Three little charts and the end of the world
By
Bill Bonner
Jun 16, 2008
Doomsday forecasts usually fail – but there’s always a first time…
We left off last week staring into the gates of hell. Today, we go back to laugh at the devil.
Our first chart is a chart of us – of the growth in the human population. Even though the rate of population growth has gone down since the 1960s, the actual number of humans is increasing faster and faster. The world’s population was only about three billion in 1960. Now, it adds that many new faces every 35 years or so.
But every generation faces the furnace at least once before it gets fried. Apocalypse comes and goes. Barely had Christ shaken the dust from his sandals when Saint Clement I predicted the second coming; the world would end at any moment, he said. Many expected the world to end in 666, a year that carried the ‘mark of the beast’.
And in the early 19th century, the Millerites believed the world would end at the close of October 22, 1843. They gave away their property and gathered on hilltops to wait. At least one man with an extraordinary confidence in his pocket watch leapt off a barn roof at midnight, expecting to be taken up to heaven in the moment of rapture. Like an investor, he got what he deserved, not necessarily what he expected. The night became known as the “Great Disappointment”.
Near the end of the first millennium, German Emperor Otto III interpreted a solar eclipse as an exterminating omen. At the end of the second, it was a computer glitch that spelt annihilation. If the computers failed, said the doomsters, the control systems for trains and trucks wouldn’t work. Banks wouldn’t be able to honour checks or pay out cash. No money. No food. Millions would starve.
The leading exponent of Y2K hysteria was a friend of ours, Dr. Gary North of Austin, Texas. He was sure the first day of 2000 would bring a global debacle. When the fateful day came, computers sighed – but didn’t even take a holiday. Poor Gary had staked his reputation on Y2K. His friends called him to cheer him with kind words: “Don’t worry, Gary; things aren’t so good. And there’s always that global warming thing.”
The history of the financial markets, too, is full of great disappointments. In Britain’s commercial property market, for example, developers thought they were in heaven just two years ago. Hammerson’s (LON:HMSO) share price more than tripled in the three years from 2003 to 2006, as the City seemed ready to take up every new square foot – at a premium price. Higher prices begat further construction, which begat more commercial space, which begat a glut, which begat a bust.
Strutt & Parker says commercial property prices in the Southeast are down 25% in the last six months. Turnover in the commercial property market fell 75% from the levels in early 2007. And Hammerson has seen its shares nearly cut in half. And there you have both the good news and the bad. Delusion is self-limiting. Success is self-correcting. And prosperity brings its own punishment.
Today, the mother of all bubbles is expanding fast; the gates of hell open wider than ever. Humans are replicating like plastic bags. They blow across the streets and accumulate in bad neighbourhoods. Many expect a Malthusian catastrophe; they see it as a mathematical certainty that food and water cannot keep up. From Nature’s point of view, mankind is destroying the planet – by overfishing, overconsuming, overproducing, and overdoing it generally. Bad news for glaciers and sea turtles. From man’s perspective, it is the planet that is letting him down. He goes about his business – begetting all he can – and then he discovers he can’t find a parking place. And his car is out of gas. Take a look at the chart below.
Of the world’s 65 leading oil fields, 54 are now in decline. And the rate of discovery of new deposits of petroleum that can be accessed by conventional means has collapsed. In the early 1960s, the world’s drillers were finding nearly 60 billion barrels of new oil deposits each year. In the early 2000s, the rate had fallen to less than 10 billion per year.
Finally, there is this little chart (above). It shows what is happening to the world’s supply of arable land. It’ll come as no surprise to realise that there is less and less of it available for every new person that joins us on the planet. The end of the world? Probably not. The world is largely indifferent to our problems. Supply and demand always balance out – sometimes disastrously.
Published in Economics
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by
Bill Bonner
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