The Coming Resources Crunch?

Green, Green and Grains reviews an NYT profile of Jeremy Grantham:

I'm noting Grantham track record and think he's making a lot of sense.  But I wonder: How many connoisseurs of bubbles have worked to find the controls?  That is, find the historical episodes where there was a rapid market adjustment that may have appeared to be a bubble to the rare connoisseurs but then it turned out not to be a bubble.   After the fact, maybe all bubbles look alike.  But looking at it from hindsight doesn't really count.

But now Grantham is saying this time is different:

So it’s news when Grantham, who has built his career on the conviction that peaks and troughs will even out as prices inevitably revert to their historical mean, says that this time it really is different, and not in a good way. In his April letter, “Time to Wake Up: Days of Abundant Resources and Falling Prices Are Over Forever,” he argued that “we are in the midst of one of the giant inflection points in economic history.” The market is “sending us the Mother of all price signals,” warning us that “if we maintain our desperate focus on growth, we will run out of everything and crash.”

That sounds even more pessimistic than me, especially that last sentence.  Prices will rise, which will keep us from running out.

But while I'm nowhere near as confident as Mr Grantham, it seems very possible to me that the long downward trend in commodity prices has reversed permanently.