1. 05-12-2006 Pg 1 Dr. George Friedman CEO, STRATFOR Energy Executive Insight Session Ernst & Young September 23, 2009 1 512 744 – 4300 www.STRATFOR.com Info@STRATFOR.comwww.STRATFOR.com

2. Pg 2 Three Major Thrusts of the 21 st Century Dramatic decline of birth rates Emergence of technologies to compensate Growing power of the United States

3. Global Decline of Birth Rates Urbanization makes children conspicuous consumption Industrialization expands period of education to mid-20s Expansion of life expectancy creates 15 year retirement 50 percent of life spent being non- productive Pg 3

4. Technological Solutions Medical extension of productivity Robotics Dramatic increase in energy consumption driven by robotics Solutions –Non hydrocarbon energy sources –Space-based solar power –Japan’s Mistubishi just created major consortium –NASA project DOD project –Geopolitical solution –Battlefield solution –Fits into U.S. model of R&D Pg 4

5. U.S. is the Dominant Power 25-30 percent of global economic activity Net worth of about $339 trillion Industrial output equals China and Japan’s combined Control of the world’s oceans Control of space Pg 5

6. China Third world country of 1.3 billion people –600 million live in households less than $1000 a year income –440 million $1-2,000 –200 million $2-20,000 –60 million over $20,000 40 percent of GDP NPL Low rate of return on capital Economy hostage of the west Military trapped by geograpy Pg 6

7. Other Countries Russia temporarily emerging but unsustainable Europe fragmented India fragmented bureacratically and regionally Pg 7

8. Three Major Powers Eurasia hollowing out, new powers on the periphery Japan—2 nd largest economy Turkey—17 th largest economy Poland—18 th largest economy Fourth power emerging later in the century—Mexico, currently 13 th largest economy Pg 8

9. Problem of the Moment: Iran Long term threat as nuclear power Israel promised crippling sanctions: gasoline embargo Russians have blocked it and are backing Iran Israel feels there won’t be a better time to act Iranian response will be to mine Straits of Hormuz Disastrous impact on economy Pg 9