即将到来的大宗商品价格噩梦

    The commodity price boom we've all been bellyaching about for the past six months started not in August, when the Fed chief first started talking about quantitative easing, but a full eight years earlier – when Bernanke was but a Fed governor and the housing bubble was a mere gleam in Alan Greenspan's eye.

    So says Jeremy Grantham, the value manager who helped found the Boston-based GMO asset management firm. Not just a savvy stock picker, Grantham is also a veteran worrier about the implications of population growth and resource scarcity, the sore subjects that are the focus of his latest quarterly letter.

    Though much has been made of the developing world's contributions to global growth, Grantham points to the cost of that growth, as measured via soaring commodity prices. The world, he writes, has been changed in ways we don't fully understand by the ascent of China, India and Brazil – a shift that is measurable at least in part by the surging price of food, metals and energy.

    Unlike so many pundits who would have you believe gas would instantly go back to $1.13 a gallon if only Bernanke would raise the fed funds rate a little bit, Grantham has no illusions about easy fixes bringing happy days back here again -- at least not for long.

    Yes, he says, commodity markets are easily bubbly enough to crash -- perhaps even bubblier than stocks were in 2000. If you are putting huge sums in commodity futures accounts and betting the ranch on $60 silver, take heed.

    But in a growth-addicted world you'd be a fool to expect the price of oil and copper and things like that to stay down for long -- which means an ever-rising tax on consumers and slower economic growth.

    "I believe that we are in the midst of one of the giant inflection points in economic history," he writes. "The world is using up its natural resources at an alarming rate, and this has caused a permanent shift in their value."

    Until recently commodity prices tended to fall over time as we used materials more efficiently – drywall rather than plaster -- or substituted other goods for those whose prices rose (aluminum and plastic mean cars are lighter now than they were in the good old days). Over the course of a century, an index of 33 commodities other than oil dropped at a 1.2% annual clip, as displayed in the GMO chart at right.

    This meant that food and clothes and other things, over time, tended to get cheaper in real terms, which gave people more money to buy other stuff – increasingly, in this country, stuff they often didn't need anyway.

    But it is starting to look like we are all done with that extra money thing. Since 2002, the commodity-deflation trend has reversed altogether. In a war-infested, credit bubbly decade, commodity prices have recouped all their declines over the past century.

    This is, to say the least, an ominous sign. The market, Grantham writes, "is sending us the mother of all price signals. The prices of all important commodities except oil declined for 100 years until 2002, by an average of 70%. From 2002 until now, this entire decline was erased by a bigger price surge than occurred during World War II."

    That is a big price surge indeed, and the date Grantham picks for the shift just happens to be a year after an event other commentators have already cited as a watershed for commodities: 2001 was when China, with its massive appetite for food and metals and other higher-living-standards stuff, joined the World Trade Organization (see chart).

    Grantham notes that this is no coincidence. China, he points out, accounts for more than half the world's consumption of cement, and nearly half its use of iron, coal, lead, zinc, aluminum and, oink oink, pigs.

    That voracious demand relentlessly pushes up prices – and Grantham emphasizes that supply and demand, rather than evil speculators or feckless central bankers, are the driving forces here, whatever posture our president might choose to take.

    The Monetary Maniacs may ascribe the entire move to low interest rates. Now, even I know that low rates can have a large effect, at least when combined with moral hazard, on the movement of stocks, but in the short term, there is no real world check on stock prices and they can be, often are, psychologically flakey. But commodities are made and bought by serious professionals for whom today's price is life and death. Realistic supply and demand really is the main influence.

    That is mostly bad news for American families, which as I may have mentioned once or twice have seen their wages fall some 5% since 2000. This means the less money to pay an ever-rising food and gas bill.

    Or, at least mostly rising. Markets that have gone parabolic, as the ones for many commodities have, are apt to, um, consolidate every once in a while at lower levels. Grantham ventures that the commodity markets' surging prices – and these markets' dependence on Chinese demand – are likely set us up for a huge price plunge at some time over the next year when if the weather turns less Armageddonish in 2011 or if Chinese growth starts to flag.

    If China stumbles or if the weather is better than expected, a probability I would put at, say, 80%, then commodity prices will decline a lot. But if both events occur together, it will very probably break the commodity markets en masse. Not unlike the financial collapse.

    So those who are now betting the ranch in commodity futures markets are likely to lose their shirts. Big surprise there.

    But afterward prices will resume their upward march, assuming we aren't all eating bugs by then, and we will all resume complaining about high gas prices -- at least till our politicians get their act together and devise some policies that will reduce our energy use and push us toward more enlightened sources.

    "We all need to adjust our behavior to this new environment," Grantham writes. "It would help if we did it quickly."

    Think that's happening any time soon with the current group in Washington? Expecting to hear a lot of sensible energy policies out of John Boehner, are you?

    No, because even after a decade that has bankrupted whole swaths of America, we still put our faith in the markets. Some day, we will learn that the outcome there is everyone but the odd John Paulson character ends up broke and utterly exasperated. But not any time soon.