Saturday, November 24, 2012

We're Headed For A Disaster Of Biblical Proportions

Last year, legendary investor Jeremy Grantham of GMO published a treatise on exploding commodity prices.

He also offered a startlingly depressing outlook for the future of humanity.

Grantham believes the world has undergone a permanent "paradigm shift" in which the number of people on Earth has finally and permanently outstripped the planet's ability to support us.

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. The hope of the optimists, of course, is that science will find a solution to this problem, the way it has for the past 150 years. Let's hope so. In the meantime, here's a snapshot of Grantham's argument, along with his key points at the end.

In the past 200 years, the world population has exploded--just as Malthus predicted. What Malthus did not foresee was the discovery of oil and other natural resources, which have (temporarily) supported this population explosion. Those resources are now getting used up.. (more)

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