of social security and dynamite. It's Sweden's capital city - Stockholm.

Thanks for joining us.

Here in the north of Europe, of the Scandinavian countries, Sweden is the biggest and most

populous. And Stockholm is by far Sweden's dominant city. Locals here are considered

particularly confident and self-assured. And exploring this city, the character of its

people unfolds to its many attractions.

We'll explore the old town, be dazzled in its city hall, enjoy a slice of reindeer in

style, cruise to the palace, chill out in a convivial ice bar, imagine Sweden's once-upon-a-time

mighty navy, marvel at the work of a local sculptor, tap our toes to a Swedish beat,

and sail the Archipelago for the ultimate in Scandinavian summer beauty.

Today, with nearly two million people in Stockholm's greater metropolitan area, one in five Swedes

calls this city home. Once a respected military power, now famously neutral, this stately

capital respects its rich heritage while embracing modern innovation.

Stockholm is defined as much by water as it is by land. Part of an archipelago it's surrounded

by both the sea and a large lake. The city is nearly as full of parks and trees as it

is wood buildings and it's traversed by numerous bridges. Wander through the city and you're

struck by its elegant architecture, proud monuments, and inviting promenades. Stockholm's

appealing waterfront is both a working harbor and a welcoming people zone.

Overlooking it all in the heart of the old town is the Royal Palace. In summer, with

great fanfare, military bands herald the Changing of the Guard.

The ceremony in the courtyard of the palace recalls the days when Sweden was a militaristic

power - a kingdom to be reckoned with. While this spectacle does look formidable, it's

more a celebration of Swedish heritage in a country that today is famously pacifist.

Strong and expansionist kings - like Gustavus Adolphus, who ruled in the early 1600s and

was a brilliant general - made Stockholm this country's permanent capital and established

the Swedish Empire.

Gustavus Adolphus was nicknamed the Lion of the North. He made Sweden one of Europe's

top powers and was instrumental in helping the Protestants turn the tide against the

Catholics in the Thirty Years War. Because of his innovative tactics on the battlefield,

he's considered by many the Father of Modern Warfare.

For a glimpse at the splendor of Sweden's former power, step into the Royal Armory.

While fearsome on the battlefield, armor had a ceremonial value as well. These pieces must

have dazzled viewers back in the 1600s - that was the point. The fine workmanship elevates

tools of war to an art form. The same lavish attention to both protection and style was

also given to horses.

The Swedish royal family kept up with their counterparts elsewhere in Europe. Four centuries

of coronation and royal wedding wear take you from the time of Gustavus Adolphus - this

is his fine suit - through the ages. This 1766 wedding dress of Queen Sofia was designed

to cleverly show off her fabulous wealth. And the dress - with its extravagant material

- seems even wider when compared to her 20-inch corseted waist.

The Royal Palace which contains this museum and several others is one of Europe's biggest.

While it's technically the royal family's official residence, they actually live outside

of town at Drottningholm Palace. The most scenic way to get there is the way the royals

once did - by boat. We're cruising up Lake Maleren. This relaxing voyage is a delight,

revealing more dimensions of this city of lakes, parks, and islands.

Drottningholm Palace has been called "Sweden's Versailles." The public is welcome to enjoy

the garden and tour the palace.

The grand entry leads into a world where 18th century style prevails. Back then, Europe's

monarchs, who were considered divinely ordained to rule, were tightly networked by marriage.

In fact the Swedish royal family had blue-blooded cousins ranging from Catherine the Great in

Russia to Louis 16th in France.

The décor pushed the notion of a divine monarch. But the king was long challenged by a strong

parliament and, today, Sweden's royalty is a modern constitutional monarchy.

The ball room hosted formal occasions. The bed room was a kind of theater where the monarch

would be ceremonially dressed as nobles would help him slip into his leotards. The lavish

library illustrated the royal commitment to education in the 18th century. The palace's

baroque theater takes you back 200 years. And as in palaces throughout Europe, Roman

busts implied at least symbolic connections with the Roman Empire in order to substantiate

and legitimize royal power.

Originally the entire city was contained on this island. Today, Stockholm's old town - or

Gamla Stan - is popular with locals and visitors alike. The town square, called Stortorget,

was once an important commercial center. Now, it's simply a favored place to relax and enjoy

the Swedish good life.

