Oil is completely overrated, says Andrew Gordon in Investor’s Daily Edge Unplugged. As a fuel, it’s on its way out. Maybe not in the near future. But sometime soon. And as an investment, it’s downright unreliable. One day it’s up. The next it’s down…

So what if the world runs on oil. So what if oil barons are richer than ethanol barons.

So what if oil can lead the entire world into a global recession. And, with falling prices (like the past week!), seemingly pull us out of one.

I repeat: oil is no big deal.

As a fuel, it’s on the way out. Okay, not tomorrow or next year. But historians will mark these next 20 years as the last heyday of this dirty overpriced greasy fuel.

As an investment it’s too unreliable. One day oil’s up. The next it’s down.

It can go up on news of a hurricane plowing through the Gulf – even if it does no damage. It can go down even on those days (like yesterday) when Iran announced (again!) to the world that it would not be deterred from developing its nuclear program. (Is anybody listening out there?)

As a strategic resource critical to a nation’s security? As a valuable resource that nourishes a country’s economic growth? Don’t make me laugh. Countries are better off without it. Until recently, we made oil an ally not an enemy of economic growth. We were the exceptions. Oil isn’t a blessing. It’s a curse.

For every U.S., there is a Nigeria. A wealthy country 20 years ago, Nigeria was done in by oil’s corrupt influences.

Yes, oil creates the possibility of untold wealth for individuals and companies. But without the rule of law or some kind of checks and balances on the ruling elite, oil morphs from black gold into the black plague.

Indonesia’s once plentiful oil has set their economic development back 15 years…

Mexico’s petrodollars circulate within a small powerful club of businessmen and politicians…

Russia’s oil revenue hasn’t ruined the country, but it will. Russia is this century’s version of a “Banana Republic.” Do you love Russia’s economy? Russia extracts. It sells. And it invests its profits elsewhere. What kind of economy is that?

Venezuela’s oil is financing their socialist and populist experiments – none of which involve creating a private sector that can create wealth.

On the other hand…

Japan never had oil and it grew into Asia’s first economic giant. Singapore never had oil and it’s the pearl of Southeast Asia.

Source: The Last Days of Corrupt Oil