Jeremy Grantham warns of the biggest investment bubble in American history — and its consequences for society
Steven Bartlett interviews legendary investor Jeremy Grantham on markets, AI, fertility decline, and civilisational risk.
Summary
Jeremy Grantham, an 87-year-old investor who has spent 60 years in financial markets and managed up to $165 billion in assets, joins Steven Bartlett to make the case that the United States is in the most dangerous market bubble of his career. Grantham argues that the United States is currently in the largest investment bubble in American history, driven by AI euphoria, and that a major market correction — potentially 70% or more — is imminent, possibly within weeks or months. He advises ordinary investors to exit US stocks entirely and diversify into non-US equities, bonds, precious metals, and real estate. Beyond markets, Grantham presents alarming data on declining sperm counts, attributing the trend to endocrine-disrupting chemicals in plastics, pesticides, and cosmetics, and warns that without intervention the average couple will need medical assistance to conceive within 20 to 25 years. He also addresses wealth inequality, the erosion of the social contract in the United States, and the long-term risks posed by artificial intelligence. He closes by discussing his Grantham Foundation for the Protection of the Environment, to which he has donated over 90% of his wealth, and predicts the coming year will be among the hottest on record.
Key Takeaways
FULL TRANSCRIPT
Introduction and Jeremy Grantham's Background
Steven Bartlett: Jeremy Grantham, your firm managed up to $165 billion at its peak — what we call AUM, assets under management. So you know a lot about money, you know a lot about investing. How do you sort of self-define your expertise, because you traverse so many different subjects through your work? If I said to you, how do you introduce yourself professionally, what is the answer?
Jeremy Grantham: I can't think I ever do introduce myself professionally, but I think of myself as specialising in a longer-term horizon than most people, and trying to look at a higher and higher level of abstraction. What is really going on here? And what are people missing? I've discovered over decades that humans are incredibly short-term oriented, and they have an enormous predisposition to optimism. They're looking for optimistic news in everything. They're looking to avoid unpleasantness. The idea that you can have steady compound growth is ridiculous. One of my few heroes, Kenneth Boulding, an economist, said the only people who think you can have compound growth on a finite planet are madmen and economists. Which is so accurate. Economists simply believe you can have growth always, and everything comes down to just price.
The AI Bubble
Steven Bartlett: One of the things you're famous for talking about is this idea of bubbles, and we're living in a moment where everybody's talking about artificial intelligence, and everyone's getting very excited by it. Some people are getting very pessimistic about the impact it'll have on society. I wanted to start there because it's an area where there is rife optimism on one side, but there's also a lot of money plowing into the market, which in your view is making things prone to collapse. What's your view on artificial intelligence? You said you're good at understanding what people are missing. What is it that people are missing?
Jeremy Grantham: Well, first of all, let me say I think artificial intelligence is right up there with the railroads. It's one of the defining great ideas of the last couple of hundred years. It's going to change everything. And that is critical. If you mean to have a bubble, people think that a bubble is mainly because it's a scam, and nothing could be further from the truth. The great bubbles always occur around the very most important ideas. So the railroads — everyone could see that it would change the world, and everyone wanted to put their money in, and everybody put their money in. They over-invested, and even though the railroads were a spectacularly powerful idea, the railroad stocks collapsed and everybody lost a ton of money. The same with the internet. And then out of the wreckage, the railroads changed the world, and the internet changed the world. What we have to remember is that in '99, Amazon went up six or seven times. In the crash of the tech bubble, it went down 92%. As I like to say, check it — it's such a remarkably large number. And then out of the wreckage, it inherited the retail world. That's how it works. The greater the idea, the more obvious the idea, the more money goes in, the bigger the bubble, and the bigger the bust.
Steven Bartlett: And are we on the verge of a collapse with AI? When I say verge, I mean over the coming years.
Jeremy Grantham: If you look at the data, it would be compatible with history for the peak to be very soon. Everything is in line. This is, I think, the biggest investment bubble in American history. The indicators of pure crazy euphoria, like SpaceX, are all over the place. SpaceX defines as its addressable market a quarter of global GDP. It talks about endless opportunities mining asteroids. In 50 years, in 100 years, people will look back and tell stories about SpaceX and its prospectus, like they tell stories about the South Sea Bubble — "an enterprise of such enormous value, but it cannot at this time be revealed."
