JEREMY GRANTHAM: And then within that subset I started to say, and which is the tightest, most problematical situation and that brought to us phosphate oil to phosphorous.CHARLIE ROSE:
Right.JEREMY GRANTHAM: And the scary thing about phosphorous which really does give me goose bumps though, when I think about it, it`s -- it`s an element. You can`t make it. You can`t substitute for it and no living thing -- humans,animals, vegetables, everything needs phosphorous to grow. You can`t grow anything without it, and we are mining it in what we call big AG, big agriculture.
CHARLIE ROSE: Right.JEREMY GRANTHAM: We`re mining it. It`s a finite resource, now that should make you pretty scared.CHARLIE ROSE:
Yes.JEREMY GRANTHAM: And you can calculate how long it will take to run out. And if you were for a second to takeout one country, Morocco, and say we will ignore their wonderful, cheap, high quality reserves, a dried up ocean,incidentally, how much have we got left?And the answer is at two percent a year growth to allow the Chinese to eat a bit of meat now and then we`ve got maybe50 years.
CHARLIE ROSE: And phosphorous in gone.
JEREMY GRANTHAM: And then --(CROSSTALK)CHARLIE ROSE: Well but -- you know, you`ve got to be optimistic. We have found ways to develop new things all along.
JEREMY GRANTHAM: But you can`t substitute for very few things in this world. You can`t substitute for water, not really for soil, not potassium and not phosphorus.
CHARLIE ROSE: Well but how do you know we are not going to develop a desalinization project that`s going to provide us all the water -- all of the water we need?
JEREMY GRANTHAM: Well, that`s well-responded because I am willing -- I am willing to not fight a war over water because water desperately tries to recycle. I mean it`s the most amazingly helpful product on the planet.
CHARLIE ROSE: Right.
JEREMY GRANTHAM: You take a really dirty polluted body of water, it evaporates, pure water and then falls where you need it I mean this is really helpful. Phosphorous doesn`t do that.
CHARLIE ROSE: Right.
JEREMY GRANTHAM: Phosphorous stays underground needing lots of energy to mine it. And it`s amazingly high quality.
CHARLIE ROSE: But hasn`t science for the most part, I mean you`re a numbers man again. But hasn`t science generally, you know, helped us -- I mean the reason --(CROSSTALK)JEREMY GRANTHAM: For 250 years.CHARLIE ROSE: Yes.JEREMY GRANTHAM: What a coincidence.CHARLIE ROSE: Science has helped us.JEREMY GRANTHAM: From about the time --
Then there is the impending shortage of two fertilizers: phosphorus (phosphate) and potassium (potash). These two elements cannot be made, cannot be substituted, are necessary to grow all life forms, and are mined and depleted. It’s a scary set of statements. Former Soviet states and Canada have more than 70% of the potash. Morocco has 85% of all high-grade phosphates. It is the most important quasi-monopoly in economic history.
Jeremy Grantham Warns About The ‘Most Important Quasi-Monopoly In Economic History’ “What happens when these fertilizers run out is a question I can’t get satisfactorily answered and, believe me, I have tried,” he writes. “There seems to be only one conclusion: their use must be drastically reduced in the next 20–40 years or we will begin to starve.”
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