Thursday, August 2, 2012

Jeremy Grantham: Investment Outlook (Q2 2012)

Sum­mary of the Summary

We are five years into a severe global food cri­sis that is very unlikely to go away. It will threaten poor coun­tries with increased mal­nu­tri­tion and star­va­tion and even col­lapse. Resource squab­bles and waves of food-induced migra­tion will threaten global sta­bil­ity and global growth. This threat is badly under­es­ti­mated by almost every­body and all insti­tu­tions with the pos­si­ble excep­tion of some mil­i­tary establishments.

Sum­mary

1. Last year we reported the data that showed that we are 10 years into a par­a­digm shift or phase change from falling resource prices into quite rapidly ris­ing real prices.

2. It now appears that we are also about five years into a chronic global food cri­sis that is unlikely to fade for many decades, at least until the global pop­u­la­tion has con­sid­er­ably declined from its likely peak of over nine bil­lion in 2050.

3. The gen­eral assump­tion is that we need to increase food pro­duc­tion by 60% to 100% by 2050 to feed at least a mod­est suf­fi­ciency of calo­ries to all 9 bil­lion+ peo­ple plus to deliver much more meat to the rapidly increas­ing mid­dle classes of the devel­op­ing world. (more)


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