The greatest economic boom ever

Rik Kirkland, Fortune:

Just how red-hot is the current worldwide expansion? "This is far and away the strongest global economy I've seen in my business lifetime," U.S. Treasury Secretary Hank Paulson declared on a recent visit to Fortune's offices.

That may come as news to many Americans, whose boom-time memories are stuck in the 1990s, when Silicon Valley was the epicenter of our growth fantasies. But the fellow now occupying Paulson's old office at 85 Broad Street in downtown Manhattan shares that upbeat view. Just returned from a ribbon-cutting ceremony in the Middle East, Goldman Sachs (Charts, Fortune 500) CEO Lloyd Blankfein waves out toward the East River as he explains how the rise of the "BRICs" has altered his strategy and his travel schedule. (BRIC is an acronym Goldman coined in 2001 reflecting the rising economic power of Brazil, Russia, India, and China.)

"I helped make my career by being very disciplined about opening offices," he says. Yet in nine months Blankfein has announced or opened offices in S�o Paulo, Moscow, Tel Aviv, Mumbai, Qatar, and now Dubai. "We've never done anything close to that before," he marvels. "The week before Dubai, I was in Turkey, and before that, Russia and China. I'm really living the BRICs-plus-Middle East kind of life."

These days more and more CEOs are livin' la vida BRIC. GE's (Charts, Fortune 500) Jeff Immelt devotes 12 weeks a year to foreign travel and is looking for his company to grow "twice as fast outside the U.S. as inside - 12% a year, vs. 6%." Immelt expects to see even more robust growth - 20% a year - in emerging markets, which last year accounted for $30 billion of GE's nearly $170 billion in sales.

John Chambers, who last fall opened Cisco's (Charts, Fortune 500) new Globalization Center in Bangalore, seconds the notion that "this is the strongest global trend" of his career. "There is a unique balance today," he says. "More than half of GDP growth is coming from emerging countries. And yet the developed countries are also doing pretty well. It is something we have never seen before."

At Boeing (Charts, Fortune 500), Jim McNerney and his team, just back from the Paris Air Show, have booked 634 firm orders for their new 787 jet, which they will unveil in Seattle on 7/8/07 (ah, marketing!). That's more than for any launch in industry history, and thanks go "predominantly to Asian and other emerging-market buyers," says Laurette Koellner, president of Boeing International.

While the current pace isn't quite a record - according to the IMF the world grew at a 5.4% average annual rate from 1970 to 1973, vs. a projected 4.9% from 2003 through 2007- there's really no contest. When our ties were fatter and we were thinner, total world GDP was $13 trillion in constant dollars. Today it's more than $36 trillion. Not to mention, as investor Jim Rogers notes, "there are three billion people in places like Eastern Europe, Russia, India, China, and all of Asia who weren't participating last time around but who now are." Back then, Germany and Japan led the charge. Now the emerging markets are running fastest, along with Europe, which has - for the first time in years - pulled ahead of the U.S. in GDP growth.

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Not mentioned is what a strategic defeat this is for al Qaeda which had hope to win by crippling the US and world economy and there by make it impossible to sustain a defensive war. Unfortunately, it appears they may achieve their objectives with the willing political cooperation of the Democrat party in spite of their strategic defeat on the economic front.