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Today I want to tell you a story about energy – especially crude oil.
It involves my run in with the steak bandit…
Just stay with me here…
It begins last Saturday. On a trip to the local supermarket, I saw something you just don't see every day.
You see, I always do the grocery run. It is one of several clauses that have appeared over time in my marriage contract (no doubt about it, this is one document you need to read before signing!).
As I left the store, a crowd had formed outside. There were police all around and the parking lot had been sealed shut.
It turns out a fellow had shoved some steaks down his pants and made a dash for it.
By the time all of us had stretched our necks to see what was going on, the suspect was just sitting… in a car that wouldn't start… with the doors locked… and the windows up… in 90-degree heat.
All in all, he couldn't have been having a very good day.
Maybe he was that hungry. Or maybe he forgot his wallet at home and was late for a party. I'm not sure.
Either way, he was bound for the Allegheny County Jail.
(By the way, the jail is the impressive newer-looking building by the Monongahela River in downtown Pittsburgh. You can't miss it. It looks like an upscale Holiday Inn.)
But I digress; back to the steaks.
I must admit, for a while at least, there will be a question in the back of my mind every time I go to a barbecue. Like, "Any idea where that meat has been recently?"
However, aside from a possible commentary on the plight of some people in the current economy, the episode with the "steak bandit" brought back a memory, along with a broader implication for the energy sector.
Here's the memory and how it relates to energy…
Moving to a Better Monetary Standard
More than 40 years ago, during another bout with a sputtering economy and a declining dollar, I made a remark that drew a fair amount of attention. At the time, I had my own radio talk show in Chicago.
In response to a caller's criticism of the U.S. Federal Reserve and the declining value of the dollar, I made a suggestion (somewhat tongue in cheek) that was then embellished for several days…
"Why worry about shoring up the dollar," I said, "when what we ought to do is move to a better monetary standard."
My suggestion was we use something everybody thought was valuable – steak.
Well, the "steak standard" made the rounds, got mentioned in the local press, and landed me some interviews. There was a more serious point behind all the fun, of course, but it was lost in translation.
My point was this: Throughout history, money has had three primary functions. It serves as a form of exchange, it allows us to price very different articles and commodities, and it provides a way to store value.
By itself, a dollar or a euro or a ruble or a yuan is literally not worth the paper it is printed on.
About the Author
Dr. Kent Moors is an internationally recognized expert in oil and natural gas policy, risk assessment, and emerging market economic development. He serves as an advisor to many U.S. governors and foreign governments. Kent details his latest global travels in his free Oil & Energy Investor e-letter. He makes specific investment recommendations in his newsletter, the Energy Advantage. For more active investors, he issues shorter-term trades in his Energy Inner Circle.