The twentieth century
was rightfully named the century of war. It started
with the Kaiser in 1914 and the British Foreign
Minister Sir Edward Grey on August 3, 1914 glanced
out from his office at the Foreign Office overlooking
Trafalgar Square. There and then he made his historic
prediction: "The lights are going out all over
Europe: we shall not see them lit again in our lifetime."
Few historians picked up the remark, or the long
decline of Europe. History later proved that Sir
Edward Grey was more than right.
In the twenty-first century there were originally
no predictions. The leaders of the major nations
seemed to be preoccupied with their own countries,
and there was little interest paid to the gradually
rising commodity prices and the shift of monetary
reserves encompassing the whole world.
When September 11 happened, the American administration
began to talk in the most hostile manner towards
the so-called trouble makers. President Bush's "Axis
of Evil" speech was greeted not only with hostility,
not only with fear, but as we can now interpret,
with contempt by the majority of the international
political elite.
After all, there were seven billion people in the
world, and as CNN began to reflect of the mentality
of the inhabitants of the world, we began to notice
that the trend is not chasing terrorists, but buying
consumer goods, building hotels, starting airlines,
modernizing restaurants and basically giving a colorful
life, to some extent, to a colorful generation.
Granted, there were about 150 million trouble makers,
as we can call the lunatic fringe in the world,
and they got more than proportionate interest from
the cable networks and they have continued to make
mischief. They represented less and less of the
aspiration of the seven billion people who occupied
the planet.
There were signs that some political leaders accepted
the fact that this 150 million has to be kept in
order, that their attitude is not acceptable to
the international community. At the same time, the
feeling spread that by the economic strengths of
the leading nations in the world, including the
western world, can moderate the Axis of Evil while
maintaining the steadily increasing standard of
the inhabitants of the planet.
When Mrs. Merkel became chancellor of Germany, she
simply terminated the $180 million in annual aid
to the Palestinians. What happened? Absolutely nothing.
When the Palestinian delegation, at the invitation
of President Putin, visited the Kremlin they were
given a memorandum to sign whereby the acknowledged
the existence of Israel. When they refused to sign
they were kept waiting. Subsequently an aide of
President Putin appeared who told them they can
have free dinner at the Kremlin, look at the Kremlin,
and the following day free transportation would
be given to them back to Palestine.
What happened? Absolutely nothing.
There was, and there is, a tremendous increase in
what are called suicide bombers. The suicide bombers
basically have never been spread in the world. They
are not to liberate anything, they are not to put
forward some political philosophy. They are exactly
what they are—suicide bombers, and they are
part of the universe that the seven billion people
occupy. History will probably prove that they will
die out, disappear, and will stop hindering the
daily life of ordinary people who go out for a drink
after work, who go to supermarkets, who travel in
buses. They will disappear for one major reason.
Lack of money, and hopefully lack of TV coverage.
Remember Abby Hoffman? He died poor and forgotten.
Well, I read a book maybe four days ago, a humorous
book that said it all started in Europe. It had
a feature article of the leaders of the second world
war picturing Winston Churchill with a big cigar
and a glass of brandy saying that the British were
going through their finest hour but let's face it,
it lasted well over a year.
Coming to the twenty-first century, I have to put
it in historical perspective. It all started with
money.
I first noticed with a company called Cleveland-Cliffs.
The stock was $20. A year later the stock was close
to $180. They produce iron ore.
Now, this was in the year 2002 and the year and
a half before most American steel makers, including
Bethlehem Steel had filed for bankruptcy. Cleveland-Cliffs
owned ten percent of International Steel, the company
Wilbur Ross had put together from bankrupt American
steel makers. After it had gone public the valuation
of the ten percent was $450 million. In the year
2002 Cleveland-Cliffs market value was about $30
million and then Wilbur Ross turned around and sold
International Steel which was by then listed on
the New York Stock Exchange for $4.5 billion to
Mr. Mittal who was an Indian. And the question comes
out, how can an Indian have so much money that he
can buy in a single day $4.5 billion worth of American
steel assets?
Then we discovered that the Chinese are consuming
very big quantities of steel. That led from steel
to nickel. Nickel has gone from $3 to $22 per pound.
Recently Xstrata, a Swiss company, and Norilsk,
the largest Russian mining company, were bidding
for a Canadian nickel company, LionOre, offering
$5.5 billion.
And, the first reaction was we have to buy gold,
because if there is so much money then the value
of gold is cheap and gold did run up to almost $700
an ounce from $250. Silver from $7 to $15 and it
was not inflation hedge, it was really money hedge.
Now, what did all this mean. If the seven billion
people, and let's face it, we are all equal, if
the seven billion people all start to consume steel,
they all want automobiles, they all want hotels,
they all want hospitals, they all need money.
Then the world discovered that there is plenty of
money. In fact the world is awash with money. The
oil prices, which, of course, have gone up with
steel and other metals filled up the pockets of
the United Arab Emirates, Abu Dabi, Norway, China,
Saudi Arabia, and created what is called Super Inval
Funds that amounts to $2.5 trillion in 2007 but
estimated to run to $12 trillion by 2015.
