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Grantham Warns Oil Spikes This Severe Always Trigger Recessions
- Russia’s war is a reminder of finite resources, investor says
- GMO co-founder says commodity prices near certain to rise
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Jeremy Grantham has a fresh warning about Russia’s invasion of Ukraine: oil-price spikes of this magnitude have always triggered recessions, and the global economy is at risk of much bigger challenges in the coming decades as finite commodities become scarce.
“It seems nearly certain that the trend in resource prices will continue to rise,” Grantham, the co-founder of Boston asset manager GMO, wrote in a paper published Wednesday. That threatens not only slower growth but also a disruption of political systems, as “most ancient civilizations were brought down by overuse of their resources.”