Caterpillar's (NYSE: CAT) fourth-quarter earnings were strong. But the future could be even brighter.

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:

The word "inflation" is appearing in the headlines more and more. For emerging markets, inflation is getting a bit scary. China is expected to show 5% inflation for the first two months of the year. That's clearly a big problem for China. And the situation is similar in other emerging economies, like Brazil and India.

Each of these three countries has raised interest rates to fight inflation. They will certainly have to do more. Especially China. China's currency is undervalued, kept that way by an artificially imposed exchange value known as a "peg." China pegs its yuan to the U.S. dollar.

The rioting in Egypt has calmed down substantially. The military has stated that it will not fire upon protesters, which would seem to be a tacit vote of no confidence for the Mubarak government.

Not that shooting people is the only way to show support for the government. But the statement by the military seems like a pre-emptive move.

There’s little doubt that the world’s superpowers are now fighting a new war. It’s not a cold one, or a hot one. No tanks, bombs or poison gas. At least not yet.

But open hostility between Europe, Brazil, China, India and the United States blanket the headlines nearly every day.

It’s a long-awaited answer to the question, “Do deficits matter?”

And the answer is a resounding, “Yes of course they do, don’t be silly - why in the world wouldn’t they matter?”

The world’s second most popular beverage (after water) is about to get a whole lot more expensive.

I’m talking about coffee.

The reason for the price increase (besides slightly higher oil prices and general currency devaluation) is pretty serious, at least in coffee circles.

You see, for many years, coffee roasters and other institutional coffee consumers have complained about the lack of consistency of quality in Arabica beans.

Part of the allure of having a large, liquid commodity exchange is that the commodity itself is fungible, that is, of the same quality and consistency - from one ear of corn to the next, from one ounce of gold minted in South Africa to one smelted in Alaska.

Stocks pushed higher again on Friday. The Dow Industrials broke above 11,000 and the S&P 500 moved closer to TradeMaster Jason Cimpl's target set five weeks ago of 1,172.

Still, these indices are below their 52-week highs of 11,309 and 1,219, respectively. That was back in April, after the European debt problems prompted a massive lending program form the EU and 1Q earnings came in very strong.

Before I reveal the name of this stock, I want to point out that buying a company with farmland in the mix is a great diversification play - and doubly so when it pays a dividend.

That's because when you buy this type of company, you're getting exposure to the continued profitability of its underlying farm business, but you're also buying actual farmland that the company owns - and if you've been reading this letter, you probably know that I'm extremely bullish on farmland prices.

I also happen to be bullish on the commodities that grow on farms; corn, wheat, sugar, cattle, pigs, chickens, etc.

The dividend is just a small bonus, but I know there are readers out there interested in income, so it's worth a mention - even though it's only a 2% annual yield.

In yesterday's edition, I talked about an oil services company that benefits from higher oil prices.

But higher oil prices don't just benefit oil companies. In fact, higher oil prices can sometimes hurt oil companies - because higher oil prices frequently reflect higher production costs - so while a company might get more dollars per barrel, each barrel costs it more to get out of the ground. And even though the effect is usually small, higher prices typically result in a somewhat diminished demand.

According to Enerdata, an independent energy consulting company, gasoline consumption dropped 4.5% in North America during the record high oil prices of 2008. That's certainly a significant drop, but as you're probably painfully aware, oil prices more than doubled from the previous year:

For months, former George Soros partner and famed resource investor Jim Rogers has been trumpeting natural gas and silver investments. I've been doing the same in the Resource Prospector newsletter since launching back in March. If you've been sitting on the sidelines, there is still time to take action before these investments run away from you.

Jim Rogerswrote the book on resource investing: Hot Commodities. I urge anyone interested in the topic to go out and get yourself a copy. Right now there are 29 new and 17 used copies of this book on Amazon.

When Jim Rogers said to buy natural gas and silver three months ago, I was already urging you to do the same. Natural gas prices have since risen by more than 25% - and some of the stocks in that sector have done far better.

I've also been pounding the silver drum. Silver is now up almost 10%, but I still think there's much more upside. You can read more about silver's potential in this past issue of the Resource Prospector by clicking here.

Rogers is still bullish on silver, but he recently mentioned another cheap commodity. It's something that Americans use everyday in great quantities - over 160 pounds per person every year.

I hope this 6^th of May is finding you in good spirits, and that you’re not experiencing the downside of tequila over-enjoyment. Nothing against Mexican independence, but a foreign national holiday, partly concocted for American consumption by shrewd liquor companies, is not a good enough excuse for me to tie one on in the middle of the week.

And this time of year in Vermont, it’s just too nice out to want to risk ruining the next day with a tequila and sugar borne hangover. (By the way, if you know of a good hangover cure, please send it to me at editorial@resourceprospector.com)

Too much of a good thing is almost always no fun. Likewise, a bumper crop of sugar from Brazil and India is causing some severe consequences for prices.

The average American uses 156 pounds of sugar every year. At current price levels of about 15 cents a pound, that comes to only $23 and change.

I can imagine that a few people were waiting for President Obama to follow up his declaration that he was opening up the East Coast shelf for oil drilling with a hearty “April Fools!” but he didn’t.  

It’s for real.   

The decision to open up the East Coast shelf is sure to anger some people. Former Florida governor Jeb Bush was adamantly opposed to drilling off of Florida’s coast, even when his brother George pondered the idea. He felt that oil drilling might spoil Florida’s beaches and impact tourism.   

I don’t know how current governor Charlie Crist feels about offshore drilling, but there will be plenty of vocal opposition. Imagine the irony as both environmentalists and conservative politicians lambaste Obama for this decision to open up oil drilling!