So, there was plenty of money to finance new homes,
condos, vacation resorts, airplanes, everything
that basically people want.
No country ever elected a trigger-happy dictator.
No country ever permitted its citizens freely to
practice suicide bombing, and as the world is now
seeing, even if a country like Venezuela elects
a man like Mr. Chavez. Actually, his country is
collapsing like Cuba 45 years ago.
There have been many resort hotels in the last five
years, and the people all over the world, the seven
billion, want to go on vacations. As a result, the
number of airlines in the world, even with the high
oil prices of $65 a barrel, up from $20 a barrel
five years ago, the number of airlines have more
than doubled for a simple reason. Every airline
can fully fill up its seats at any price. The seven
billion people want to travel.
Now, to live at the level people want, and I dare
to say that I can analyze and understand how the
seven billion people living in the year 2007, but
quite frankly I am not good enough a sociologist
to predict how they will live in the year 2030 or
2050. All I can say, they probably want to live
better. Has anybody ever analyzed how much more
oil or feedstock is required when every middle class
person has a second home? Has anybody ever analyzed
how much more energy is needed when people live
to 80 or 90? I hope they do, because I am not so
far, so frankly I would, for the world of seven
billion people, that there are no suicide bombs,
no Hitlers, no communist dictators, no Cold War.
I am very happy in my house in the Hamptons, going
to Sag Harbor Theater and meeting Alec Baldwin before
the performance. I like to work. I like to write.
I don't see why I don't want to live to an age bracket
I have mentioned 75, 80, 85, 90 and further.
However, that means medicine. That means energy.
That means money.
The bright leaders of our world have finally realized
that ethanol may add a little bit to energy supply,
but besides oil there is only uranium.
Uranium actually has run up from $20 in 2001 to
$140 on the futures market in June 2007, and the
number of power stations being built defied the
parliaments of every civilized country. In China
it is government ordered, three more electric power
stations a year. In Russia the government doesn't
even discuss. Putin decided—we're going nuclear.
In Germany no dictator could be stronger than Mrs.
Merkel—we go nuclear. America is hesitating.
America is examining legal rights to legal ramifications,
but America is not any more the center of the universe.
And it is definitely no longer the center of the
energy universe. France is different. France has
been nuclear for decades, and the new prime minister,
Mr. Sarkozy, has already announced that he will
continue the nuclear power program for his country.
Granted we have problems too. There are countries
like North Korea, Iran and several others who want
to acquire nuclear weapons. Dangerous? Yes. Can
we stop it? We can try.
President Putin made a speech that we cannot go
back to the era of the Nazis when we simply bomb
a country because she develops nuclear weapons.
However, everybody is frightened of a nut going
nuclear.
Little attention was paid, and it was done to some
extent in secrecy, when the new French president,
Mr. Sarkozy undertook to form a pool of some $400
billion. Such large amounts of money could only
come from the Abu Dabi Investment Authority, which
obliged.
The pool, which is called The Uranium Pool, went
around the world actually through four countries,
Australia, Canada, South Africa and Mongolia and
purchased the current and 10-year future production
of uranium with The Uranium Pool. It was done quietly
and hardly effected the futures market in uranium,
which is listed in NYMEX in New York. It is an inefficient
market in any case.
There was also money deposited with the respective
mines to break certain future contracts with what
are called trouble making nations, so as a result,
they were suddenly without uranium production in
the coming years.
Since uranium production has to be guaranteed for
10 to 15 years to keep a power station going, the
undesirable nations, or the trouble making nations
were caught short on the uranium market. Now, they
could still get uranium on the futures market, but
that would bid up the price to $300.
No country was effected more than Mongolia, which
only has a population of 2.5 million, but a number
of uranium mines, and an increase on the open market
price of uranium to $300 was a major monetary benefit
to Mongolia. The story hit the front pages. There
was great celebration. Most working couples in London,
in Paris, in Rome, had an extra drink after work.
The fear of nuclear annihilation receded, and that
in turn effected the decline in suicide bombing.
It was like VE Day in Europe, on May 8, 1945.
The guest of honor in Mongolia, which arranged a
major celebration, was Mr. Sarkozy who engineered
The Uranium Pool.
The Prime Minister of Mongolia, who was educated
in the West, speaking in a double-breasted suit,
commented on the large gathering of heads of state
and leading intellectuals of which the Chinese prime
minister was the most honored guest, began the most
important speech of his lifetime.
He said that Mongolia negotiated with Ivanhoe, a
Canadian company, with Rio Tinto, a British company,
and a smaller entity Entree Gold, and he tried to
express all through the negotiation in his desire
to incorporate in the largest financial contract
of Mongolia's life the desire of Mongolia to be
closer to the western world and develop its country.
This process got an injection when Entree Gold announced
that the Right Honorable Michael Howard, an old-time
friend of Mongolia and a friend of the prime minister,
would become vice chairman and will be dealing with
the Mongolian matters and channel money and talent
to make Mongolia a modern nation. Quietly this British
statesman brought along confidence in Mongolia that
Mongolia is again part of the civilized world.
