Tuesday, April 26, 2011

Jeremy Grantham GMO April 2011 Letter - Time to Wake Up

GMO's Jeremy Grantham's quarterly letter is and embedded below.  The crux of the piece is a focus on Malthusian outcomes as too many people in the globe evade stark poverty.  [Mar 24, 2008: WSJ - New Limits to Growth Revive Malthusian Fears] An oft cited quote is that if all 7 billion people on the globe lived like Americans (5% of the population), we'd need 4 Earth's to sustain the consumption.  Of course as we go forward technology advancements will be made, but Grantham says to expect a world of resource shortages and price increases.  Which is part of the reason China is running around the world offering financial assistance to countries rich in resources (many in Africa) to help build their infrastructure, in return for access to their commodity base.

Exhibit 3 in the piece is a great example of how China has become the main game in town in commodities demand.  [May 13, 2009: Commodities - It's China's World, The Rest of Us Just Live in It]  For example, China's share in world commodity consumption is as follows
  • Cement: 53%
  • Iron Ore: 48%
  • Coal: 47%
  • Steel: 45%
  • Aluminum: 41%
  • Copper: 38%
  • Eggs 37%

Hit full screen for the easier read

GMO April

[Jan 26, 2011:  Jeremy Grantham GMO 2011 Letter - Pavlov's Bulls]
[Nov 11, 2010: [Video] Jeremy Grantham Speaks]
[Oct 27, 2010: Jeremy Grantham GMO October 2010 Letter - Night of the Living Fed]
[Aug 3, 2010: Jeremy Grantham GMO July 2010 Letter - Summer Essays]
[Apr 26, 2010:  Jeremy Grantham GMO April 2010 Letter]
[Jan 26, 2010: Jeremy Grantham GMO January 2010 Letter]
[Oct 27, 2009: Jeremy Grantham GMO October 2009 Letter]

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