This weekend brought sobering news.
The first is the occasion of the issuance of the 2nd quarter 2011 report by 72 year old Jeremy Grantham, who sits on top of $100 billion in managed assets as the head of the asset management fund GMO . His reading of where things are going? From today’s NY Times article, Can Jeremy Grantham Profit From Ecological Mayhem –
Energy “will give us serious and sustained problems” over the next 50 years as we make the transition from hydrocarbons — oil, coal, gas — to solar, wind, nuclear and other sources, but we’ll muddle through to a solution to Peak Oil and related challenges. Peak Everything Else will prove more intractable for humanity. Metals, for instance, “are entropy at work . . . from wonderful metal ores to scattered waste,” and scarcity and higher prices “will slowly increase forever,” but if we scrimp and recycle, we can make do for another century before tight constraint kicks in.
Agriculture is more worrisome. Local water shortages will cause “persistent irritation” — wars, famines. Of the three essential macro nutrient fertilizers, nitrogen is relatively plentiful and recoverable, but we’re running out of potassium and phosphorus, finite mined resources that are “necessary for all life.” Canada has large reserves of potash (the source of potassium), which is good news for Americans, but 50 to 75 percent of the known reserves of phosphate (the source of phosphorus) are located in Morocco and the western Sahara. Assuming a 2 percent annual increase in phosphorus consumption, Grantham believes the rest of the world’s reserves won’t last more than 50 years, so he expects “gamesmanship” from the phosphate-rich.
Read Grantham’s original reports here.
And then there is billionaire George Soros, who reportedly is selling gold and buying farmland. From Natural News. . .
Food prices are skyrocketing all across the globe, and there’s no end in sight. The United Nations says food inflation is currently at 30% a year, and the fast-eroding value of the dollar is causing food prices to appear even higher (in contrast to a weakening currency). As the dollar drops in value due to runaway money printing at the Federal Reserve, the cost to import foods from other nations looks to double in just the next two years — and possibly every two years thereafter.
That’s probably why investors around the globe are flocking to farmland as the new growth industry. “Investors are pouring into farmland in the U.S. and parts of Europe, Latin America and Africa as global food prices soar,” reports Bloomberg magazine (http://www.bloomberg.com/news/2011-…). “A fund controlled by George Soros, the billionaire hedge-fund manager, owns 23.4 percent of South American farmland venture Adecoagro SA.”
Jim Rogers is also quoted in the same story, saying, “I have frequently told people that one of the best investments in the world will be farmland.”
That’s because demand for food is accelerating even as radical climate changes, a loss of fossil water supplies, and the failure of genetically engineered crops is actually reducing food yields around the globe. Ceres Partners, which invests in farmland, has produced astonishing 16 percent annual returnssince its launch in 2008. And this is during a depressed economy when most other industries are showing losses.
Read the rest at the link. I agree with the article’s conclusions — this is a good time to store food and to develop the ability to grow some of your own food. But I suggest two additional items for the to-do list — support your local food system and get into radical energy conservation.
Buckets of grain at the present price may look pretty cheap next year if we have another statewide failure in our wheat crop. We are edging right up to wheat planting time (early September) in Oklahoma, and there isn’t a lot of moisture in the ground despite the recent rains. In Texas, it is time to plant the wheat and its still dry as dust down there.
Farmers always have the option of planting their seed in the dry ground and dust and hoping they get a rain, but that costs money, and with farm income down all around, farmers have to ask whether they can afford to do that. If they’ve saved their own seed from last year, if they plant their seed wheat and they don’t get a stand, well, there goes their seed wheat.
The Bible says — Remember the time of hunger in the day of plenty. That’s good advice for troubled times.