When I heard that the FDA was lifting restrictions on silicone breast implants, I couldn't resist proclaiming that the 1970's were back. Oh, but we have more similarities than just breast implants.

The question now is will we see an end to this cyclical bull rally and see a 1973-1974 bear market, or will the market begin a new bull market without a final low?

1) Supply-side shocks (OPEC's two oil embargoes of the 1970's) caused energy prices to soar. Today demand for energy resources are high (China & developing nations) creating another supply-side shock.

The first mention of Hubbert's Peak began in 1970 when many proclaimed that U.S. oil production had peaked. Today, many researchers are saying that U.S. production has fallen to the levels of the 1940's. In 2005, U.S. oil imports were twice as high as domestic production.

OPEC countries like Saudi Arabia have not reduced their oil reserve figures for many years even leading many to doubt whether they have the reserves that they claim. This same situation occurred from 1973-1979 when U.S. oil companies claimed to have more oil than they actually had.

Two-thirds of the world's known oil reserves are in the Persian Gulf. Saudi Arabia is the world's largest producer, followed by Iraq, which may explain why President Bush keeps saying that" we must stay the course" in Iraq.

Today, we are seeing the same situation with U.S. oil companies. Many of these domestic companies report as their reserves the joint ventures they have with foreign countries. Given the political conflicts in South America, many U.S. oil companies are being expelled from countries like Peru, and Venezuela.

This weekend, Venezuelan President Hugo Chavez won a landslide victory in the nations recent elections. For the next six years, Chavez will continue to gain support from other countries in South America, and build coalitions against U.S. oil interests.