Jeremy Grantham: Time to Wake Up

GMO’s Jeremy Grantham’s quarterly letter is and embedded below. The crux of the piece is a focus on Malthusian outcomes as too many people in the globe evade stark poverty. An oft cited quote is that if all 7 billion people on the globe lived like Americans (5% of the population), we’d need 4 Earth’s to sustain the consumption. Of course as we go forward technology advancements will be made, but Grantham says to expect a world of resource shortages and price increases. Which is part of the reason China is running around the world offering financial assistance to countries rich in resources (many in Africa) to help build their infrastructure, in return for access to their commodity base.

Exhibit 3 in the piece is a great example of how China has become the main game in town in commodities demand. For example, China’s share in world commodity consumption is as follows:

Cement: 53% Aluminum: 41% Coal: 47% Eggs 37%
Iron Ore: 48% Copper: 38% Steel: 45%

Hit full screen for the easier read:

About Mark Hanna 542 Articles

Affiliation: Hanna Capital, LLC

Mark Hanna is President and Owner of Hanna Capital, LLC, a registered investment advisory firm. Mark has been a follower of markets since the late 80s, with a focus on individual equities since the mid 90s. He has been a well known commentator in the financial blogosphere for the past 5 years, following a career in corpoporate finance and accounting. Mark attended the University of Michigan where he graduated with a degree in Economics.

As an avid reader, Market Montage is the personal blogging site for Mark to share his views on economics, markets, and the like. Occasional cynicism and wit shall be deployed in his postings.

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