US Naval Services Long-Term Study: Global Tipping Points on Food, Water, Energy, Pollution, Population, & Natural Resources & Population Explosion...
State of the Worlds Future: According to a long-term study just released by the U.S. Naval Services Department, a series of tipping points could dramatically alter the global prospects for economic growth and humanity — for the worse.
Right now, for instance, fully half the world is vulnerable to social instability resulting from rising food and energy prices, lack of water, failing state governments, and pollution.
The Population Explosion: The Most Powerful Force on Earth: The population explosion is beyond control. It has emerged as the single most powerful, immutable force on Earth, driving geopolitical change, stimulating economic growth and generating global inflation. Ultimately, it is the most persistent but least understood factor underlying virtually everything weve been warning you about here in Money and Markets: It is behind food prices ..... It is behind the cycle of debt...... It is behind a new crisis in the Persian Gulf..... It is behind Peak Oil ...... This is just a small sampling of the massive scope and overpowering momentum of the population explosion. And what weve told you about in Money and Markets is just a sneak preview of its consequences...... At some point in the not-too-distant future, this explosion in population, consumption, and the exhaustion of scarce resources will inevitably collide with limits to growth. Brazil, China, India, the United States and most of the worlds economies will reach a breaking point beyond which further acceleration is virtually impossible. Prices will be so high, and incomes so low, that the demand for goods will plunge. Governments will fall. Economies will collapse. Thats when you will see the other side of the parabolic growth curve. Thats when you will see deflation.
State of the World's Future
Larry Edelson | MoneyandMarkets | 14 August 2008
According to a long-term study just released by the U.S. Naval Services Department, a series of tipping points could dramatically alter the global prospects for economic growth and humanity — for the worse.
Right now, for instance, fully half the world is vulnerable to social instability resulting from rising food and energy prices, lack of water, failing state governments, and pollution.
102 countries are at risk of chaos. 46 countries, comprising 2.7 BILLION people, are at risk of armed conflict with lack of adequate natural resources as the root cause for many of them. Another 56 countries, with 1.2 billion people, are at risk of severe social instability.
There are now 14 ongoing wars around the world: Five in Africa, four in Asia, two in the Americas, two in the Middle East, plus the world-wide war on terrorism.
And 37 countries face a food crisis due to increased demand, falling supplies, high energy prices, and global cereal stocks at 25-year lows. Nearly three billion people subsist on less than $2 a day.
Due to increased demand and with global cereal stocks at 25-year lows, many countries are facing a food crisis.
Some Other Facts to Consider ...
- — The world population today is 6.677 billion people, growing at a rate of 1.16% per annum.
- — The global economy had one of its best years ever in 2007, growing at 4.9% to $66 trillion in purchasing power parity (PPP). Global per-capita income grew a tad under 4%.
- — Yet, high levels of extreme poverty have given birth to 40 new diseases, 1,100 epidemics over the last five years, and 20 drug-resistant diseases today, a record.
Worse, old diseases have re-emerged, such as cholera and yellow fever. And more than one-third of all child deaths occur in the first 28 days of life, mostly due to lack of clean, potable water.
- — In total, 700 million people face water scarcity today. Without drastic investment of hundreds of billions of dollar, an estimated three billion people will not have adequate water supplies by 2025.
- — The world will need 50% more food within the next five years, and 100% more by 2030.
- — Democracy and freedom has declined over the last two years in one-fifth of the world's countries, while total military expenditures have hit $1.3 trillion per year.
- — There are an estimated 20,000 active nuclear weapons in the world, 1,700 tons of highly enriched uranium, and 500 tons of separated plutonium that could produce nuclear weapons.
- — There were over 150 reports of unauthorized use of nuclear materials per year between 2004 and 2007.
- — Illicit trade, corruption, and cybercrime are estimated to cost global GDP well over $2 trillion per year.
- — Global energy demand could double in just 20 years. Without major technological changes, fossil fuels will provide 81% of primary energy demand by 2030.
No matter how you look at it, the world has its work cut out for it if we are going to improve the future for our children and grandchildren, and for billions of people around the world.
Fortunately, there are some bright spots. Namely, three important ones ...
#1: Governments around the world are now becoming acutely aware of the problems the world faces. And, they are sharing their knowledge more consistently in international workgroups to solve crises.
#2: Super computers are now reaching levels that will be able to help solve problems at exponentially quicker rates.
A computer can now perform 1.144 thousand trillion floating point operations per second with the capability to support highly complex social, environmental, medical, and economic modeling that will allow more reliable predictions of future behavior and cause and effect relationships in virtually every field of study.
