Norway is oil-rich and is home to one of the strongest currencies in the world this decade. It’s also an incredible country gifted by warm people and a strong work ethic.

Prior to my arrival last Sunday, I had last visited Norway back in 1997. That trip was short – barely three hours following a quick stop from Copenhagen via an overnight cruise.

But my arrival in Oslo on Sunday was certainly memorable…

May 17 is Norwegian Independence Day. Oslo was overwhelmed by a massive parade celebrating the country’s independence from Sweden in 1814. Driving home the celebratory mood was also Norway’s victory in Moscow as it won the Eurovision Song Contest. What a party! I didn’t sleep that night – nor did anyone else in Oslo because festivities didn’t end until about 3am.

I was in Oslo to make presentations to Norwegian insurance and investment management companies. I was impressed by the Norwegians, their candid opinions, warmth and deep intellect. I was also fascinated by the cities’ modern design – heavily influenced by wood, similarly to Denmark.

Norway is home to the best-performing currency in Europe this year. In fact, since 2000 the Norwegian kroner has remained strong vis-à-vis its largest trading partners; the currency has also blasted higher against the sagging dollar this decade rising a cumulative 17%. Though it has lagged against the euro since 2000, the kroner has appreciated versus its Swedish neighbor.

Norways means oil – big oil. This is one of the richest countries in the world whereby the state pension fund has an enormous $750 billion dollars in assets. That sum equals roughly $156,000 per head. Through its vast surpluses, the Norwegian government has prudently invested its assets this decade but like other state pensions worldwide, it did suffer losses in 2008’s market meltdown.

Norwegians, however, are very domestic when it comes to investing.

Many Norwegians prefer to invest locally and refrain from global investing. The country is home to the largest energy-related asset management infrastructure with dozens of oil and gas mutual funds and other collective investment products. Also, if you’re looking for high quality investment-grade oil-related bonds, Norwegian mid-cap companies are still selling at a discount to par and offer attractive interest rates in kroner.

My message to Norwegians this week can be applied to other investors, too.

With the Norwegian kroner strong in 2009, my advice was to start selling the currency in favor of gold. As an investor, you always want to sell from a position of strength, not weakness.

Since 2005, gold prices have appreciated versus all major currencies, including the kroner. And while the Norwegian kroner is probably the best-managed currency in the world, its future is tied to oil and gas.

Norway is still exploring in the North Sea but has yet to find a major new offshore oil discovery this decade and like other major producers is struggling to replace its annual production. Peak Oil has arrived in Norway just like it has in Russia and many other oil-producing countries in and outside of OPEC.

No currency can remain strong indefinitely. As oil prices collapsed last July, the kroner quickly plunged. It has since recovered along with the price of oil. Yet this was a reminder that despite Norway’s strong balance-sheet its performance is tied to energy prices.

Diversification is essential even for a strong balance-sheet like Norway. I’d be reducing my exposure to the kroner in favor of gold – still the ultimate currency and eventually the only inflation-hedge ahead of a rapid expansion of the monetary base virtually everywhere since late 2008.

My next stop is Vienna…more on Austria tomorrow.