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Sept. 22, 2003, 1:06 a.m. EDT

A juncture for energy stocks?

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By Peter Brimelow, CBS.MarketWatch.com

NEW YORK (CBS.MW) -- Are we seeing reprise of the 1970s for energy stocks, too?

Gold's strength over the past two years has quite a number of letters making the type of fundamentalist down-with-the-dollar, gold-is-the-only-real-money arguments that I've not heard in full cry for 30 years. (See related column).

Lest we forget: They were right, at least through gold's great price spike in the inflationary crisis of 1980.

But what about the other great 70s story -- energy, and commodities in general?

The CBOE Oil Index , which closed at 277.68 Friday, has spent most of this year stealthily working its way up from its winter's lows, after losing ground for most of 2002.

The AMEX Natural Gas Index which closed at 194.66 on Friday, has been in an uptrend since last summer.

That's enough to get some letter editors interested.

Actually, in the very recent past, natural gas prices in particular have experienced a summer stumble. And therein lies a tale.

Jim Bianco in his Newsclips/ Daily Commentary service just used this break to launch another blistering attack on Fed Chairman Alan Greenspan, who worried in testimony to Congress about impeding natural gas shortages and a price squeeze just as the summer stumble in gas began.

Bianco's point: Greenspan makes mistakes, just as Bianco believes Greenspan's war on deflation could well overshoot into disastrous inflation.

Inflation. That's a real 70s word.

Which brings us back to gold, energy and commodities.

Two letters that have done well in the Hulbert Financial Digest ratings in the past few years are Outstanding Investments, now edited by John Meyers, the son one of the great 1970s oil-and-gold bugs, Vern Meyers, and National Investor, edited by Chris Temple.

Myers recently gave a classic fundamentalist case for gold and commodities:

"Whether Wall Street will admit it or not, inflation is rolling in like a massive rogue wave. When it will crash ashore can be debated, but that it will hit eventually cannot be in doubt."

Meyers is also agitated about the Middle East, where, as he says, "two-thirds of the world's oil reserves are buried beneath the sands..." Because of a mounting risk premium, he predicts oil prices "above $40 a barrel this time next year."

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