US bomb threat to Iran hikes oil price. Here’s the clever way to play it, and it’s NOT by investing in oil. Chairman of the Joint Chiefs of Staff, Mike Mullen, has warned Iran not to assume the U.S. military can’t strike.

“I have reserve capability, in particular our Navy and our Air Force so it would be a mistake to think that we are out of combat capability…” said Mr. Mullen.

Tough words…

Bullish news for oil.

Here at Profit Hunter we don’t dwell on the politics, but it is at the heart of the sort of profit opportunities that we uncover.

The upshot of the latest American move is that the “risk premium” which adds up to $30 to the price of a barrel of oil – isn’t going to disappear anytime soon.

If anything, it will increase.

As the Americans talk tough… the Persians act smart

“Official says Iran quits using US dollar for oil deals,” states a headline in the International Herald Tribune.

They’re quoting a top official from Iran’s oil ministry who made the statement on Iranian television yesterday.

As Profit Hunter readers will know, Iran’s been heading down this road for a while.

At a summit in Saudi Arabia last year, Iranian President Mahmoud Ahmadinejad dismissed the falling dollar as a “worthless piece of paper.” Iran actually ditched the U.S. dollar for international oil transactions last December. They’re selling in euro and yen these days.

So why on earth did they bring it up again today in full glare of the international media? Because it’s more bad news for the dollar, which is good news for the price of oil.

As OPEC President, Chakib Khelil, explains… each 1% decline in the value of the dollar drives the price of oil up by $4.

Iran is OPEC’s second largest oil exporter and oil and gas make up the bulk of the country’s $80 billion in exports. If anyone wants to see the price of oil continue to spike, it’s the Iranians.

Remember, oil is still priced in dollars. The Iranians just don’t want to be left holding a falling currency when they get paid.

Investing in oil ISN’T the best way to play this boom…

We expect the price of oil to keep rising.

But as I have pointed out before, we don’t think the best profit opportunities from this trend come from investing directly in oil. There’s too much volatility in the price.

The REAL money is going to be made by putting your money into the fast growing companies operating in the regions that are profiting from the petrodollar boom.

Some of the biggest winners have been the Middle Eastern countries. But getting into their markets isn’t easy for foreigners, so most British investors are going to be shut out of this fantastic opportunity.

Here at Profit Hunter though, we have already got exposure to this exciting growth story (sign up for a three month trial here and you can have all the details).

And we now look to a number of other interesting opportunities taking shape in that booming region…

Where the big money is heading…

The shift in economic power is being felt far and wide across the emerging economies. And it isn’t all about oil and commodities.

By the end of last year, China had three of the world’s biggest banks in terms of market capitalisation.

As the sub-prime shockwave hit, b anks in North America and Western Europe saw $695 billion dollars in market capitalisation evaporate by the end of 2007.

Banks in emerging market countries saw their market value soar by $753 billion dollars.

Return we will, to old Brazil

One of the biggest winners from the boom in emerging economies has been Brazil.

The Bovespa Index has shot up by 37% over the last year. That’s a nice change from the FTSE’s miserable 6.5% decline over the same period.

Foreign investors have been flooding into the country too… Brazil pulled in a record $34.6 billion in foreign direct investment last year. It got $18.8 billion the year before. They’re running a $40 million trade surplus and they have gone from being a debtor to a creditor country.

That was more good news than the analysts at international credit rating agency Standard & Poor’s could handle. They raised the country’s rating to “investment grade” yesterday. Many analysts weren’t expecting that to happen until next year.

The Bovespa leaped by 6.3% to a new record high on the back of the news…

Of course, S&P also told us that the sub-prime securities, now dragging the western financial system down, deserved a triple-A rating

Is this a brave new world or the next great bubble?

We haven’t had direct exposure to the Latin giant since we closed out our position in the county’s second biggest bank, Banco Itau, with a 58.1% gain last August.

Brazil was good to us and there is a lot going on there now… which makes me think of that old Frank Sinatra song…

Now, when twilight dims the sky above
Recalling thrills of our love
There’s one thing I’m certain of
Return I will to old Brazil

Find out about the profit opportunities we disclose to our subscribers here

Regards

Manraaj Singh
Editor
Profit Hunter