Can the World Hold 7 Billion?

Some time this year, there will be 7 billion people on the planet. If we all stood shoulder-to-shoulder, we would fit inside the city of Los Angeles.

National Geographic just kicked off its year-long series dedicated to this global milestone. Check out this video.

According to National Geographic, no human had lived through a doubling of the human population before the 20th Century. Now, there are people on this planet who have seen it triple. In fact, the world population hasn’t fallen since the Black Death wiped out nearly 60 percent of Europe’s population.

The problem with population isn’t space—we have plenty of it—it’s resources. Nearly 1 billion people go hungry every day and 20 years from now there will be 2 billion more mouths to feed.

If you’re analytical, you can think of it this way—the Earth has a finite number of resources but the demand and use of these resources are the variables. That demand not only depends on the number of people, but how intense their usage is.

Today, usage intensity is picking up in the emerging world—which happens to be home to the majority of the global population. As these people move, for example, from using bicycles to cars, or candles to electricity, the pressure on that finite amount of resources rises.

This, in a nutshell, is why we’re positive on natural resources—the supply of resources is limited while the demand is rising. Daily, monthly and even yearly fluctuations in demand or geopolitical events will cause volatility in prices, but the overall supply/demand fundamentals remain intact, and we believe these fundamentals lead to higher prices for these increasingly rare commodities.

Since this population theme is a cornerstone of the natural resources story, we’ll check back in on the National Geographic series as it progresses.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor.

About Frank Holmes 263 Articles

Affiliation: U.S. Global Investors

Frank Holmes is CEO and chief investment officer of U.S. Global Investors, Inc., which manages a diversified family of mutual funds and hedge funds specializing in natural resources, emerging markets and infrastructure.

The company’s funds have earned more than two dozen Lipper Fund Awards and certificates since 2000. The Global Resources Fund (PSPFX) was Lipper’s top-performing global natural resources fund in 2010. In 2009, the World Precious Minerals Fund (UNWPX) was Lipper’s top-performing gold fund, the second time in four years for that achievement. In addition, both funds received 2007 and 2008 Lipper Fund Awards as the best overall funds in their respective categories.

Mr. Holmes was 2006 mining fund manager of the year for Mining Journal, a leading publication for the global resources industry, and he is co-author of “The Goldwatcher: Demystifying Gold Investing.”

He is also an advisor to the International Crisis Group, which works to resolve global conflict, and the William J. Clinton Foundation on sustainable development in nations with resource-based economies.

Mr. Holmes is a much-sought-after conference speaker and a regular commentator on financial television. He has been profiled by Fortune, Barron’s, The Financial Times and other publications.

Visit: U.S. Global Investors

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