Manhattan Reborn 1978

Southeast Texas, Houston.

After lunch

West of downtown, Piney Point Village in the Memorial District, 89 Pinewood Avenue.

After a morning of communication, the two friends brought by old Cheroff, Malcolm Baldrige and Eric Wallams, both said goodbye politely and left after lunch.

After they left, old Cherov took David into the study and sat down, explaining in detail why he chose to bring the two of them here today and the important decision he made after discussing with several friends.

"You want to work together to acquire and rebuild some oil storage warehouses in the Port of Houston, and the crude oil pipeline between Houston and Cushing, and then rebuild Cushing's external oil storage + pipeline transportation system?" David asked with a little surprise.

"Yes, this was your suggestion to me. Now that we have made a decision, we must inform you." Old Cherov said with a smile in his eyes.

"But... isn't this investment amount too much? How much are you planning to invest?" David considered his tone and asked again.

“The initial investment won’t be too much, probably tens of millions.”

Old Cherov tilted his head to glance outside the study and lowered his voice.

"Around Thanksgiving last November, old Morgan approached me and wanted to sell me some of the listed company stocks held by the Morgan family."

"At that time, I didn't know what he wanted to do, but I thought it was profitable, so I agreed to it."

"But when we went to Thomas Mellon's house that time and learned that he had invested a fortune to stockpile 100 million barrels of crude oil, I finally understood everything. He followed your advice and quietly began to make plans in the international crude oil market in advance!"

"Boy, you are not still pretending to be confused with me until now, right?"

"Uh... I never played dumb with you!" David felt very wronged and raised his hands with a bitter smile.

"Humph!"

David realized that he was a little passive on this topic, so he deliberately looked back, stood up with a smile, walked to the door, closed the door, and waved his hand to explain.

"They are Zina and Elena, both of whom are friends that Livlin and Leslie get along well with, so I called them over..."

"What friends? They are all your boy's lovers, right?"

"Hehe~" David smiled with a crooked mouth and did not respond to this.

Old Cherov looked at David with scrutiny. After a few seconds of silence, he shook his head and sighed, "Several decades ago, the Morgan family encountered a major crisis that was little known to the public."

"The cause of the crisis was that J.P. Morgan acted too hard on Wall Street, which caused strong dissatisfaction among many people."

"So in the 20s, the Morgan family began to quietly hide the information of the family's direct descendants from leaking out, and carefully selected a number of reliable children from the family's side branches to grow up together as partners with the direct descendants."

"At the same time, we can also share the risks?" David suddenly asked with a frown.

"Yes."

"So what do you think about... my engagement with Lilith?"

Old Cherov looked at David with a slightly complicated expression. He felt it was ridiculous for this kid's deliberate "stupidity" and shook his head slightly.

"Have you forgotten our last conversation in the car?"

"What? You still want to fool me with such stupid words?"

"..." David pursed his lips, raised his head, scratched his head, and took the initiative to change the subject.

"Does the collaborator you just mentioned include old Mr. Wharton? Has he never contacted you?"

"I found it." Old Cherov seemed to be amused by this question. He looked at the butler Ackleid who was standing at the door of the living room in the distance and asked with a smile.

"Are you still short of help? Can I introduce you to a few more?"

"That's enough, thank you!" David felt a little embarrassed and waved his hand.

"No, it's far from enough!" Old Cherov's face suddenly became serious and he said meaningfully.

"Um...you mean...my security?"

"Ok!"

"...I see. Thanks for the reminder!"

"Hehe~" Old Cherov turned his head and looked out the window with a sneer on his lips.

David knew in his heart that this elder, who had experienced countless hardships, was sincerely reminding him.

So he walked to old Cherov with a serious expression and sat down next to him, then said after pondering for a few seconds.

"Regarding the matter of DA Security Company, I will deal with it as soon as possible..."

"and you?"

"What can I do for you?"

"..." Old Cherov looked at David quietly for a moment, seemed a little hesitant, and changed the subject.

"You have all grown up, and we have all grown old."

"Of the five brothers in the Rockefeller family, only the third brother, Louis, and the fifth brother, David, are left."

"The Morgan family now only has Sirod (Old Morgan) and Julie left."

"Uncle, this year..?"

"Almost sixty."

"Oh, then you are indeed old and it is time to retire."

"..." Old Cherov looked at David with a squint and said nothing.

David picked up the coffee pot with a smile, poured coffee for the two of them, and said in an affirmative tone.

"I suggest that before the world's first crude oil futures are listed, it is indeed a very risky investment to carry out a comprehensive transformation of Cushing, which has great strategic investment value."

"But you should also understand that since the US dollar was decoupled from gold and re-anchored to oil, the order of the international crude oil market has become increasingly chaotic, and almost anyone can jump out and stir up trouble."

