Notes

William C. Goodwyn, PDG

January 31, 2008

The journey around the world included

61 ½ hours in the air…..

33,000+ aviation miles…..

15 take-offs and landings…..

4 continents…..11 cities….

mystery meals we had no idea what we were putting into our mouths…..opulant five-star hotels….. luxury coachs ……

and some of the most incredible conditions of poverty and misery on the planet.

We began our journey october 4^th traveling from L.A. to Anchorage….and The next morning…… began our airborne adventure which followed the Aleutian Islands…..

just south of the Kamchatka Peninsula…..

landing in Sapporo, Japan….

After a decade of flat growth…..

Japan’s economic turnaround has been significant… and the switch from contraction to expansion has been dramatic. 

It’s the world’s second-largest economy…..

and third-biggest consumer of oil. 

Tokyo’s skyline is sprouting more than 160 new high-rises……

which are consuming huge amounts of steel…. copper and energy……and they are scrambling to build 13 new nuclear plants.

we crossed the sea of japan to our next destination….Seoul….. south korea.    Seoul is a modern city of 15 million people….. expecting to grow to over 20 million in the next few years…..

and they are packed into this hilly region like sardines. 

Nearly half a century ago……Korea’s per capita income was just a few hundred dollars a year.    Today their per capita income is equal to or probably higher than that in the United States.

South Korea……Asia’s third-largest economy…..

has almost no natural resources. 

Just weeks ago……Seoul said it would go on a
$5.6 billion shopping spree for copper…..oil…..gold and uranium.   they could have bought twice as much with that money just a few years ago!   that’s because in the past five years……

oil prices have tripled…..copper is up fourfold…

and uranium is up tenfold.

Wherever you looked…..there were high rise clusters of apartment buildings.   by clusters….

i mean easily 20 to 30 buildings together…..

all high rise…..and all looking just alike.  In many areas……

those small apartments are priced at $1M and above.

The traffic is as bad/or worse than L.A.  and you don’t see many older cars and trucks on the road.

we visited the world’s largest church. 

The Yoido Full Gospel Church started in a tent with 5 members in 1958…and today…..under the leadership of Dr. David Yonggi Cho….. 

has a membership of more than 750,000. 

They have 10 services each weekend with 60-70,000 people at each service.    At the service we attended…..

they completed the communion in 7 minutes…..

took up the collection with 200 ushers…..

and had three full choirs accompanied by what looked like a symphony orchestra.

it’s the only church I’ve ever seen that has its own bakery for the communion wafers…..

and where the people actually rush in to get a seat. 

have you ever been to a place of worship where the people actually rushed in to secure a seat?

we continued on to Hong Kong crossing over to the mainland where we spent several nights in Shenzhen.   During those few days we also traveled to Guangzhou which used to be known as canton.     Both of these cities…..(about 45 miles apart)….

are in the Canton Province which the PRC dedicated as an enterprise zone….to create their own form of communist capitalism.     It seems to be working.      Those two cities are arguably two of the largest cities in the world…..

and most of us had never even heard of either.    

Each has a population of 15-20 million…..

and neither city was even there….25 years ago. 

Driving in the region is like driving through downtown Atlanta or L. A….or Century City….with high rise buildings….. non-stop….

for hours.  Most of the buildings are new…..very modern…

are lit up like Atlanta at night…..

the cars on the road are relatively new….

and the people are relatively young.

interesting that you can’t hook up to the internet in your hotel room…..but can only connect in their “business center”.

China now consumes more grain…..meat…..coal….. steel…..copper…..cement…fertilizer….cell phones and refrigerators…..than the United States.

The growth rate for diamonds is 20% a year.  Jewelry……especially diamonds……is now the third leading consumption item after housing and cars.

the elephant in the room…..though…..

is that with 1.3 billion Chinese…..the country has few raw materials to support them. 

Today…….China’s rapid growth threatens to take control of the  U. S. economy…….and could turn your dreams of a secure future into a nightmare.     they have become……almost overnight…..

the second-largest importer of oil.  Imports of aluminum….. copper…..and iron ore…have risen from 7% of world demand to 40%.   they are on a massive grab for resources of every type.

