Legendary Investor Jeremy Grantham: We’re Headed For A Disaster Of Biblical Proportions. Most of Us Are Going To Starve To Death.
We’re quickly heading towards the point of no return.
from Jeremy Grantham:
The phenomenon of ever-more humans using a finite supply of natural resources cannot continue forever, Grantham says–and the prices of metals, hydrocarbons (oil), and food are now beginning to reflect that.
Grantham believes that the planet can only sustainably support about 1.5 billion humans, versus the 7 billion on Earth right now (heading to 10-12 billion). For all of history except the last 200 years, the human population has been controlled via the limits of the food supply. Grantham thinks that, eventually, the same force will come into play again.
Summary of the Summary
The world is using up its natural resources at an alarming rate, and this has caused a permanent shift in their value. We all need to adjust our behavior to this new environment. It would help if we did it quickly.
? Until about 1800, our species had no safety margin and lived, like other animals, up to the limit of the food supply, ebbing and flowing in population.
? From about 1800 on the use of hydrocarbons allowed for an explosion in energy use, in food supply, and, through the creation of surpluses, a dramatic increase in wealth and scientific progress.
? Since 1800, the population has surged from 800 million to 7 billion, on its way to an estimated 8 billion, at minimum.
? The rise in population, the ten-fold increase in wealth in developed countries, and the current explosive growth in developing countries have eaten rapidly into our finite resources of hydrocarbons and metals, fertilizer, available land, and water.
? Now, despite a massive increase in fertilizer use, the growth in crop yields per acre has declined from 3.5% in the 1960s to 1.2% today. There is little productive new land to bring on and, as people get richer, they eat more grain-intensive meat. Because the population continues to grow at over 1%, there is little safety margin.
? The problems of compounding growth in the face of finite resources are not easily understood by optimistic, short-term-oriented, and relatively innumerate humans (especially the political variety).
? The fact is that no compound growth is sustainable. If we maintain our desperate focus on growth, we will run out of everything and crash. We must substitute qualitative growth for quantitative growth.
? But Mrs. Market is helping, and right now she is sending us the Mother of all price signals. The prices of all important commodities except oil declined for 100 years until 2002, by an average of 70%. From 2002 until now, this entire decline was erased by a bigger price surge than occurred during World War II.
? Statistically, most commodities are now so far away from their former downward trend that it makes it very probable that the old trend has changed – that there is in fact a Paradigm Shift – perhaps the most important economic event since the Industrial Revolution.
? Climate change is associated with weather instability, but the last year was exceptionally bad. Near term it will surely get less bad.
? Excellent long-term investment opportunities in resources and resource efficiency are compromised by the high chance of an improvement in weather next year and by the possibility that China may stumble.
? From now on, price pressure and shortages of resources will be a permanent feature of our lives. This will increasingly slow down the growth rate of the developed and developing world and put a severe burden on poor countries.
? We all need to develop serious resource plans, particularly energy policies. There is little time to waste.
The Day The World Ended [Micro-Documentary]
From the creator of the widely popular The Day the Dollar Died: The First 12 Hours of a US Dollar Collapse, comes a simulation of what the world may look like in the very near future.
WATCH: THE DAY THE WORLD ENDED (PART 1 of 2):
Morgan Stanley’s doom scenario – Major recession in 2013
Reality is eroding away what little denial-based optimism is left, even on Wall Street. Wall Street bank Morgan Stanley now sees the obvious.
The global economy is likely to be stuck in the “twilight zone” of sluggish growth in 2013, Morgan Stanley has warned, but if policymakers fail to act, it could get a lot worse.
The bank’s economics team forecasts a full-blown recession next year, under a pessimistic scenario, with global gross domestic product (GDP) likely to plunge 2 percent.
“More than ever, the economic outlook hinges upon the actions taken or not taken by governments and central banks,” Morgan Stanley said in a report.
Under the bank’s more gloomy scenario, the U.S. would go over the “fiscal cliff” leading to a contraction in U.S. GDP for the first three quarters of 2013. In Europe, the bank’s pessimistic scenario assumes a failure of the European Central Bank (ECB) in cutting rates and a delay of its bond-buying program.
Euro zone faces deepest downturn since early 2009
Eurozone’s economy declining at “alarming pace”
The euro zone economy is on course for its weakest quarter since the dark days of early 2009, according to business surveys that showed companies toiling against shrinking order books in November.
“Instead of nice smooth path from 2% to 3%, [inflation] could gap to 6% in a matter of months,” he says.
Japan’s grand experiment of decades-long QE coupled with Keynesian foolishness is about to take one last gigantic leap forward before it plunges straight off the cliff into a massive currency crisis.
The greatest problem we have is that liquidity is down by more than 50% still since 2007 on a global scale. Governments are getting so aggressive with taxation they are killing the global economy causing capital to just hoard. This nonsense of terrorism has created a global tax g…
Dr. Doom 2013 prediction: Economist Nouriel Roubini recently stated that a “perfect storm” for economic disaster is currently brewing, and he stands behind his beliefs. Considering Roubini is the guy who accurately predicted the country’s previous financial disaster, it’s safe to assume that countless buttholes are being clenched whenever this guy has something to say. And while you may think the 2008 crisis was the worst that could happen, Dr. Doom feels that 2013 is going to be much worse.