Oil's four-year bull run to +$140 per barrel has increased the wealth of 'petrodollar' nations, and is about set to propel another shift, this time in the bond market.

Petroleum-exporting nations, such as Saudi Arabia and Russia are set to become the biggest creditor nations to the U.S. Government, Bloomberg News reported Monday.

Holdings of petrodollar nations increased 44% to $510 billion through April, Bloomberg News reported Monday -- an increase pace that's set to displace Japan, which holds the largest amount of U.S. Treasuries, at $592.2 billion.

Oil rose about 20 cents to $145.28 per barrel in late Monday afternoon trading.

The need to fulfill promises of increased aid for Africa, and a general agreement between the United States and Russia on an approach to Iran's nuclear program took center stage as leaders from the Group of Eight industrial nations met Monday in Japan, The Associated Press reported.

President Bush, attending his last summit as a sitting U.S. president, underscored the importance of providing aid for Africa, calling on wealthy nations to provide mosquito netting and other aid to prevent needless deaths, the AP reported.

Basic items - - even equipment as basic as mosquito netting - - can reduce mortality rates in sections of Africa. Mosquito netting prevents children and others from dieing of bites from disease-carrying mosquitoes.

In 2005 the G-8 pledged to increase global aid to $130 billion, and increase assistance to Africa to $50 billion. ONE, a nonpartisan group working to end extreme poverty, predicted that the U.S. and the United Kingdom will meet their commitments, while France, Italy, Germany and Canada are off the mark, Bloomberg News reported Monday.

Increased global food aid likely

Economist Glen Langan, whose specializations include agricultural economics, said increased aid for food and agricultural development will likely be announced by G-8 leaders at the summit, or soon thereafter, due to the rising cost of food's impact on poorer nations. "The aid will be targeted to meeting basic needs first, but with an eye toward directing some funds to self-sustaining agriculture," Langan said, adding that Africa "has the potential to achieve food production gains greater than South America."

"I've long favored Russia for investment, building my case around its energy sector and the infrastructure boom taking place," says Yiannis Mostrous in Silk Road Investor. Here are his top energy plays.

"Russia is currently in a sweet spot: It's a net oil exporter, has solid GDP growth, isn't dependent on foreign capital flows, is politically stable, has reasonable market valuations and, above all, enjoys solid exposure to the biggest growth story of our time, Asia.

"Russia's GDP grew by 8.5% year-over-year in the first quarter of 2008, stronger than expectations. The expansion was broad based: construction, manufacturing, electricity generation and services all showed healthy growth.

"Russia's energy companies have underperformed because of the relatively heavy tax burden imposed by the state. But the Russian economy has turned around, and the government has announced tax cuts that will take effect 1 January 2009, saving the industry USD1.30 per barrel of crude produced.

Oil is starting the week off trading a little lower today, but Goldman Sachs (NYSE: GS) is looking for oil prices to continue to move higher, and expects to see $150 much sooner than previously thought.

While speaking today at a conference in Malaysian's capital, Kuala Lumpur, Jeffrey Currie stated that the possibility that we were going to see $150 oil was real, and that he believed that we would hit that time sometime this summer. Goldman has been bullish on oil prices for some time now, and last month went so far as to state that we would be seeing $200 oil at some point within the next two years.

While $150 oil may sound insane, it really is not that big of a difference from where we are now. Today prices have retreated a bit back down to around $136.25, but Friday they were close to breaking through the $140 mark, after trading up more than $11 and hitting a high on of $139.12. All it would really take is just one or two more days like that to make $150 oil a reality.

In the United States when one company wants to inflict pain on a competitor it commonly uses the law as its weapon of choice, enlisting an army of lawyers to bludgeon the rival with legal actions. Right or wrong one company can tie the other up in court for years, and if the competitor is smaller and weaker, put it out of business or inflict great hardship.

In Russia, they seem to be skipping the middle man -- not engaging the lawyers, but going straight to the government. According to the most recent issue of Business Week, companies are paying public officials to raid the offices of business rivals and subject them to criminal investigations.

Some 8,000 companies a year are targets of lawsuits or investigations at the behest of rivals seeking to put them out of business or take them over, the Russian Chamber of Commerce & Industry says. Russians call this process reiderstvo, or raiding.

In most cases, the raids are conducted by something similar to our SWAT teams, removing documents and computers and soon after bringing charges of tax evasion, fraud and conspiracy. It is reported that the police, civil servants and court system all play along for a price.

