Yesterday, I was watching an old World Poker Championship with the last two competitors being Jerry Yang and Tua Lam. Both were immigrants from Asia. Yang came to the US and Lam settled in Canada. When they went all in, Lam reached for the Canadian flag and Yang’s supporters started yelling USA, USA, USA. It struck me that these two guys were not your stereo typical American or Canadian and yet each was very much proud of their new homeland.

Contrast this with some recent news stories on Congress’ actions to heavily penalize people who want to renounce citizenship. The fact that Hong Kong Political leaders are being exposed as having dual citizenship which the public finds unacceptable. And recent news on Silvio Berlusconi’s anti-immigration laws that include deportation measures to throw out unwelcome EU citizens such as Romaniam Gypsies. All of this adds up to increased nationalism and protectionism in the same era of European Union strengthening and Global Trade.

Take this notion and just assume that it has something to do with the fact that there is a worldwide shortage of resources at the moment and extra people just don’t help the situation.

Now, apply that same notion to the Internet. Will there come a day when there are too many participants on the Internet? The new IPV6 standard makes sure that Billions of devices will be assured an Internet Address so on the surface it doesn’t seem like a problem. But, if you are a commercial website and you have Billions of hits a day that are mostly noise and do not result in any monetary benefit – would you be worried? There may come a day when quality of hits truly matters more than the number. The infrastructure costs will make this decision for companies.

I have been watching what I would call a compression of cost phenomen play out all over the world this past decade with Wal-Mart leading the charge by knocking off a few pennies each day on the sales price. I wondered how long could everyone keep squeezing and even in my industry of business software there have been margin reductions. Note that a lot of the squeezing was driven by large volume purchase power. Now all of the sudden, we are in an inflationary situation with the raw materials we need to make things. You have to wonder did we artificially drive the cost of everything down so lo that we created too much demand. That theory most certainly holds true for the US Mortgage market meltdown. I also have a theory that there is too much money in the world chasing too few opportunities.

I saw this as the Dot.com era ended and so many managers. VPs and co-workers I knew where off buying mountains and private jets. A lot of them spent the last 8-10 years compounding their wealth and other Bilionaires are popping up all over Asia, India and Africa. Add to this all of the old money and the baby boomers who are hitting the edge of retirement and that is a huge amount of money looking for a home on a daily basis. In my next post, we will get into some of the implications and potential opportunities this might surface in the coming years.