We are witnessing the greatest wealth shift of all time — from industry to mining and agriculture, from the traditional industrial power centers in the West to new power centers in the East and South, and from paper assets to hard assets.

Mother Earth is exposed to the following megaforces:

1. The global population explosion and rising incomes are fuelling a parallel explosion in the demand for resources, which is bullish for commodities like grains and energy.

2. One thing is certain: we are constantly exposed to changes — and the biggest change of them all is "climate change” — the cause of "global warming.” Global warming causes extreme weather patterns, which threaten to destroy a larger portion of the world’s crops with floods, droughts, and other disasters. The picture is especially bullish for slow-growing plantation crops like cocoa, coffee, rubber, palm oil, and Jatropha. They take 5-7 years to grow and supply cannot be increased overnight. After 40-50 years they must be replaced, like 50% of all tea plantations in Sri Lanka or cocoa plantations in the Ivory Coast.

3. The housing bust, the mortgage meltdown, and the credit crunch guaran­tee a US recession, which is, I say, very, very bullish for commodities. A new upward cycle will start one day and demand for raw materials will increase likewise.

4. Massive money pumping by the US Federal Reserve, which results in a devaluation of paper money and a trend towards hoarding hard assets. Consequently consumer prices will rise like never before, all of which is very, very, very bullish for commodities.

5. Keeping it real: the global transition from paper to tangible assets is just getting under way. With the Federal Reserve and other central banks pumping so much money into the financial system, yet getting rather muted economic results, many investors are debating whether inflation or deflation will ultimately prevail. We think that inflation and deflation can in fact coexist as a new economic paradigm. This economic environment shows moderate economic growth and an underperformance of traditional paper assets, like stocks and bonds. Commodity prices, however, will soar, along with real asset values. Agricultural commodities and farmland are doing well in such a scenario, while US stock and bond returns are lagging. This is a structural shift away from the regime ofthe past 30 years, in which paper assets have outpaced real assets 5 times over. The 1970s were particularly painful because stagnating growth was accompanied by high inflation and extremely high interest rates. Today’s new environment is different. There is not the same pressure on the Federal Reserve to hike rates as there was 30 years ago.

6. Food crisis. I think we are at the verge of a serious food crisis in many parts of the world. The question is not how we are going to provide food for 9 billion people in 2050, but how we are feeding 7 billion people today. This book is not about "first-generation biofuels.” It is not about palm oil, soybean oil, rapeseed oil, and corn. These staple crops should remain reserved to feed humans and animals, and not be used for energy purposes. This book is about the second-generation biofuels, which do not grow on agricultural land and which do not compete with food.

7. It is my view that commodity-based, resource-rich economies will continue to do very well. Among them: powerhouse Brazil (where there are 4-5% real yields currently), Canada, Turkey, Chili, and Southeast Asian nations, like Indonesia and Malaysia. We predict a continued US dollar depreciation of 20-40% over the next decade. It will be a broad-based natural devaluation against all currencies.

8. African nations will supply China with oil and copper, and Europe with woodchips, palm kernel shells, and electricity. Angola, Nigeria, and Somalia are big oil suppliers, and China already has a big presence in Africa and invests in the complete value chain, from oil drilling to copper mines. Wood waste from Nigeria and Ghana will be compressed to woodpellets and shipped to Europe. The Sahara will become the largest solar center in the world to supply electricity to Europe.

9. The protein play. The next 10 years should underscore the shift to real asset investments that began around 2000. In particular, as more emerging economies like China, India, and parts of Latin America "consume” their way toward growth — rather than export — their diets will include more protein, intensifying the need for both food and feed and alternative biofuels. Call it a "protein play.” At their spending peak, average US citizens were consuming $1.60 of goods for every $1 of income. In contrast, Brazilians consume just $0.35 for every $1 of income and Mexicans, $0.60. As emerging-market consumers spend more of what they make, upward pressure will be put on agricultural prices, as well as increasing the value of farmland.

10. This shift toward commodities means that power and capital will move not only from West to East but from North to South as well. Asian nations such as Indonesia, Malaysia, Singapore, and Thailand, South American countries such as Argentina, Colombia, Chile, Uruguay, Australia, and Brazil will do very well and their currencies will remain strong. The classic ingredients of rising consumer demand, a demand for sustainable energies, tight supplies, and monetary inflation are all coming together at once.

11. Stringent EU carbon regulation today affects 11000 major polluting industries in Europe, such as the mining industry, power plants, cement, paper, chemical industries, and airlines. These carbon dioxide emitters either keep on polluting and will be forced to pay for their carbon emissions or they will introduce clean renewable energy in their boilers to cogenerate energy and lower their carbon bills. Unfortunately, Europe does not produce enough waste that can be recycled.

So the feedstock for woodpellets, agripellets, woodchips, and so on, must come from non-traditional sources like the United States, Africa, Russia, Africa, and Asia. As you read this Introduction big long-term supply contracts are being signed between buyers and sellers. The sellers did not know that their “waste” was a gold mine and are now happy to discover that their waste is worth a lot of money. Smart buyers are happy to secure long-term supply chains and cofire coal with biomass.

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