I attended a Noam Chomsky lecture in the early 90s where he was explaining why he thought that the Wall Street Journal was the best source of information available at that time. The reason he felt this way was because the WSJ was a newspaper catering to the bigwigs of capitalism, and it wasn’t pretending to be anything else. With a little reading between the lines, you could see where things were going to trend or what the attitudes of the elites really were. I never forgot that and have always tried to read a wide variety of daily “business news” sources for this reason.

Today, via the often quirky Business Insider website, I came across an alarming presentation from Jeremy Grantham. Does his name ring a bell? Jeremy Grantham is a co-founder and the Chief Investment Strategist of Grantham Mayo Van Otterloo (GMO), an asset management firm with more than $108 billion dollars in assets under their care. It’s one of the largest asset management firms in the world.

Grantham is noted for his prediction of various bubbles in asset classes and his knack for seeing which direction the market is moving in. Lately he’s turned very, very bearish. Now, Grantham’s insisting: “We’re headed for a disaster of biblical proportions.”

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.
Statistically, most commodities are now so far away from their former downward trend that it makes it very probable that the old trend has changed – that there is in fact a Paradigm Shift – perhaps the most important economic event since the Industrial Revolution.
Climate change is associated with weather instability, but the last year was exceptionally bad. Near term it will surely get less bad.
Excellent long-term investment opportunities in resources and resource efficiency are compromised by the high chance of an improvement in weather next year and by the possibility that China may stumble.
From now on, price pressure and shortages of resources will be a permanent feature of our lives. This will increasingly slow down the growth rate of the developed and developing world and put a severe burden on poor countries.
We all need to develop serious resource plans, particularly energy policies. There is little time to waste.

You can go through the entire presentation at Business Insider. His charts show long, long term patterns and trends. Numbers don’t lie. There is very definitely a cause for concern. I’d very very curious what the Freakonomics guys had to say about this…