I began traveling the world, and essentially being permanently homeless, for many reasons but one of the key reasons was education.

I have never been the kind of person who can learn in a classroom.  Sitting on a hard wooden chair while someone read to me seemed imbecilic.  Not to mention, 9 times out of 10, that person reading to me is trying to 'teach' me because that was the only job they could get because in the real world they couldn't actually do it themselves.  As it has been said, "Those who can, do.  Those who can't, teach."

I would much rather learn through reading books, the internet and actually just going and doing it.

So, as a person interested in business and investing, I knew that in order to really understand the world of business and finance, completely, I needed to have a very good understanding of the world.

This doesn't mean just knowing the capitals of every country, or the economic statistics of each, but going to each country and getting a feel for who the people there are, what they think and why they think that.

So, rather than just read an Atlas, or an Encyclopedia, I just hopped on a sailboat, train, car, airplane or other modes of transportation and just headed out.

All that I have written so far is just a lead-in to my first experience in Ecuador.

It was July 11, 2005, and I had just spent the previous week in the truly fabulous city of Bogota, Colombia (more on Bogota and Colombia in upcoming blog entries), and I had decided that evening that I would head south the next morning.

A quick check of the internet before bed showed me that there was a flight on Avianca Airlines the next morning going to the next country south, Ecuador.  I was very tired after a long night and quickly booked the ticket, then went to sleep.

In the morning I headed to the airport, still somewhat un-awake, and walked up to the counter.

The man at the check-in asked me, "Which country are you going to?"

My brain churned.  Having been in El Salvador, Costa Rica, Panama and Colombia in the past two weeks alone, the name of the country of next destination eluded me.

Reaching deep into my grey matter I pulled out, "Uh, Uruguay?"

He looked at me with consternation, "We do not fly to Uruguay."

I gave a blank stare as neurons finally began to fire, obviously slowed from one too many fine, sipping tequilas the night previous, I proudly announced, "Oh, pardon.  Ecuador."

But my adversary spotted weakness and was not going to let me off the hook so easy.

"We fly to Ecuador.  Which city?"

He had me.  Checkmate.

In my rush to book the ticket I hadn't even really paid attention to the city name.  And, sadly, I did not even know the name of the capital city of Ecuador, the most likely destination.

I shrugged, apologetically, "Can you name a few?  Maybe I'll recognize the name?"

So began my trip to Ecuador.

It turns out I had booked a flight to the capital of Ecuador, Quito.

Quito is situated nearly 3,000 meters above sea level, making it the second highest capital city in the world by elevation, and is home to 1.4 million people.

Only 15 miles south of the equator (Ecuador means equator in Spanish), Quito has a fairly constant temperature all year round, but due to its extreme elevation, you may be surprised, as I was arriving in my shorts and sandals, that its average temperature is a high of 20c and lows at night averaging 10c, making for many chilly days and evenings.

As you can tell from my prologue, Ecuador really never showed up on my radar screen from a personal or investment viewpoint before this trip.

Sadly, I wish it had, and I wish I had invested in Canadian junior mining explorer, Aurelian Resources (TSXV: ARU) at the time I was in Ecuador.

As many now know, and certainly many on StockHouse know, Ecuador became this year's hottest mining area after Aurelian Resources announced results from it's Condor Project in southeastern Ecuador on April 5th of this year, showing over 230 meters of 4.14 g/t of gold and 8.5 g/t of silver.

It's stock, which had previously been in the pennies, shot up to $3 and has never looked back, currently trading above $30 per share.

This seemingly major discovery, that has some analysts speculating at above 7 million ounces, has spawned the good old fashioned area play as every Inc., Corp. and Llp. jockeys for position in a corporate style mosh pit of joint-ventures and staking.

Some of these companies currently include: Plexmar Resources (TSXV: PLE), Oromonte Resources (TSXV: ORR), Dynasty Metals & Mining (TSXV: DMM) and Lateegra Gold (TSXV: LRG) to name just a few.

Ecuador has also made headlines in the last few years for numerous issues in regards to the oil sector.

Fuelled by government corruption, many Ecuadorian natives have lashed out at the oil industry, resulting in numerous demonstrations, clashes and protests, sometimes bringing oil production to a complete halt in various areas.

Sadly, many believe that the problem is the oil companies taking all the wealth of Ecuador and leaving the majority of Ecuadorians in poverty.

The true problem, as is almost always the case, is the government itself.  The government takes bribes and kickbacks from the oil industry in return for protection via its army and, in so doing, enables the oil industry to abuse employees, pay unfair wages and lay waste to the environment.

