Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever

July 5, 2011 • Climate Change & Mitigation, Daily Email Recap

Many thanks to Dell Erickson for this article.  See http://www.scribd.com/doc/53865070/GMO-April.  For the full report or to glance at the graphs of various commodity prices, download the PDF at https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B5F-idWfw7TeZGZiMzZmMzMtYTU0NC00NDJhLWI1MDUtNTcwOGNiMDRjNzhh&hl=en_US&authkey=CKCNvuYC

Time To Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever

Jeremy Grantham

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.

Summary

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.

To read the full article, please click here: https://docs.google.com/a/populationmedia.org/viewer?a=v&pid=explorer&chrome=true&srcid=0B5F-idWfw7TeZGZiMzZmMzMtYTU0NC00NDJhLWI1MDUtNTcwOGNiMDRjNzhh&hl=en_US&authkey=CKCNvuYC&pli=1


Current World Population

7,740,310,505

Net Growth During Your Visit

0

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