#3: Thanks to the Internet, a global "collective intelligence" is now forming on many of the issues confronting the world today. This enhanced global communication will speed the development of solutions through sharing of ideas and models.
I have faith. I believe we can do it. But getting there won't be easy.
Only massive, unprecedented investment will avert an energy crisis — by investing hundreds of billions of dollars in wind energy, geothermal, ground solar and space solar, and saltwater-based bio-fuels, and an equally massive investment in nuclear power plants.
» » » » [Money & Markets, via JAG 07-146]
The Population Explosion: The Most Powerful Force on Earth
Martin D. Weiss, Ph.D. | MoneyandMarkets | 19 June 2006
When I was born, there were fewer than two and a half billion people on the planet. Now, barely 60 years later, there are six and a half billion.
When my father first went to work on Wall Street in 1926, it had taken 125 years for the worlds population to double in size. When he passed away in 1997, it had taken only 39 years.
If youre a baby boomer like me, you and I have witnessed more people added to the worlds population in our lifetime than all the people added in all the centuries of history and prehistory that came before us.
The population explosion is beyond control. It has emerged as the single most powerful, immutable force on Earth, driving geopolitical change, stimulating economic growth and generating global inflation.
Ultimately, it is the most persistent but least understood factor underlying virtually everything weve been warning you about here in Money and Markets:
It is behind food prices, which are going up despite rapid advances in agricultural machinery … despite the great strides of the green revolution … despite the highest crop yields in history.
It is behind the cycle of debt. Im talking about the greatest credit inflation the world has ever seen, including $41.7 billion in U.S. interest-bearing debts, $101.5 trillion in derivative debts, tens of trillions in U.S. government commitments for Medicare and Social Security, plus trillions more in Europe, Asia, Latin America and Africa.
It is behind a new crisis in the Persian Gulf. This is where Iraqs oil-rich region of Basra is about to blow up, potentially derailing the worlds oil markets … sending the price of crude to brand new highs … and carrying most other commodity prices along with it.
It is behind many of the pressures driving up gold and interest rates, following a pattern that, in many ways, parallels the pattern we saw in the second half of the 1970s. And …
It is behind Peak Oil the critical threshold beyond which world oil production will start to decline … even with major improvements in extraction technology, even with more exploration, and even after a shift to alternative sources of energy.
This is just a small sampling of the massive scope and overpowering momentum of the population explosion. And what weve told you about in Money and Markets is just a sneak preview of its consequences.
Naturally, there are many other valid ways to explain inflation and many other formulas for forecasting it. But every single one can be traced back, directly or indirectly, to the population explosion.
Ultimately, its the population explosion that drives economic expansion. And in the final analysis, its the population-driven expansion that underlies government policies designed to sustain it.
Sometimes you may wonder:
Why do central banks continue to pump in so much money long after they recognize the inevitability of its inflationary consequences?
Why has GDP growth become the supreme icon of most governments, businesses and investors?
When debts and deficits run amuck, why dont our leaders just slow down, take a breather, and focus on finding a more stable path?
Your answers may be varied. But if you trace back through the chain of cause and effect, you will always return to one single, overriding factor: The population explosion colliding with finite resources. More mouths to feed. More demand. More pressure to perpetuate growth. More inflation.
This is the inescapable reality of our times.
Its why millions of immigrants are pouring into Western Europe from Africa, and millions more are streaming into the United States from Latin America.
Its a key reason were beginning to see environmental destruction and uncontrollable epidemics on an unprecedented scale.
And its also why I think most observers continue to underestimate the danger of inflation.
The Vicious Cycle of Poverty and Inflation
The dilemma the world faces today is reminiscent of the dilemma I personally witnessed growing up in Brazil in the 1950s and 1960s.
In those days, Brazil was forever the land of the future a future that never seemed to arrive.
The main reason: In response to demands by a population desperately anxious for a better life, politicians routinely sought to create an artificial prosperity … by inflating the money supply.
But when they inflated the money supply, they debased the currency …
When they debased the currency, they destroyed the purchasing power of salaried workers, and …
That destruction, in turn, added a whole new layer to the impoverished classes, bringing even more desperation and demands for a better life.
In short, the zeal to escape from poverty generated inflation; and the inflation created still more poverty.
Hard Landings on the Ground
At the time, most economists didnt get it. They theorized about inflation from 30,000 feet up. But they had little concept of what was happening on the ground.