"A market without order, only turbulence~"

"It is undoubtedly the favorite hunting ground of ambitious people!"

"So, after seeing this, what suggestions did you give to old Morgan?" Old Cheroff asked after a pause.

"Yes." "Only in a relatively formal, stable and orderly market can I give full play to my strengths, find clues from countless uncertainties, and then determine the future!"

David nodded frankly, stood up with a smile, walked to the bookshelf, and said while selecting books.

"Actually, I'm not a genius, just an ordinary person."

"After I gained more knowledge and read countless classic works, I felt that these people were the real geniuses!"

"For example, this one~" David picked a book from the bookshelf, walked up to old Cherov and handed it to him, saying with a smile.

"In 1871, Carl Menger, the founder of the Austrian School of Economics, published the theoretical work, Principles of Political Economy, which is now regarded as the unshakable cornerstone of the Austrian School."

"In this book, he took human desire and the satisfaction of desire as the basic starting point and final destination, launched a comprehensive analysis of the subjective theory of value, expounded the marginal effect theory, inherited the tradition of German economics, and is a representative work that laid the foundation for the Austrian School."

"Menger insisted on the abstract method of theoretical research, focused on the cause and effect relationship of economic phenomena, and explained the marginal utility value theory in a relatively popular way..."

"And Menger's famous theory of the origin of money, which is still often cited today as a model for the theory of spontaneous order."

"In 1883, Menger published another important work, An Inquiry into the Methods of the Social Sciences, especially of Political Economy."

"It happened that in this year, the famous thinker, politician, and philosopher Marx passed away due to illness."

"In the same year, two other heavyweights in the international economics community were born in Britain and Austria respectively."

"They are Keynes and Schumpeter!"

As David spoke, he found a few books from the bookshelf of his mentor, Professor Bartlett, took them back and sat down next to old Cheroff, smiling.

"Many of the economic cycle theories I talked about this morning were quoted from the economic cycle theory proposed by Keynes, the economic cycle theory proposed by Schumpeter, and the economic cycle theory proposed by British economist John Richard Hicks in the 50s."

"But judging from the international economic development trends in the past decade, the economic cycle theory they proposed seems unable to perfectly explain the situation of economic growth approaching stagnation and rising inflation index."

"So I combined a lot of real economic data from recent years, tried to simplify them, summarized and expressed them in a simpler way, and shared them with you."

"Whether it is accurate and whether it can accurately predict the economic trend in the next six months, a year or several years depends on whether the Federal Reserve can regain the independence that a central bank should have and implement a more radical tightening monetary policy."

"..." Old Cherov lowered his eyes, looking at several classic works at hand, frowning and silent.

David seemed to have guessed some of his thoughts and spoke in a relaxed tone.

"To put it more bluntly, the chaos in recent years was mostly caused by the decoupling of the US dollar from gold and the continuous decline in the credit of the US dollar."

"The last oil crisis was just a warm-up..."

"The oil crisis that has broken out this time will definitely trigger a large-scale melee among various forces at home and abroad to reshuffle the cards."

"And in this melee involving countless ambitious speculators, there are only two most important targets~"

“Pricing power for gold and crude oil!”

“Regarding the gold pricing power, you should know the story behind it better than I do, so I won’t say more.”

"As for how the battle for crude oil pricing power will end, I think we can refer to the Nash equilibrium theory proposed by Professor John Nash. After non-cooperative multi-party games, an equilibrium will definitely emerge."

“And I think this equilibrium point will definitely be a crude oil futures contract that can influence the trend of international oil prices!”

"What you mean is... whichever country's exchange lists crude oil futures contracts first and expands its influence will win?" Old Cherov asked, staring at David with burning eyes.

"Yes!" David shook his head slightly.

"I think the heating oil futures contract listed in New York last year is probably just the beginning. The final outcome of the game is still unknown!"

"For example, the crude oil futures contracts that were circulated on Wall Street a few years ago were only used by some domestic super-large oil companies as a tool to reduce risks, and were not open to large-scale public trading."

"But recently I heard that the top management of the exchange seems to have reached a consensus and decided to gradually standardize the control of crude oil futures contracts starting with heating oil futures contracts, and hope that more people can use this tool to avoid the risk of oil price fluctuations or conduct cross-period arbitrage."

"you sure?"

"Sure!"

"Why didn't I hear the news?"

“Have they decided where to set up the futures delivery warehouses?”

"These... I don't know either..." David spread his hands to old Cherov and smiled bitterly.

"When I first met Giles and Pine last year, I didn't know much about the crude oil futures contracts on the New York Mercantile Exchange, so I boasted to them that they could make a fortune by investing in crude oil futures before the oil crisis broke out this year."

"But later, when I gradually learned more about the situation, I realized~"