• The demographic explosion
• The worldwide availability of modern technology.

Of course, I speak of the commodity market of the next 20-40 years. The event that has triggered the official beginning of this phenomenon occurred in the summer of 2004, when the price of crude oil penetrated a forty-year old top and broke above $ 45, and has been undeterred since that time.

The price of hard-assets-those things that are non-replaceable (commodities such as oil and natural gas, gold, silver, copper, etc.)-will continue in an upward direction for longer than we would ever believe possible. The price gain will be in multiples of ten times rather than in doubles, as we are used to from past commodity markets. Again: unprecedented.

Why is this going to happen? (This is not "it might happen", this is "it is going to happen".)

We've already spoken of the demand. In the past seventy years the population of the Earth has exploded from one billion to six billion people. This is an unprecedented event. (I use the word again, because it applies.) Modern technology has brought cell phones to people-hundreds of millions of people-where there is no telephone line for 500 miles. The Chinese and much of India are skipping the 20th century. They are jumping from the 19th to the 21st century in one bound. The same thing is true of satellite television. There are people who have generators for electricity, with dishes on their roofs, where there is no TV station, no cable, no electricity. Yet they still see the same images that you and I see every day. We have a case here of once anyone is exposed to advertising, they want it. Once you see it, you want it. Tell me that you would give up your automobile and never drive another car as long as you live. You will begin to understand why what I say here is going to happen.

Now, let's discuss some of the things that have already happened.

• In the last 12 months, China has rescinded the one-child-policy. There will be a renewed boom in the Chinese population.
• China announced an 85,000 km six-lane super-highway nationwide system to be completed in thirty years. Many of the individual provinces are spending $ 600 million a year on what we would call state highways.
• They have announced another 30-year-program where they will build 25 major atomic-powered electrical facilities.
• They have announced the beginning of seven hydroelectric projects. They already have the Three-Gorges-Dam, the largest source of energy this side of the sun. When is the last time the United States, or Canada, built a major hydroelectric project? You can't even remember.
• They have just completed the Shanghai-Tibet railroad. An 11,000 km line runs from Shanghai to the highest elevation that track has ever been laid, on top of the Tibetan Plateau, in far south-western China. This railroad wanders where the rivers don't go. It is similar to the Union Pacific railroad-in this country-in the late 1800s, that connected both coasts. But there is no ocean in Tibet. However, there are vast natural resources that are as yet undeveloped. The obvious purpose in the interim is to service all of the small agricultural projects. The reason for the terminus on the Tibetan Plateau is the ultimate development of the natural resources. They are looking far into the future. They are the only economy in the world that's doing that.
• Recently-in fact just yesterday-a big Chinese oil producing company announced a $ 2.7 billion purchase of a Nigerian field. It will require at least that much more money to develop it. (You noticed that they are buying oil rather than fighting over it.) The biggest oil deal in the world was cut by China almost three years ago and went totally unnoticed. I have discussed it on many occasions. It still seems to evade the media.
• India has announced a new gas pipeline from Iran. This will also be part of the transportation system that brings the 115 million metric tons of natural gas per year from Iran to China. This deal was signed by China about a year ago.
• The Chinese automobile manufacturing industry is in full swing. In the fall of 2007 Chinese imports will begin to this country. Then will be the full-blown effort of the biggest company in China. Minor imports have already been announced. They will make 2 million cars for internal consumption this year.
• The aircraft manufacturing industry is just being born in China with the announcement of the first 737 size and type aircraft to be built inside the country; no outside parts. China announced that they will kick off 5800 new airline flights over the next year. Before 2010, they announced, they will need 20,000 new aircraft.

I think you may be beginning to get the picture. The wave of consumption over the western horizon is so large that it is almost impossible to imagine the size. We suffer from "NAM" (North America Myopia.) If you, as an individual, suffer of this disease, it will be detrimental to your portfolio. I suggest that you take the cure for it, and do it very, very soon.

Let's discuss some specifics:

I want to precede these with this statement: if you disagree with this article, I suggest that you keep it. I will list here some intermediate price goals for several commodities. You won't remember those. All you will remember are the ultimate numbers, which I put on the far right. (And you won't believe those numbers.) But keep the article, and when the numbers on the left are achieved, you may begin to believe what is said here. Because this is what is going to happen, and it has already begun..

Here the numbers:

Remember, these numbers are from the guy who said:

Buy oil @ 12 24 &46
Buy NG @ 2, 3, 4
Buy gold @ 280, 350, &450
Buy Silver @ 4, 5, & 6
Buy copper @ .95, 1.35, 1.50 1.80

Would you rather believe somebody who has already been right or someone who failed to tell of the top in 1999-2000?? You choose.

The rise in these prices will soon be joined by the soft commodities.

The rise will be stunning!!

In US$ it could be astronomical, because US dollar weakness will exacerbate the problem.

I urge you to listen to these words and profit. If you disregard them - you will pay the price…

ZAPATA GEORGE
www.zapatageorge.com