So when I was 23, I returned to Brazil, camera and notebook in hand, to document the vicious cycle of poverty and inflation.
Brazils mandate to push for growth at any and all costs had driven the cruzeiro into the gutter. The country had suffered the most massive inflation of any large country since Germany after World War I. And it was ongoing.
In rural areas I visited, this meant that a familys earnings were so devalued and the cost of basics so inflated every family member had to work, and it was impossible for parents to care for children at home.
The children had to sit in the fields, fending for themselves. Pre-teens cared for 5-year-olds. 5-year-olds cared for toddlers. Many were entirely on their own.
In urban areas, the situation was equally desperate. While the real value of wages plunged, the price of food surged.
So any food that could be stored was stockpiled, and most merchants hoarded the stockpiles in anticipation of even higher prices.
In warehouses throughout the country, sacks of rice and beans were piled high, while traders waited for raging inflation to drive their commodities up in value. Even if a significant percentage of their inventories rotted, they still held out for higher prices. Acute shortages drove values up; and higher values caused even more shortages.
Everywhere, inflation, scarcity and poverty were intertwined.
Some Lessons for Today
That was nearly four decades ago, when the worlds population was roughly half what it is now. And that was Brazil, which, relatively speaking, was actually less destitute than many other countries.
Now, we see a situation in other regions of the world thats far worse, plus a new cycle of poverty and inflation just beginning to unfold.
In the Congo, for example, a relatively unknown war that began roughly eight years ago, has left 4 million dead more than the total fatalities suffered by both American and Japanese troops during all of World War II. The destruction of crops is enormous; the relative cost of food, outrageous.
In oil-rich Angola, a massive cholera epidemic has erupted almost entirely due to water contamination on the grandest scale ever witnessed in any region on the planet.
In most of sub-Saharan Africa, South America and South Asia, we see similar scenarios under way or in the making. These, in turn, are what are driving the millions of immigrants to Europe and North America.
Its a Malthusian nightmare, and its starting to occur right now.
The outlook is so obviously desperate that even some of the richest and most famous individuals on the planet people who in past eras might have turned a blind eye have decided they cant ignore it any longer.
Rock singer Bono has sidetracked his career to help restore some semblance of hope. Bill Gates has just announced his departure from Microsoft to dedicate the rest of his life to his charitable foundation with similar goals.
But unless the few turn into a multitude unless there is far-reaching cultural and political change even the efforts of the richest on earth may be too little, too late. According to Donella H. Meadows, Jorgen Randers and Dennis L. Meadows, authors of the recently-released Limits to Growth: The 30-Year Update, humanity is no longer just in danger of colliding against its limits; its on the brink of actually overshooting those limits, with potentially disastrous consequences.
In other words, we are not only reaching peaks in production of essential resources such as energy and food, we may be on the verge of permanently destroying our ability to produce those resources.
Right now, this is extremely inflationary. Every new phase of environmental destruction or depletion, every new outbreak of war, and every new epidemic of deadly disease is part and parcel of a single, integrated process: The vicious cycle of the population explosion and inflation.
No Sign of Change In This Powerful Trend
If we could see at least some sign even preliminary or cursory that population growth is slowing, that government policy is changing, or that the push for economic growth at any cost is receding … then, maybe, we could start talking about the end of inflation.
But right now, there is no such sign. Quite to the contrary, the inflationary pressures are growing.
Looking at the longest possible time horizon in the past, we can see that the population explosion has massive momentum with roots going back to the industrial revolution, even back to the dawn of agriculture 100 centuries ago.
Looking at the present, we also see great momentum: The rapid growth of China, India and other emerging nations … the reluctance of the United States to reduce its deficits … the intense desire of all countries to keep their booms and bubbles going.
And focusing on the near future, we can see, for the first time in over a millennium, a global collision between demand and supply.
Yes, theres talk of fighting the inflation. But the reality is that, despite meek attempts to raise interest rates in recent months, the central banks of the world have, so far, demonstrated neither the political mandate nor the personal courage to do much to stop it.
Can This Inflation Continue Forever?
Absolutely not.
At some point in the not-too-distant future, this explosion in population, consumption, and the exhaustion of scarce resources will inevitably collide with limits to growth.
Brazil, China, India, the United States and most of the worlds economies will reach a breaking point beyond which further acceleration is virtually impossible.
Prices will be so high, and incomes so low, that the demand for goods will plunge. Governments will fall. Economies will collapse.
Thats when you will see the other side of the parabolic growth curve. Thats when you will see deflation.
» » » » [Money and Markets, via JAG 07-146]
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