decade turn out to be like the 1920s, 1970s, or 1990s? We are still assigning subjective probabilities of 60% to the Roaring 2020s (like the 1920s), 20% to a bout of irrational exuberance (like the late 1990s), and 20% to a second peak in inflation (as occurred during the 1970s).

We might have to increase the odds of a 1970s-like scenario if the price of oil continues to rise. Our very good friend Steve Soukup posted an April 6 article titled "Saudi Arabia and the Tale of Two Presidents." You should read it. The basic thesis is that the Saudis might like to see President Joe Biden lose to Donald Trump. So they might do whatever they can to boost the price of oil before the November election. Both the Saudis and Russians started reducing their output last summer (chart).