Tag: peak everything

Thirty nine years ago (1972), the extremely prescient Limits to Growth was published, basically arguing that the Earth’s finite resources, e.g., food, water, air, etc., created a natural limit or “carrying capacity” to sustainable human populations.  At or near the limits of carrying capacity, population growth must cease, or any growth that occurred would have to depend on concomitant increases in efficiency of resource utilization, rather than in quantitative resource usage, in order for the population to be sustainable into the foreseeable future.  The consequences of exceeding carrying capacity were articulated long ago:

What most frequently meets our view (and occasions complaint), is our teeming population: our numbers are burdensome to the world, which can hardly supply us from its natural elements; our wants grow more and more keen, and our complaints more bitter in all mouths, whilst Nature fails in affording us her usual sustenance.  In very deed, pestilence, and famine, and wars, and earthquakes have to be regarded as a remedy for nations, as the means of pruning the luxuriance of the human race.

-Tertullian (De Anima)

I love that quote, not just for the Four Horsemen and the equation of “human luxuriance” with the relief of apocalypse, but also the acute observations about wants growing more keen and complaints more bitter, which aptly describes the effects of activating the endocrine stress axis.

Surely end-times are upon us when an economist and major investment fund manager accurately perceives and characterizes reality independent of his wish to make oodles of lucre based on a mark-to-fantasy “model” of reality.  To be fair, Wiki characterizes Jeremy Grantham thusly:

Grantham’s investment philosophy can be summarized by his commonly used phrase “reversion to the mean.” Essentially, he believes that all asset classes and markets will revert to mean historical levels from highs and lows. His firm seeks to understand historical changes in markets and predict results for seven years into the future. When there is deviation from historical means (averages), the firm may take an investment position based on a return to the mean. The firm allocates assets based on internal predictions of market direction.[4]

In his own words, Grantham is an anti-bubble investor:

“For the record, I wrote an article for Fortune published in September of 2007 that referred to three “near certainties”: profit margins would come down, the housing market would break, and the risk-premium all over the world would widen, each with severe consequences. You can perhaps only have that degree of confidence if you have been to the history books as much as we have and looked at every bubble and every bust. We have found that there are no exceptions. We are up to 34 completed bubbles. Every single one of them has broken all the way back to the trend that existed prior to the bubble forming, which is a very tough standard. So it’s simply illogical to give up the really high probabilities involved at the asset class level. All the data errors that frighten us all at the individual stock level are washed away at these great aggregations. It’s simply more reliable, higher-quality data.”[5]

Grantham’s latest newsletter (pdf) is absolutely chock-a-block with dire warnings about the Mother of All Bubbles (hydrocarbon-based human population growth) and what can only be referred to as extreme, anti-orthodox, economic heresy.