CHEAP OIL -- BUY STOCKS!!

Since the stock market bottomed around October of 2001, the price of oil has dropped 28% in Eurodollars! The price of oil has risen 11% in US dollars. The increase of 11% in the US has acted like a tax on the economy and our GDP growth has been reduced from about 4.25% to about 3.75%. Wow! American has been in a growth boom even in the face of high oil prices.

Europe has not enjoyed the same growth rate as America but the recent drop in oil is acting like a tax refund for Europeans. Oil is cheap and the consumers there now have money to spend. If they travel to America they will find that their dollars buy about 39% more than they would have at the market bottom.

It is true that Europeans are buying condos in New York, Las Vegas and Myrtle Beach to enjoy. Many a condo at the beach looks cheap when compared to a "flat" in London. As "My Old Merrill Pal" has written, the Europeans have never received the benefits of home-ownership like Americans because fewer of them own their homes. (The Queen and her children rent thousands of homes to their loyal subjects). Never-the-less, the world economy is hitting on all cylinders. Buy stocks now or watch everyone else make the money.