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Compounding growth + finite resources = disaster

“We’re Headed For A Disaster Of Biblical Proportions,” headlines a Business Insider article on Jeremy Grantham’s “startlingly depressing outlook for the future of humanity.” Grantham manages $97 billion in assets at GMO, so it’s his business to recognize threats to his clients’ financial security. But he’s become concerned about threats to their very lives. “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…. In the 1980s, we began consuming more oil each year than was discovered. That disparity is only going to increase…. The story for metals, by the way, is the same as for oil: The low-hanging fruit has been picked…. And the same story is playing out in food…. The growth in crop yields per acre has dropped… dangerously close to the growth of population, and at some point soon, the lines will cross…. 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.”


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