Gamla Stan's main drag is a hit with shoppers and busy with tourists. But, venturing just

a block or two from the commotion, the atmosphere changes. Tranquil lanes feel much as they

did back in the 17th century.

Medieval Stockholm was a trading center, busy with merchants from foreign lands. The German

Church, rocketing heavenward, reminded all of the power of Germans in this part of Europe.

With the Reformation in 1527, the king made Sweden a Protestant state. Suddenly church

services could be held in the people's language rather than Latin. And that meant every nationality

needed its own church. The Germans worshipped over there. The Finns had their church. And

the Swedes got the cathedral.

The cathedral, while grand, is wedged into the tight quarters of Gamla Stan. The interior

is cobbled with centuries-old tombstones. When royal families worshipped here, they

sat in their own private pews. These date from about 1700. While originally Catholic,

this church has been Lutheran for five centuries.

With the Reformation's passion for sermons and Bible readings, the pulpit was a focal

point. You can feel the feistiness of the Swedish Lutherans in this 500 year old statue

of Saint George and the Dragon. It's carved of oak and elk horn. To some, this symbolizes

the Swedes' overcoming their arch-rivals - the Danes. In a broader sense, it's an inspiration

to take up the struggle against even non-Danish evil.

When choosing a place for dinner, I try to leave the high rent spots to the tourists

and find small restaurants with low rent catering to a loyal hometown customers. And, of course,

locals know the best places. My friend, Hakan and his wife Ylva, are taking me to one of

their favorites for a lesson in good eating, Swedish style.

And that's changed a lot since Hakan and Ylva were children including New World wines and

lots of spices brought by recent immigrants to enliven the traditional meat, fish and

potato staples.

Rick: And what is this, Sami? Sami: This is the reindeer roast beef.

Rick: Reindeer roast beef you say, okay. So, Hakan, the potato really has roots in your

history and your culture. Hakan: Extremely much so. Sweden's population

start to grow in the 1800s and there was someone who said the reason was peace, vaccination

and potatoes. Rick: This reindeer is really tasty.

Hakan: Oh yes, reindeer I would say is beef of the north, that's the beef of the Laplanders

and it's spread all over Sweden.

Local food and local knowledge, it's always a winning combination.

Stockholm's Nobel Prize Museum tells the story of the world's most prestigious award. Stockholm-born

Alfred Nobel was a prolific inventor with over 300 patents. His most famous invention

- dynamite.

Living in the late 1800s, Nobel was a man of his age. It was a time of great optimism,

wild ideas, and grand projects. His dynamite enabled entire nations to blast their way

into the modern age with canals, railroads, and tunnels. It made warfare much more destructive.

And it also made Alfred Noble a very wealthy man.

Wanting to leave a legacy that celebrated and supported people with great ideas, he

left his fortune to fund the Nobel Prize. Each year laureates are honored in the fields

of physics, chemistry, medicine, literature, and perhaps most famously in peacemaking.

Portraits of all the prize winners since the first annual ceremony was held in 1901 hang

from the ceiling - shuffling around the room like shirts at the dry cleaner's. And video

clips let you ponder the contributions of so many great minds.

The annual Nobel Prize banquet is held just a short walk away, in Stockholm's City Hall.

It's a stately mix of eight million red bricks and lots of Stockholm pride. While churches

dominate cities in southern Europe, up here, in the Scandinavian capitals, city halls seem

to be the most impressive buildings. They celebrate humanism...people working together

for the good of their community. Built in 1923, Stockholm's City Hall is particularly

enjoyable and well worth its entertaining hour long tour.

Guide: This here where we are standing is the Blue Hall. It's the biggest reception

hall of the City Hall and this is where the Nobel banquet takes place the 10th of December

every year, hosting 1,300 guests. This here is the Council's chamber since the City Hall

really is a functioning City Hall. In here the Municipal Council of Stockholm hold their

meetings. What I would like to show you in here is our magnificent ceiling. It's done

to look like an old Viking house. The construction of the old Viking houses were long and narrow

exactly like the ceiling right here. This here is the Golden Hall, artwork finished

in 1922. We have about 90,000,000 pieces of mosaic in here and it is real gold in each

and every one of them. The centerpiece of this room you can see behind me here, this

is the Queen of the Lake, a symbol of Stockholm. he Queen of the Lake here, she's situated

in the center of the world. On the left side there's the western world - the Eiffel Tower,

the Statue of Liberty. On her right side the Orient - an Indian elephant, a Turkish flag.