The downside of this is that power cuts effect 24 of China’s 27 provinces almost daily.    Coal ouput rose only 5.4% last year…..

and electricity generation is rising only 13%....... threatening to literally unplug this remarkable growth. 

That’s why they are planning to build 60 new nuclear power plants right now.  Nuclear power contributes just 1% of their current    needs……compared with 22% in the U. S.

when we left china…..we traveled south to sinapore…. where we spent several days.    what a place!   modern high rises….people who are polite….. friendly…..and where they fine you $500 if you chew gum…..or execute you in 7 days if you’re convicted of trafficking in drugs.   

Less than 50 years ago……it was little more than a fishing village. 

Today…….. it is the most crime-free nation on the planet.       There is no poverty.    the skyline is filled with towering buildings. 

Every ninth car is a Mercedes Benz.   oh!  forgot to mention…..

this amazing country has few natural resources.

delhi was our next stop for several days…..

and we knew it was going to be a challenge…..

when we couldn’t see the ground….in broad daylight……

except moments before we landed…..

because of the smog…..dust…..and dirty air.

it proved to be a cultural shock to everyone in our group…..all  very experienced travelers…

but  none were prepared for the incredible crush of humanity that existed every waking moment.   

no mechanical or foot-powered vehicle moved without constantly sounding its horn;  

Delhi is another city of 17 million people and they expect to hit 20 million in three years. 

they currently don’t have the infrastructure to support 17 million today…

so if you’ve got a moment ..…..

think about  how they’re going to accommodate 3 million more in the next three years.

india’s population in now more than 1.2 billion…..

and 94% of them are hindu’s.   the reason i mention that…..

is that the rat population consumes more than 50% of the grain crops produced each year throughout the nation.   rats and cattle are protected by their religion.

you’ve all read the extensive coverage in the l. a. times…..at least 5 lengthy articles…..

about the terrible chaos and mayhem currently taking place in kenya.   and in all that verbiage….. not a single word has been printed referring to the islamic encroachment…..

which is the real cause of the violence. 

raila odinga….the so-called opposition candidate…

never considered presidential material…..

has been supported with american petrol dollars…

coming from islamic countries outside of kenya….

who will stop at nothing to gain a muslim foothold in sub saharan africa.    Add to that the thugs and gangs who have entered into the country from somalia and the sudan…..specifically to stir up long-standing tensions amongst the two predominant tribes…..which have lived in peace for decades.

After a stop in cameroon for several days…..

Our trip took us north over gibralter…..

into madrid…..and on to edinburgh for a few days.  the delay in cameroon placed us into edinburgh so late that they closed the airport and we had to divert to  glasgow…..busing back to edinburgh.      and finally…..we returned through bangor…… atlanta……and back to los angeles on october 25^th.

the sights…..sounds…..smells……and everything that you experience on a venture like this can be overwhelming….but i want to leave you with several thoughts that made the biggest impression on me.

we live in a large country and the distance between boston and los angeles is around 3000 miles give or take a few hundred.   putting things in  perspective... you could take a map of the u.s….

placing los angeles over nairobi….. boston over delhi…..and with hundreds of miles to spare…. our entire country would fit neatly into that little corner of the world.

i spent a fair number of years in the wealth and investment management business…..

and frequently spoke about the “pacific rim” as an economic “force”  “out there”. 

problem was…..i had never been there.

after seeing seoul…..hong kong…… shenzhen…..guangzho…. southern china…..singapore…..delhi….and their tens of millions of citizens…..all with economies growing at 8 to 11 %.....

you simply can’t believe this……until you see and experience it.

Judi and I have traveled pretty extensively around the world……..and the more we travel…..

the more we realize that the United States…..

is not the center of the universe. 

Asia is clearly becoming the Center of the World… with China…..India…..and Indonesia having the largest populations…..

that will drive the global economic growth over the next 20 – 30 years.   

