With apologies to Dr Marc Faber

'We continue, however, to recommend that our readers increase their exposure to oil companies with significant reserves (Chinese oil companies don't have large reserves) and to oil servicing companies, as the fundamentals of the oil industry are compelling. Asia, with 3.6 billion people or 56% of the world's population consumes less oil than the US with 285 million people.

'Based on recent trends in oil demand in Asia and given the positive growth prospects for Asia, I would expect Asian daily oil consumption to double from about 20 million barrels to anywhere between 35 million to 50 million barrels in the next ten years or so.

'Since current oil production is running at 78 million barrels per day and can due to declining reserves in non-OPEC countries unlikely be increased much, I would expect prices to harden significantly.

'In fact, I would not rule out another oil crisis should as a result of some political upheaval in the Middle East supplies be interrupted. Moreover, whereas the NASDAQ seems pricey, to put it mildly, oil companies command very undemanding valuations.

'In sum, rising energy prices will lead to higher inflation and higher interest rates. A stronger dollar may hurt some big players who are short dollars and lead to less buying of US treasuries by Asian central banks and so depress the bond market.'

As an addendum to this scenario. Given that GCC stock markets are inversely correlated with global stocks, local investors should not have too much to worry about. High oil prices will keep local stocks very bouyant, and may even attract global capital inflows.

Indeed in Dr Faber's excellent book 'Tomorrow's Gold' he looks at the business cycles of emerging markets. It is hard not to place the Middle East in phase two of his analysis, and at this stage stock values double or treble along with real estate prices.