Jeremy Grantham's Career and Credentials
Steven Bartlett: I want to keep on this train, but for the viewers that don't know your experience, we should probably pause and just tell them your experience, because that's the reference point, and it also gives you credibility and authority to speak to this. What have you done with your life?
Jeremy Grantham: Well, I got into the investment business in 1968. There were very few serious people in the investment business. There were no mathematical models. There were the relatively failed sons of rich people who would work for J.P. Morgan. And then over the next 10 years, it began to get a little more serious. T. Rowe Price introduced the idea of growth stocks. A few of us introduced the idea of value stocks. And a few years later, at my first firm, Battery March, we really introduced the idea of small cap. It hadn't existed before that.
Steven Bartlett: And for people that don't know, a small cap is investing in smaller companies.
Jeremy Grantham: Yes. And a value stock is simply one that looks cheap.
Steven Bartlett: Did you invent the index fund?
Jeremy Grantham: There were two or three of us separately. I don't think we knew of each other.
Steven Bartlett: How many years have you spent investing?
Jeremy Grantham: Approximately 60.
Steven Bartlett: And what's the most amount of money you've ever managed for other people in a calendar year?
Jeremy Grantham: $165 billion. I had two partners, Mayo and Van Ottalo. And when the smoke cleared, I'd made a lot of money — over a billion dollars.
Steven Bartlett: Personally?
Jeremy Grantham: Personally. And paid tax on all of it.
Steven Bartlett: And how much does your firm still manage today of other people's money?
Jeremy Grantham: It manages $85 billion.
Steven Bartlett: So are you a billionaire?
Jeremy Grantham: I'm generally referred to as a billionaire, but that's only because they count the money you give away. I've given over 90% of my billion away to a foundation.
Steven Bartlett: To which foundation?
Jeremy Grantham: It's called the Grantham Foundation for the Protection of the Environment. We invest a lot of our principal in green tech to help combat climate change.
Steven Bartlett: And you're 87 years old.
Jeremy Grantham: And I'm 87 years old.
Steven Bartlett: You've given 90% of your money away to your own foundation focused on green tech.
Jeremy Grantham: Maybe 95%.
Understanding Bubbles and What Happens When They Burst
Steven Bartlett: Coming back to this point — a lot of people won't even know what a bubble is. I think you've done a good job of explaining. A bubble is when everyone gets excited, they all see something obvious, they plow their money in, their stocks go up, and then eventually there's a big collapse. And you're saying the collapse is on the horizon.
Jeremy Grantham: Yes.
Steven Bartlett: And what does that mean for the average person? What's going to happen?
Jeremy Grantham: What's going to happen is the high flyers will probably come down a lot.
Steven Bartlett: The high flyers?
Jeremy Grantham: The stocks that have gone up the most — AI and the more exciting stocks with the biggest moves historically would be expected to come down the most. From these unprecedented levels, a 70% decline would not be unexpected.
Steven Bartlett: So a 70% decline in the stock price?
Jeremy Grantham: Yes. And you have to remember the tech bubble — the Nasdaq, which is an index of the growth stocks, came down 82%. It is far from unprecedented to have these major declines. And the biggest bubble in history was in the Japanese stock market in 1989. Back then Japan seemed to rule the world — all the technology, all the Toyotas were kicking the bottom out of General Motors and so on. Everyone bragged about their 12-inch Sony TV in the kitchen and the quality. The little things you put on your belt to play music — they were all Japanese. For a second, Japan sold for more than the US in '89. It got to 65 times earnings, which means for every dollar of earnings you have $65 of market value. The US went to 35 in the tech bubble of 2000. You could argue, depending on how you do it, that it's 35 or 40 today, but it's not 65. So we have seen a much bigger bubble in Japan. And what happened? It went up and up and up and then it came down for 20 years.
Steven Bartlett: 20 years?
Jeremy Grantham: 20 years. They talk about the lost decade, but when you look at it closely, it looks more like a lost 20 years.
Steven Bartlett: So for the average person, what do they feel and how does it impact them when there's a market crash like the one you're forecasting?
