I'm posting because it's one of the very first results for static and Arduino and I feel the OP didn't get a 100% correct answer.
michael_x:
"always be running" might be a bit misleading you:
Sure you may call other functions from loop, and after returning from there, your code executes just the next line.
But loop() ends at the bottom (or with a return; statement), it is just (rather soon) restarted again, and all local non-static variables are created from fresh.
Well, if the OP doesn't use a static variable, he won't declare it in the loop. In that case, it will retain its value.