Fool writer Seth Jayson and I grew up in the same town in northern Minnesota, in a region known as the Iron Range. The whole economy hinges upon iron mining, and for most of our lives, iron mining has been a lousy business. It wasn't like everyone lived in poverty, but people sure weren't rich like city folks, either.

A few years ago, Seth and I were having a beer in a backwoods bar, admiring a huge northern pike mounted on the wall. The guy sitting next to us said, "Yeah, I pulled that fish through the ice back in 1981. Caught her with a homemade lure. You remember how it was -- no one had any money, we couldn't even afford bait. I'll tell you, that was the worst-tasting fish I ever ate. Tasted like Styrofoam. Yep, we ate that fish for three weeks."

I guess the most recent recession began in the early '70s, when gas prices started rising. American car manufacturers started losing business to Honda (NYSE:HMC) and Toyota (NYSE:TM). Then the big American steel producers like Bethlehem started losing business to recycling mini-mills such as Nucor (NYSE:NUE). It didn't get any better -- as a fellow Iron Ranger, Bob Dylan, put it: "They say your ore ain't worth digging. It's much cheaper down in South American towns, where miners work almost for nothin'." Foreign competition from companies such as Brazil's Companhia Vale Do Rio Doce (NYSE:RIO) took their share of the business, as well.

Years passed, and times were always tough. When people talk about the prosperity of the 1980s, I don't know what they're talking about it. We were living in a land that the world economy left behind. I remember advertisements for the Apple Mac and Atari's video games, but I don't remember many people having them.

The American automotive loss of market share to foreign competition, increasing foreign ore supplies, and recycling steel continued all the way through the '90s, and things stayed pretty tough until the end of that decade. Jobs were lost, mines were closed, the unions went on strike, and the population declined. Most kids left the Iron Range as soon as they graduated from high school, never to return.

Meanwhile, in China, India, Eastern Europe, and Russia, people were building power plants, roads, cars, cranes, and wireless telephone towers. Hundreds of millions of people entered the modern world and began consuming copper, oil, and steel.

Then, after 25 years of hard times, something remarkable happened. Prices began to rise. Chinese companies began buying abandoned mines, re-starting production, creating jobs, and bringing prosperity back to the Iron Range. Most folks had forgotten what it was like.

And there it is, one of the Big Lessons for 2006: supply and demand as it applies to commodities. When times are good and you have the iron mines, you can charge premium prices -- as long as the economy booms. It takes a long time for alternative supplies to reach the market and for higher prices to spur the type of innovation that created the mini-mills of the '70s. Therefore, the strong pricing cycle is likely to remain in place for several years.

When I look at the world, I don't see anything ending the current boom very soon. Twenty-five years of minimal investment is not corrected in five years. Dormant mines need to be reopened. They need to buy new equipment from Caterpillar (NYSE:CAT) and Bucyrus (NASDAQ:BUCY). And the current lead time for new equipment approaches two years.

If you want to own your own piece of the Iron Range prosperity, you can buy shares in the Mesabi Trust (NYSE:MSB). It's up 36% in 2005 but still yields 8%, and I reckon it's a pretty good bet if ore prices remain strong.

And so, to the Iron Rangers, West Texas oil workers, coal miners, to everyone else the so-called booms of the '80s and '90s left behind, happy holidays. Enjoy the good times. Go ahead and buy that iPod. Because, as we all know, it's not going to last forever.

Ring in the New Year with this related Foolishness:

Robert Aronen owns no shares of any company mentioned and is eternally grateful he never had to use the outhouse in the winter.