And not only the world because around her sides there are also the different zodiac

signs symbolizing the universe. She's the Queen of the Lake - Stockholm - center of

the world - center of the universe.

The City Hall comes with a bold tower. It offers a commanding view of Stockholm's 14

islands which are woven together by about fifty bridges. Sweden's stunning capital is

green, clean, and people-friendly.

Strolling the shoreline promenades, you join the parade of locals. Well-worn old working

ships seem content... retired in the shadow of elegant facades. Rather than cars and buses,

it's the domain of joggers, baby strollers, and visitors marveling at the joys of this

city on the Baltic.

Stockholm exists because of its location - where Lake Malaren meets the Baltic Sea. Traders

would paddle their goods from far inland to this point from where sea-going merchants

would ship it south to Europe.

In the 13th century, the new kingdom of Sweden needed revenue so they established customs

laws and levied duties on all the copper, iron, and furs that passed through here. Today,

the lake, which is about 2 feet above sea level, is connected to the Baltic Sea by locks.

For the thoughtful observer, history is everywhere. For example, centuries ago, this Kungsgarten

or "King's Garden Square" was the private garden of the king. Today, this is clearly

the people's domain. It's considered Stockholm's living room.

Swedes are leaders among Europeans with their social legislation. They pay high taxes and

have high expectations. Swedes enjoy a minimum of five weeks paid vacation from the day they're

hired. In the interest of family values, new moms and dads split 16 months of paid parental

leave anyway they like. And Swedes believe that every citizen, regardless of their family's

economic status, gets quality health care and education. Alcohol is highly taxed and

tourists contribute to Sweden's costly entitlements every time they buy a drink.

A fun if touristy way to do that is to put on a heavy coat and enjoy a fancy vodka on

ice... literally. The Absolut Icebar is actually made out of ice. For your cover charge you'll

get 45 chilly minutes to sip your choice of vodka drinks in an ice glass, at an ice bar

or lounging on a nice ice sofa. In a scene like this, there's no shortage of conversation.

Sergles Torg was built in the 1960s to balance the political and royal city with a bustling

commercial district. This modern center of Stockholm is dedicated to shopping. Festooned

with sales banners blowing in the Nordic wind, thriving pedestrian boulevards are lined with

temptations on sale.

Hötorget - literally "Hay Market" - now feeds people rather than horses. This vibrant outdoor

produce market changes colors with the seasons. Today, in August, it's berries of the forest

and golden chanterelles.

Overlooking the market is a striking statue by Carl Milles. For more of his work, you'll

find a veritable forest of statues by Sweden's greatest sculptor on a bluff at the edge of

town. Carl Milles spent much of his career here at his villa, where he lived and worked

for 20 years. He lovingly designed this delightful sculpture garden.

Milles wanted his art displayed on pedestals...to be seen as if silhouettes against the sky.

His subjects - often Greek myths such as Pegasus or Poseidon - stand out as if using the sky

as a blank paper. Yet, unlike silhouettes, images in the sky can be enjoyed from many

angles. Milles injected life into his work with water, splashing playfully.

Perhaps his most famous work, "Hand of God," gives an insight into Milles' belief that

when the artist created he was, in a way, divinely-inspired.

The

city's harbor is busy with ferries. And many take people into its vast archipelago - an

amazing playground of literally thousands of islands stretching 80 miles from the city.

There are plenty of ways to see the archipelago. Those taking the huge cruise ships that ferry

travelers to Helsinki enjoy three hours of island scenery before they finally reach the

open Baltic Sea. You can take a quick boat tour... or, what we're doing, catch a ferry

with the locals.

One of the joys of an archipelago trip is to grab a perch on the breezy sundeck with

the Swedes as they enjoy their island wonderland. Ferries serve over a hundred islands. They

stop at others... on request... or to plop down the days' mail. Every cabin seems to