Investment Bankers on Resource Depletion
A listener sent me this link to a report from Barclays Capital on the topic of resource depletion. Here's what Wikipedia has to say about Barclays Capital:Barclays Capital is a leading global investment bank. It is the investment banking division of Barclays plc which has a balance sheet of over £1.2 trillion (2008 BARCAP figures). Barclays Capital provides financing and risk management services to large companies, institutions and government clients. It is a primary dealer in U.S. Treasury securities and various European Government bonds.
And here's the first paragraph of the synopsis of the Barclays Capital report:Resource scarcity is the single most important social, political and economic factor of our era and will remain so for the foreseeable future. We are depleting the global stock of natural resources - in the broadest sense of that term - at an accelerating pace. This process is creating negative feedback in the shape of rising real resource prices and a degenerating ecosystem, in turn catalysing changes to the fundamental structure of the economy. The rise in per capita consumption has been vastly accelerated by rising prosperity in the developing economies. The scale of the potential increase in aggregate demand is large enough to warrant doubts that it can be satisfied. In many, if not most, instances, the more accessible stocks of resources have already been exploited. Increasingly, future demand will be met only by utilising the less productive and more marginal stocks. Given the pace of economic growth in the developing world, the supply/demand balance in most resources becomes critical within a one to two decade timetable. For some resource sectors, the prospect of complete exhaustion within this timeframe is a realistic scenario if hypothesised deposits and technological advances disappoint. Resource scarcity is likely to wreak significant changes to the global economy, ending the long trend of decreasing volatility in growth and inflation. These changes have profound implications for investors as consumption and investment patterns adjust to the new reality.
link: http://www.barcap.com/sites/v/index.jsp?vgnextoid=b605360dbeafe010VgnVCM2000001613410aRCRD
And here's the first paragraph of the synopsis of the Barclays Capital report:Resource scarcity is the single most important social, political and economic factor of our era and will remain so for the foreseeable future. We are depleting the global stock of natural resources - in the broadest sense of that term - at an accelerating pace. This process is creating negative feedback in the shape of rising real resource prices and a degenerating ecosystem, in turn catalysing changes to the fundamental structure of the economy. The rise in per capita consumption has been vastly accelerated by rising prosperity in the developing economies. The scale of the potential increase in aggregate demand is large enough to warrant doubts that it can be satisfied. In many, if not most, instances, the more accessible stocks of resources have already been exploited. Increasingly, future demand will be met only by utilising the less productive and more marginal stocks. Given the pace of economic growth in the developing world, the supply/demand balance in most resources becomes critical within a one to two decade timetable. For some resource sectors, the prospect of complete exhaustion within this timeframe is a realistic scenario if hypothesised deposits and technological advances disappoint. Resource scarcity is likely to wreak significant changes to the global economy, ending the long trend of decreasing volatility in growth and inflation. These changes have profound implications for investors as consumption and investment patterns adjust to the new reality.
link: http://www.barcap.com/sites/v/index.jsp?vgnextoid=b605360dbeafe010VgnVCM2000001613410aRCRD