Gap Stores (NYSE: GPS), the parent company of Gap, Banana Republic and Old Navy, has been threatening to revitalize its U.S. stores for years. But with the stock down more than 50% since the dawn of the new millennium, the company has failed to restore its brands to relevance.

Now the company has announced that it will partner with Fiba Holdings A.S. to pen Gap and Banana Republic stores in Russia. Fiba will act as the franchise partner, just as it does for the company's stores in Turkey. Stores will be begin opening in time for the holidays.

Its possible that Gap will be able to regain some strength by focusing on international opportunities. Domestically, it's hard to think of a more passé fashion brand. But just as American baseball players on the decline often head to Japan and find success, once-iconic American fashion brands sometimes find new life overseas. Apax Partners' success with the Tommy Hilfiger brand is a prime example.

For now, though, I think investors should stay away from shares of Gap.

Gasoline prices have continued their charge up to $4 a gallon today, rising to a new record high of $3.418 after jumping 1.9 cents last night.

Gas prices have been rising sharply over the past few months in reaction to record high oil prices and a weak dollar, and some analysts are already predicting that we will be seeing $4 a gallon before it is all said and done. Diesel prices also rose to a new high, hitting $4.146 per gallon.

As we noted in earlier discussions, gas prices are only expected to move higher in the next few months as more drivers hit the road for their summer vacations. The heavy demand summer driving months always apply upward pressure to prices, and despite the current high prices, summer demand will definitely push prices even higher.

In a report that surprised many sector watchers, Russian oil production fell for the first time in a decade, based on year-over-year basis The Wall Street Journal reported Tuesday (Subscription required).

Russia, the world's second biggest exporter of oil after Saudi Arabia, averaged production of 10 million barrels per day during the first three months of this year -- a 1% drop in production when compared to the same period in 2007, The Associated Press reported Tuesday, citing International Energy Agency data.

Aging infrastructure or aging fields?

Analysts, oil industry executive, and economists will now begin the painstaking process of determining the exact cause of the production shortage. Russia has suffered from electricity shortages and poor weather conditions in oil production zones during the past year. In addition, despite Russia's impressive, 5-year economic boom and related development -- an economic expansion driven to a considerable degree by Russia's oil revenue -- the nation's oil infrastructure remains inadequate and in need of up to $50 billion in improvements and upgrades.

Independent energy trader Jim Dietz said if the current production drop stems from weather problems or infrastructure deficiencies, the oil market will largely overlook the decline, as a temporary dip.

Now that it is clear that Wal-Mart's (NYSE:WMT) international operations are growing much faster than its US division, the company is searching for new frontiers. Revenue overseas is growing at a rate better than 20%

Wal-Mart has had trouble in some countries. Its operation in Japan continues to loss money and it has pulled out of Korea and Germany.

Now, the world's largest retailer is looking to Russia and eastern Europe for more growth. According to the FT, Wal-Mart "firmly signaled its intention to expand into Russia and eastern Europe, announcing that it had recruited Stephan Fanderl, a German retail executive, to explore opportunities in the region."

It will be at least a couple of years before the market can gauge whether Wal-Mart can have success in the region. It has to compete with other companies like big European retail chain Tesco. The Wal-Mart model clearly does not work in all cultures.

A break-down of Wal-Mat's track record overseas is telling. It problems in Germany, Japan, and Korea have been more than off-set by successes in China and Mexico. To some extent that may mean that countries with lower median incomes are better markets for the company. Russia and Eastern Europe are a mixed bag. Parts of Russia have done very well financially. Eastern Europe is still in a stage of economic development.

Wal-Mart may be expanding outside the US, but its success is hardly assured.

Douglas A. McIntyre is an editor at 247wallst.com.

The price of crude moved to a record above $112 overnight. It seems that speculation, a weak dollar, and concern about demand just keep pushing oil higher.

Now, oil is part of a "good news/bad news" play. Evidence is coming out of Russia that oil production there has peaked. According to the FT, "Russian oil production has peaked and may never return to current levels." By many measures, Russia is the world's second largest oil producer.

That bad news may be offset by a huge oil discovery off the coast of Brazil. The country's state-owned oil company, Petróleo Brasileiro, said it had made a huge discovery off-shore. According to The Wall Street Journal, "the head of Brazil's National Petroleum Agency, Haroldo Lima, said the strike could be one of the world's biggest oil discoveries in decades, containing as much as 33 billion barrels in oil equivalent."