Why is it that the best hotels today are in Asia?

Why is it that the most booming economies in terms of growth are in Asia?

Why is it that Asians score the highest in math and science?

Why is it that the highest literacy rates are in Asia?

The two University of Georgia students selected this year to be Rhodes Scholars at Oxford….

are Asians.

the american public has no clue what’s on the other side of the pacific and the impact it will have on our way of life and standard of living.   let me attempt to summarize why we should all be very concerned.

Mercer Consulting and The Economist’s recently published their worldwide Quality of Living Surveys for all major cities and its easy to identify the Have nations……..and the Have Not nations. 

The Have’s are most countries identified with the West……while the Have-Nots include North Korea…. Pakistan…Iran….Iraq....Russia…..India…Venezuela….

Bolivia…China….Indonesia….Croatia….Turkey and many others in the 2/3rds world.

There are many who would say we’ve been engaged in World War III since 9/11….between the Haves and Have-Nots.

Make no mistake……this world war is in full swing in Africa….

the Middle East…..Russia……and South America has just engaged.        Its them against us.

Let me give you an example.  Nearly 200 million pounds of uranium is needed this year…..to keep the lights on in France…..China…..the U.K……and the U.S.    But only 100 million pounds will be mined. 

Uranium prices are already up 890% since their lows before 9/11.

Oil used to be a commodity traded in a period of rational supply and demand prior to 9/11.    But now its being used as a weapon. 

The use of oil as blackmail now extends from Putin in Russia……

to Chavez in Venezuela…Morales in Bolivia…..

tribal chieftains in Nigeria…. and Ayatollah  Khamenei in Iran.

Many would argue that this world war  between the Haves and Have-Nots…..creates a situation where the Have-Nots…..

by definition…….have everything to gain…..

and that makes them incredibly dangerous. 

As one advisor has pointed out…..

the front lines will not be the financial institutions…..

but the mines…..and the means to transport commodities.

A well-known military analyst painted a grim picture for the doubting thomases. 

Every seven minutes…..a fully-laden double-hulled Suez-rated super tanker passes at 14 knots through the eight-mile wide Straits of Hormuz.  Imagine moving Catalina 2/3rds closer to Long Beach……and that’s the size of that body of water.  We just flew over the Straits on our trip…..and I can tell you from 37K feet altitude…..it looks like a tiny ribbon of water.

One well-placed missile delivered from a shoulder-holstered Russian-made missile launcher…..would destroy that tanker…..

and block the Straits for a month or two. 

Oil futures could double in seconds.

The Have-Nots want electricity. 

It’s step One in joining the Haves. 

And if you want to turn on the lights…..

you’re going to need copper.    Lots of lights……mean lots of copper.     Incidentally…..China has almost NO copper. 

Take a look at satellite photos of China taken at night…..and you’ll be amazed.          The great land mass representing at least 80-90% of the country……is totally black in the photos …… whereas the areas along the eastern and southern borders….are brightly lit…..where they have electricity.

Water covers 70% of the earth’s surface…..

yet only 1% is drinkable.       Water is the next frontier in the war between the haves and have-nots.     2/3rds of the world’s population….may have to abandon their lands by 2025….due to chronic water shortages.     Maui….some areas of SoCal….

and parts of FL are even in danger.

Every new baby requires an extra 5.25 gallons of fresh water a day for the rest of its life.  That’s a lot of water. 

Multiply it by a billion…..and you’ve got a problem. 

And domestic use of water only accounts for 8% of total demand.    

Everywhere you turn…..we’re running short.

We are no longer living in an Age of Abundance.

One hundred years ago……Americans used as little as seven gallons of water a day.       Now we use 145 gallons a day. 

Water promises to be…to the 21^st century…what oil was to the 20^th.       the most precious commodity.

Ben Stein recently said…..Every morning….

I get up…. get out of bed….. get on my knees…..

and thank God for waking up in America.

are we….as a nation…..prepared for the war….

in which we’re already engaged? 

or have we sunk into complacency….ignorance…