Consider this: It took all of human history into the 20th century to reach a population of 2 billion. But in just the next 40 years, the world will add another 2 billion (for a total of 9 billion). To Jeremy Grantham, who oversees $110 billion at GMO, such a dramatic rise in the number of consumers means a world in which agriculture, as well as oil, metals, and other materials, is deeply strained. That shift is already evident in soaring commodity prices. "The locomotive is not only coming," he says, "it's whistling loudly." A recent GMO study concludes that commodities will continue their march upward for decades. In the short term, Grantham notes, grains could fall hard with better weather (after a historically bad year). And clearly it's best to avoid, say, the precious metals that are hitting all-time highs. Still, in the long run, he says, "fortunes will be made in raw-material ownership."
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