Oil prices are more than double the December-February troughs and commodity prices generally are going up as the market cheers signs of an economic recovery.
Jeremy Grantham, chairman of U.S.-based money monager GMO, warns that the world is running out of resources in the long run yet is not correctly pricing the fact.
“We are simply running out of everything at a dangerous rate… As we move through our remarkable and irreplaceable hydrocarbon reserves, the price will, of course, rise remorselessly to ration supplies. We need, it seems, the shock of a Pearl Harbor to really gear up and make sacrifices,” he says.
Grantham points out that in 1977 President Jimmy Carter warned that we were running out of oil and urged people to fully insulate 80% of the houses in 10 years.
“Thirty precious years have passed, and there is now no safety margin. We must prepare ourselves for waves of higher resource prices and periods of shortages unlike anything we have faced outside of wartime conditions,” he writes.
“In fact, I believe we are already several years into this painful transition but are still mostly invested in denying it.”