The question now is whether one huge deposit can offset a decline in Russia and a fall-off in oil from other large producers like Mexico. For now, the answer is "no." That's because the Brazil discovery is in deep water. It could take several years to get it completely online. The decline in production in other countries is happening now.

The Brazil discovery brings hope, but no relief, at least no for now.

Douglas A. McIntyre is an editor at 247wallst.com.

"U.S. Global Investors (Nasdaq: GROW) has been growing its revenue and earnings at an accelerated pace
over the last few years, notes Horacio Marquez, adding "And that pace is about to pick up after a recent mild respite."

The contributing editor to The Money Map explains, "We expect very strong gains in this stock to come in short order." Here, he looks at the fund management firm.

"The reason is very simple. If you couple some of the best minds in emerging-market investments and commodity
investments with a comprehensive quantitative and qualitative approach, you get consistently top-performing
funds with eye-popping returns.

"Last year, four of the firm's equity funds, – representing more than 80% of the money under management –
were among the top performers in the overall U.S. mutual fund universe, in the one- and 10-year time
periods.

"And in the fund-management business, strong, consistent fund performance drives growth in assets under management. And since growth in assets under management drives fees, it is no surprise that this company has
been able to achieve operating income growth rates of between 27% to 94% over the last 10 years.

"In fact, the company should see accelerating earnings growth in the second half, as the interest rates cuts favor higher commodity prices and emerging-market investments – areas in which U.S. Global's funds excel.

With news the embattled mortgage lender Northern Rock is being nationalized by the British government, until it can find a buyer, the question arises whether this is a good move or not?

Analysts at Bear Stearns said that the government's move is positive for the sector. The expected managed decline in the Northern Rock balance sheet should create less competitive mortgage market conditions," said analyst Robert Sage.

Who is this positive for? Certainly not the consumer. Competitive mortgage markets are the best thing that can happen to a consumer. Why should the consumer have to pay higher mortgage rates? Does this analyst think that the government setting mortgage rates is helpful in anyway? Let's not forget that the banks are responsible for this whole mess. Had they actually been careful in their lending practices, we wouldn't be in the mess we are currently in.

As I fully expected, I've received a fair amount of comments on a recent blog post in which I proudly took a stance in favor of Exxon's court backed demand that the government of Hugo Chavez immediately ante up for the oil infrastructure which the country he leads has stolen from Exxon Mobil Corp. (NYSE: XOM). Most of the commentary was lucid and well thought out on both sides of the argument, but one particular commenter really piqued my sense of intrigue.

The comment I'm referring to was an assertion that what the Chavez government has done by seizing the Cerro-Negro oil development is legal. For the purpose of this rebuttal, and because I am near totally ignorant of international law, I'm going to assume that comment was correct. Now, here comes the Devil's Advocate:

Most investors are aware that China's surging growth and increasing energy use have helped push oil to +$90 per barrel near-record highs. But what many probably don't know is that China's double-digit GDP growth is forcing up the price of another major energy source: coal.

The price of coal -- the most plentiful energy resource -- is rising at an alarming rate: Asia prices are up more than 30% this year, The Wall Street Journal reported Tuesday (subscription required), due mostly to China's net importer status. China had been a net exporter of coal, but in mid-2007 it imported coal for the first time. Coal is trading above $125 per metric ton. In 2003 it traded at about $25 per metric ton. Since January 2007 alone, coal is up more than 140%.

U.S. coal suppliers have benefited from the run-up: Arch Coal (NYSE: ACI) is up about 90% since August 2007; ACI was down about $1.50 to $53.32 in Tuesday afternoon trading. Meanwhile, Peabody Energy (NYSE: BTU) is up about 45% since August 2007; BTU fell 40 cents to $56.12 on Tuesday afternoon.

Someone might want to explain this to me because it defies nearly all palatable logic that I can apply to it. I read earlier this week that China carries a large debt portfolio and that about 70% of it is American debt. Additionally, China is buying up American debt at break-neck speed, while possibly neglecting their own populace in order to do so.

As I was taught, there are two potentially profitable reasons to buy debt obligations. The first (and best) reason is because there is a reasonable expectation that the debt will be repaid, supported by documentation, collateral security, and research. The second reason is because there is an expectation that the debtor shall default, resulting in the expeditious seizure of pledged security assets that are desired.

I've become aware of an unsettling third scenario regarding the value of buying debt. You can easily use it to buy control of the debtor's assets through their weakness.