Money and Energy: Weathering the Storm, by C.V. Myers, Darien, Conn: Soundview Books, 1980, 238 pp., $7.95.
This book by Canadian investment advisor C.V. Myers, whom Barron's called "the bear from the north," contains some material previously published in his The Coming Deflation (Arlington House, 1976). True to form, Myers again alerts his readers to prepare for the inevitable credit collapse. The first quarter of the book is somewhat slow going, however, as Myers provides background on such subjects as the nature of money, stores of value, inflation, and gold standards. The pace picks up, however, when he gets into the Bretton Woods gold exchange standard, nonconvertible currencies, and the ultimate put-on: "paper gold," or SDRs.
Very little of Myers's book actually pertains to energy, but, alas, it is perhaps the most interesting part. With America's age of prolific petroleum production behind her and nuclear power, as we know it today, essentially finished, Myers declares that our only real and practical salvation lies in coal. Given that the next five years are very critical ones, he says, only coal affords us the chance for independent survival. Myers explains quite convincingly that tar sands, shale, solar, etc., cannot be brought forth in sufficient volume to even make a meaningful contribution to our energy needs during this critical decade.
The United States' dependence on Mid-East oil for a substantial part of its energy requirements is the greatest danger in its history, according to Myers. Moreover, the overexpansion of money and credit and underdevelopment of coal have created the current crisis. Myers informs us that this must inevitably result in a deflationary collapse. Astronomical quantities of debt the world over and dependence on importation of fuel for survival make the United States and some other Western nations extremely vulnerable should an embargo occur once again.
Myers's explanation of the $600 billion Eurodollar overhang and the newly emerging European Monetary Union with its gold-backed currency (the "ecu") is fascinating and is, he alleges, "the most historic monetary development of the twentieth century because it splits the world into two monetary camps.…It might make you a fortune to understand it, and it might cost you a lot not to." In addition, there are several subject areas in this book that are indeed enlightening and may prove to be profitable to the reader. In addition to the aforementioned chapter on the "ecu," the chapters on coal and alternative forms of energy are especially good. The chapter on nuclear power is also absorbing and illuminating.
In conclusion, Myers makes it crystal-clear that money and energy are inextricably intertwined. Our weakened energy situation is one of the direct results of our weakened money. He prescribes what you can do with your assets in preparation for the inevitable collapse. When it comes to buying "paper," however, he suggests that you stick with selected quality common stocks of monetary metals mining and energy companies, especially coal. He recommends specific companies in coal conversion—that is, gasification and liquification—as well as those with large coal reserves in which to invest. That information alone makes this book of great value to investors.
Ray Pastor is a senior account executive with a NYSE firm in Hallandale, Florida.
This article originally appeared in print under the headline "Put Your Money Where Your Energy Is".