The market continued lower yesterday as resistance levels across the board held. Volume was once again lower as market participates try to decide which direction the indices want to push. Curiously

You might be wondering why Iran has so many dollars, and how it got them.

After all, Iran is a sworn enemy of the United States, and vice-versa, so where did they get these dollars?

The answer is simple. Iran is one of the 12 member states of OPEC. And while the United States actually buys most of its oil from Canada, all oil contracts are settled in dollars.

That’s gotta be a thorn in the side of countries like Iran, and Venezuela. These folks make no bones about hating America.

But I don’t think that trading in dollars for gold is done so purely out of spite.

Look at what happened the preceding 5 years before Iran allegedly began dumping dollars for gold:

With the exceptions of Afghanistan, Jordan, Tunisia and Somalia, all of the countries that have been experiencing some kind of revolution, political discord or war are ALL major oil producing countries.

These countries account for a total of about 21.3 million barrels of oil production per day – or about 25% of total oil production.

A quarter of all oil production is either in the midst of war, in the midst of regime change or on the cusp of one or the other.

Now, we know what happens with even a small amount of oil production disruption, as oil prices recently spiked from under $90 a barrel to over $110 in the span of a couple of weeks – all because Libya’s paltry 1.5 million barrels per day were in some small amount of danger of being slowed or cut off. That accounts for about 2% of daily supply.

What would happen if a country like Saudi Arabia, (with its 10 million barrels per day) experienced a significant slow down? That’s more than 10% of daily oil production. I don’t think it would be out of the question for oil prices to double or triple in very short order.

While investors are focused on events in Japan, oil prices have crept back above $100 a barrel as tension in the Middle East escalates.

The U.S. is now supporting a "no-fly zone" over Libya, and perhaps even strategic air strikes. And the government in Bahrain has apparently invited the Saudi Arabian military to help it suppress protests in Bahrain.

Iranian leaders are complaining to the U.N. about the presence of Saudi troops in Bahrain; this is mostly fueled by the fact that the protesters in Bahrain are Shiite Muslims, like the Iranians, while Bahrain’s royal family and Saudi backers are Sunni. This may seem to Westerners like splitting hairs, but to them this is significant. 

It's not Saudi Arabia the market is worried about. Saudi Arabia is quite wealthy. And while you can't say that the people of Saudi Arabiahave American-like freedom, at least the ruling family spends money on education, infrastructure and technology.

No, the fear is that protests will spread to Iraq, Iran and Kuwait. Those countries represent close to 10 million barrels of daily oil production. They are not politically stable. Disruptions to oil production in these countries would have a huge effect on oil prices.

Chinese President Hu Jintao meets with President Obama today in Washington DC.

The two presidents are supposed to have a private lunch and then discuss a variety of topics including trade, military, North Korea, Iran, human rights, the dollar, the yuan and the weather, no doubt.

As the east coast is being hammered with a wintry mix of sleet, freezing rain, snow and ice, you might expect the topic of coal to come up.

After all, a majority of electricity in the United States and China is provided by coal. And for the past few years, China has started to import coal - mostly from Australia.

As a result, China’s domestic coal companies are practically minting money. They can’t produce coal fast enough, because no matter how much coal they bring to market, there’s a near-guarantee that they’ll be able to sell it for top dollar.

They don’t have to worry about anything except for increasing production.

And now, with floods in Australia, the amount of coal being shipped to China has decreased substantially.

Gold is entering a tenth straight year of gains, and if we're going to be honest with ourselves, that trend should give us pause before we add to a position in gold.

But don't sell your gold just yet. According to recent article from Bloomberg, there's still plenty of upside.

From the article:

"Dan Brebner, an analyst at Deutsche Bank in London who is the most accurate forecaster so far this year, says the metal may reach $1,550."

Listen, I just bought some gold a couple weeks ago, and I'll likely buy some more over the coming weeks and months, but I'm looking out over the horizon for the asset to buy today, to benefit from the next decade long uptrend.

I think I've found what I'm looking for.

Stocks are moving sideways in midday trading today with oil prices stabilizing at about $62 a barrel.

Stocks moved higher today, following a decline in the price of oil that overshadowed a larger-than-expected rise in jobless claims.