In a completely free market system, oil companies would have to compete with each other on a fair basis as there would be no government to bribe in return for payback, thereby necessitating fair wage and employment practices or else risking loss of employees to competitors.

If the government were removed completely, then all land would be privately owned, thereby enabling the owners of the land to charge or lay claim to the oil companies if they damage the environment.

This would also solve the issue that some native groups have with not wanting the oil industry in their homeland at all.  If the natives owned a certain amount of land, in a free market system, they would have every right to turn down prospective oil companies from offering money in return for use of their land.  They would only do so at whatever price, if any, they deem to be fair.

Sadly, many of the major problems in the world today are not because of globalization and big business, but instead all have their root cause with the system of government.

The whole world would do well to ignore most of what they are taught in government run schools (where it pays them to keep you as ignorant as possible about the workings of government) and to read one of the most important books in the history of man, and a book that every government and bureaucrat would do almost anything to conceal, "The Market For Liberty" by Morris and Linda Tannehill.

Which brings us to the so-called "important" current election in Ecuador.

The first round of the latest popularity contest (election) was held on October 15th and has gone to a run-off which will be held on November 26th, between Alvaro Noboa, one of Ecuador's richest men and Rafael Correa.

The election, as with most, isn't really all that important as no matter who gets elected, the amount of corruption and ineptitude which is guaranteed with any government, will go on.

And, despite what most media state, neither candidate can really make any major changes, despite the rhetoric.

As example, Rafael Correa is depicted in western media as an America-hater nationalist who wishes to tear down the government and start again from scratch.  He is also said to be in favor of nationalizing major industry.

To begin with, tearing down almost any government is usually the best possible thing you can do so I can't see any problem there.

Probably his biggest fault is that he actually went to school and got a doctorate in economics in the USA.  Despite America's supposed capitalistic leanings, it's economic schooling is so socialist it is almost beyond comprehension and if he has spent a few years being spoon-fed unworkable Keynesian theories on economics, who knows how twisted his mind has become.

But even with his embarrasing American university "education", this still will not allow him to turn Ecuador into a socialist, non-free market state.

For starters, the last century actually had some positives as it showed the entire world, with only imbeciles excluded, that a free market capitalist system is eminently more productive and destined to success than a centrally planned economy, which the Soviet Union, and to an extent China, showed dramatically.

Because of this, despite whatever rhetoric anyone such as Bolivian President, Evo Morales, or Rafael Correa state, they know that the second they even try to nationalize any major industry, their country is doomed to failure, sometimes as quickly as overnight, as many basic needs such as electricity and water can evaporate very quickly once the free market companies offering these services get the carpet pulled from underneath them.

Politicians are many bad things, but one thing they aren't, George W. Bush excluded, is stupid (when it comes to getting what they want).

Their sole goal is to stay in power so that they can bilk the country for as much as they can for themselves, their friends and family.  In order to stay in power, they therefore need to keep as many people as possible only happy enough to not vote/kick them out of power, and in order to do that, they cannot "nationalize" any major industries as they know this will lead very quickly to very bad conditions.

The only two countries that have still stayed the course, even despite all the mounting evidence that socialism/communism is a system that does not work, are Cuba and North Korea, arguably led by two of the most delusional and mentally insane people on the planet and they are both heading very quickly to an end.

Therefore, this upcoming election in Ecuador really does not matter, as most elections do not really matter, in the grand scheme of things.  The problem is government itself, not which party/personality is at the controls.

In terms of it's economy and it's future, Ecuador's government stated GDP has grown at 4.9% on average over the last five years.

It's economy is dominated by petroleum, which accounted for 40% of the country's export earnings and one-third of government revenues in recent years.

However, it's oil sector will need continued private equity infusions in order to maintain it's levels of production, a fact that Rafael Correa is no doubt aware of.

The country, similar to El Salvador (see last week's blog for more), also made the US Dollar it's currency in 2000, which has had some short term benefits but in the long run is monetary suicide as the American Dollar continues on its fast train to the trash heap.

In the end, Ecuador, with its small population of 14 million, is a fairly small, picturesque country with numerous ecologically fascinating environmental treasures, least of which are the Galapagos Islands.

It's economic future, in the near term, will almost certainly rest with the petroleum industry, although a few small Canadian companies may have put Ecuador on the map in terms of mineral production.

As stated above, I don't consider the political risk to change much, no matter who is elected, but Chavez-esque grandstanding by Rafael Correa could enable some buying opportunities in Aurelian Resources, or its throng of me-too's, between now and the run-off election at the end of November.