Oil Can Make You Think

Monday morning, a new week. This past weekend there was a meeting of oil producing nations and oil consuming nations. The Saudis who have the capacity to pump more oil said they would raise their production a modest 200,000 barrels a day. Many realize that this amount will hardly change the supply demand equation in the world of oil consumption. Prices will remain in the $135 a barrel range and higher range. The Saudis blamed the problem on speculators and that is indeed part of the problem. While the United States government can not cut off all speculation, we can close the loop holes here in our own commodity markets. But, oil is a weapon as its importance to the economies around the world needs little if any proof. The clash of ideologies with the way societies are run in the Middle East, where much of the oil is produced, and the way societies in the rest of the world are constructed and the freedoms enjoyed there, can not be discounted when examining the situation that much of the non-oil producing world finds themselves. To think that this is pure economics is a big mistake in my opinion. The Saudis would like are attention as it relates to our ideas as to how the world should be constructed, as opposed to their ideas on how their society should be constructed. Going back to 1967, the time of the Six Day War, when Israel defeated their enemies in a period of six days, I remember at that time listening to Arab delegates from Middle Eastern countries speaking at the United Nations. They were talking about their societies and their culture, a culture that was more advanced than the west during Europe’s Middle Ages. When Europe was living in darkness, they had street lights in some cities in the Middle East. I specifically remember one delegate telling his audience, as I listened over the radio, that they did not have to eat American hot dogs to be civilized. So, here we are 41 years later, with our hat in our hand pleading for more oil production. If our society with all its do’s and don’ts is so much superior to theirs, then why are we all so dependent on their oil? Certainly a country that has existed for well over 200 years as a republic, that has fought in two world wars and has risen to be one of the most powerful nations on the planet, should understand the place oil plays in the smooth operation of its economy. Where was our superior planning? The Saudis are not a loud people, or at least the rulers of the kingdom are reserved in their comments. When you have as much oil and wealth as the Saudis have you do not have to raise your voice to be heard, others will lower their voices to hear you. This past weekend the world listened and the Saudi’s oil minister spoke. He did not have to raise his voice to be heard because people wanted to hear what he had to say. The Saudis would like us to listen to other things they are saying and not saying. In other words, as we in the west would say, if you have all the answers about how a society should be constructed, if you know all the laws that mankind should follow, and have the temerity to believe everyone else on the planet should follow your laws, your ideologies, your philosophy of life, then why have you not done a better job of preparing yourselves for the future that is now? One does not have to eat hot dogs to be civilized. I can not help but think that the Saudis are, through their calculated actions, asking the West to stretch their minds a little. Perhaps the world is big enough for several ways of life and they all need not include the eating of hot dogs. Before we come around telling them how to live, how to run their society, perhaps we should do a better job of looking after our own. If the West is so perfect, then why do we find ourselves in the situation we are in with regards to our shortage of oil. The first oil embargo took place 35 years ago, where was our planning since then? Eventually, the West will figure out a substitute for oil, but that is years away. In the meantime, we are getting a quiet lesson in how not to be a big know-it-all. We are being told in a very subtle way, while we think the societies and philosophies of the Middle East need to be modernized, our societies in the west do not have all the answers either. If we did, we would not have been working last weekend and asking Saudi Arabia to pump more oil.

New subject. Today is the opening day of the 19th Annual Pension and Financial Services Conference being held in Philadelphia, PA by the National Association of Security Professionals (NASP). Membership in NASP is made up of minorities and women, two groups that historically were excluded from Wall Street and the professions involved in the securities and money management business. Today, some of the best money management companies and brokerage and investment banking firms are owned and operated by minorities and women. When I worked for the State of Ohio, I had the opportunity to meet, work and get to know many of these outstanding investment professionals. They are a very bright and talented group that have given trustees around the country and the world a reason to look beyond the major money management groups when it comes to money management expertise. The three-day conference gives their members a chance to network and share ideas and help educate pension trustees to the fact that there are some excellent money managers and investment banking firms among minorities and women. Here is wishing all my old friends another successful NASP Conference!