There's something about late summer that makes me nostalgic. Alright, I don't really feel nostalgic. I just feel my age. And this year, it's not only the "sports injury" (if you consider pushing a tire swing with a kid in it a "sport") in my right shoulder that has been bothering me...

But four weeks ago, my son started first grade. My second started preschool. And the baby is sitting up by herself to wing her blocks across the dining room...

I remember my first day of school rather well: My grandmother had been able to come to visit from East Germany. And I was carrying a Schult¸te, a cone-shaped cardboard contraption full of sweets and useful stuff German kids receive on their first day of school. (I had wanted a green one with lions and tigers on it. However, the only suitable specimen in green featured a silly dwarf. So my father sat down at night and painted several exquisite watercolors of predator heads, and glued them over the dwarf...)

Alright, I do get nostalgic. Especially since I am seeing more than a few parallels between my son's first day of school and mine.

For one, I belong to what the Germans call geburtenstarke Jahrg”nge... a baby boom that exploded onto the scene between 1962 and 1967. In fact, back then there were so many kids starting first grade that the dark Wilhelmian elementary school I was to enter needed to build a "temporary" outbuilding just to accommodate the first graders. There were three first grade classes... each with more than 40 children. (Today, educators like to blame low reading scores on class size if classes have more than 24 kids....)

So imagine my surprise when I took my son to check out his new school during the last week of summer vacation... and 6 mobile classrooms had been set up on the schoolyard to accommodate all the kids! (Do I need to point out they were labeled MTI... Modular Technologies Incorporated (MODT-NASDAQ), one of Brian Hicks' 1998 Taipan picks...?)

In my past letters, I have been making a case for long-term growth in overall demand. (I feel like I have to by default: Most of my colleagues in the newsletter publishing industry are so far removed from the Parents magazine crowd, the only way they notice children is when the wail of a baby from economy class penetrates to their first class recliner...)

This demand is fueled by a powerful demographic segment... the under-10 crowd. It's not only modular classrooms, educational equipment, tutorials (need I mention Sylvan Learning Centers...) books, toys (have you followed the Pokemon craze?), movies and fast-food joints that will enjoy continued demand well into the next millennium. This trend will create sustained demand for computers, software... even houses. Construction and remodeling. Storage.

Because kids grow. Houses don't, unless you periodically add a room, a porch, a converted basement. And there's so much stuff being bought for kids (and later on, stuff you need to manage all the stuff you bought), even my wife has been talking about getting a storage locker. (I have resigned myself: That yard sale she had been designating half the stuff in our basement for just ain't going to happen...)

But it's not just demand that's been fueling the current (and future) economic boom. The current wave of prosperity is just as much the result of hard work: According to a recent study of the International Labor Organization (ILO) Americans on average put in 2,000 hours of work per year. (That only means the average American works 38.5 hours a week.) The Japanese only put in 1,890 hours, Germans only 1,574 hours (that's only 30.3 hours per week!).

Only people in Singapore work harder than the Americans (2,307 hours), but according to ILO, the Yanks beat them when it comes to productivity.

Having children in America means facing the mathematical certainty of having to spend huge amounts of money... for education, college, a house in a safe neighborhood. And that money has to be earned. By hard work. And by investments yielding more than the 5% you can squeeze out of a CD. And in my humble opinion, the health and volume of the Beanie Baby collectible market provides a better indicator for the U.S. markets future than any projections of the Federal Bank.

Cordially,