The words of Mother Teresa resonate profoundly in our current climate: “If you can’t feed a hundred people, then just feed one.” With the escalating crises in food availability and prices, many might soon struggle to provide for themselves.
As reported by the World Bank, a staggering 44 million individuals have been thrust into extreme poverty since June, driven by food shortages that have surged the UN food-price index. This scenario indicates an alarming rise in global poverty, one that could likely be just the beginning.
Noted market analyst Jeremy Grantham has a history of accurately forecasting significant market shifts. He foresaw both the 2008 financial crash and the technology bubble collapse well before they transpired. In his latest Quarterly Letter, Grantham shares several disconcerting insights regarding current market conditions.
“Mrs. Market is helping,” Grantham notes. “And at this moment, she is signaling us with unprecedented price alerts. For a century, commodity prices—excluding oil—dropped by an average of 70 percent, until 2002. Since then, those losses have been undone by an even sharper price surge than what we witnessed during World War II.
“Most commodities are now so distanced from their previous downward trajectory that it’s highly likely we are witnessing a fundamental shift—an essential shift akin to the most significant economic event since the Industrial Revolution.”
The Threat of WWIII
The rise in food prices has been hard to ignore. Yet, the effects are not uniformly felt across the globe. The most vulnerable populations are hit the hardest.
“Prices are rising, but the impact is not equal,” states MarketWatch. “In the U.S., where citizens spend less than 10% of their income on groceries, these soaring food prices might be seen as a nuisance rather than a disaster. However, for the poorest 2 billion people globally, who allocate 50% to 70% of their income on food, these escalating prices could mean a reduction from two meals a day to one.”
“Those barely clinging to the lower rungs of the economic ladder risk falling entirely. This strain can lead to revolutions and societal upheaval.”
“Yes, the situation will worsen, significantly. The global population is projected to surge from 3 billion to 9 billion between 1950 and 2050. Meanwhile, the wealthy will continue to amass more wealth, poverty will deepen, and countless individuals will go to bed hungry in emerging economies. Such instability often breeds revolts, which in turn can lead to escalating global conflicts over dwindling resources.”
“In this skewed reality, the wealthy will face more than just a minor increase in grocery prices. The cost of overlooking these issues could escalate into trillions as the specter of World War III looms ever larger.”
History Is Coming
Economic collapse, revolutions, and wars are not topics typically broached in casual conversation. It often feels safer to keep such concerns to oneself around neighbors, lest one be deemed overly dramatic.
But is it truly irrational to explore possibilities that, while infrequent, hold the potential for massive destruction?
By nature, transformative global events often catch society off guard. It is usually only after the fact that the triggers for such upheaval become apparent.
For instance, when Archduke Franz Ferdinand of Austria was assassinated on June 28, 1914, few could fathom the devastating chain of events that would follow. Yet, a continent filled with empires can be quite volatile; it merely requires a spark to ignite widespread chaos.
Presently, as we approach another hot season, a mix of soaring temperatures, heightened frustrations, and empty stomachs could lead to unpredictable outcomes. Considering how the year has unfolded, an unexpected event seems likely.
Who can say that catastrophe isn’t on the horizon? At the very least, we might witness a stock market crash or a drastic rise in interest rates. Perhaps the dollar will finally falter.
This isn’t a prediction but merely a consideration of possible scenarios.
Take a moment to observe your surroundings—listen, breathe deeply, enjoy your coffee, and acknowledge the gravity of the situation. History is on the verge of unfolding, and one can almost sense its approach.
Sincerely,
MN Gordon
for Economic Prism