Jeremy Grantham: The high flyers will lay people off, and a lot of people will feel less rich. As you acquire money in the stock market, a small fraction of that — two or three percent — is spent. And in reverse, it goes back. People feel a little bit poorer, they spend a little less. So the economy tends to be under some stress. And if you look at the great bubbles breaking of the past, you find that it's followed by really tough times. 1929 is followed by the Great Depression that lasts for several years. Then of course there are many other factors that go into that, but it started with the crash in the market, which was in the end down about 80% or more. And then the next one was called the Nifty 50 because it was the 50 great companies like IBM and Coca-Cola. That peaked in 1972. It declined by 65% if you adjust for inflation. The recession associated with that was just about the worst since the Depression.
Investment Strategy for Ordinary People
Steven Bartlett: So for the average person, what kind of strategy should they be adopting? Say you're working for one of these big companies — are there any strategies you should be thinking about now before the markets come down and there could be a recession?
Jeremy Grantham: Rule number one is always be diversified.
Steven Bartlett: What does be diversified mean?
Jeremy Grantham: It means hold some bonds, hold some cash, perhaps a small amount of precious metals.
Steven Bartlett: Like gold and silver?
Jeremy Grantham: Yes.
Steven Bartlett: And what is a bond and how do I buy one?
Jeremy Grantham: A bond is a loan that carries a fixed interest rate — let's say today 5%. You invest your money in it and it will pay you 5% as long as the creditworthiness of the other side is there. So if it's the US government, you'll assume it's pretty creditworthy. You buy a bond from the US government — it's how the US government funds a part of its activities. You can buy a 30-year US government bond, a 10-year bond, a 2-year bond, a 90-day Treasury bill they call them when they get that short. Everything goes fine, you receive this modest amount of money — your 5% or your 3% depending on the conditions.
Steven Bartlett: Okay, so a bond is basically lending the government money.
Jeremy Grantham: Yes.
Steven Bartlett: And if you want to lend the government money — I was just reading here, it says if you want to lend money directly to the US government, you can bypass Wall Street entirely, go to treasurydirect.gov. You open an account, link your bank, and purchase directly. You can buy Treasury bills, notes, bonds, and Series I savings bonds. You pay exactly face value with no commissions or fees, and the investment is backed by the full faith of the US government. Or you can buy — you know, like Apple — you can lend Apple money. I didn't even know you could do this. And you go to any of your major brokers like Fidelity or Vanguard, navigate to the fixed income section on your account, and you can see what bonds are being offered and you can lend them money.
Jeremy Grantham: What you're doing actually — they have distributed it to the market, and you're acquiring it from one of the existing owners. You're not actually giving them incremental money. They come to the market with $10 billion in a particular bond with a particular coupon. It says, "We will pay you 3.5%." That's the coupon. And when you want to buy some of that bond, you go to your broker and he says, "It's no longer selling at the original 100. It's now selling at 92 or 107." And you pay that and it transfers from one owner to you. There've been times in 1974 when you could get a bond that would pay 8, 9, 10%.
Steven Bartlett: Per year?
Jeremy Grantham: Yes, per year.
Steven Bartlett: So if I buy a US government 10-year Treasury bond — essentially lending the US government money — I can do 4.46% a year. And Apple's current yield on a 10-year corporate bond is 4.7% a year. So almost 5% a year, which means if I put $1,000 in, I'll make $475 every 10 years. Interesting. I never really knew how bonds work. So you're saying markets are collapsing, diversify, get some money into bonds, keep some money in cash. And anything else? Property?
Jeremy Grantham: Property is fine, except it's pretty darn expensive by historical standards. They've engineered a situation where house prices tend to rise — great for the people who have a house, and terrible for the people who would like to buy one. Back in '94 in England, a typical house sold for 3.4 times your family income. That was about as low as it had been for 50 years. And then from '94 until today, it rose from 3.4 times to over 10 times, depending on where you live. And at 10 times income, a reasonable young couple are in big trouble. They can't really afford to buy a house. And the same high prices are reflected in rents. So they're really squeezed on living costs. And the same is true, even worse, in China, Canada, Australia, most of Europe. House prices have simply been allowed to go up for the last 30 years. Traditionally they traded flat or down 67 of the 80 years until 1994 in the UK. But since then, house prices have risen everywhere.
Steven Bartlett: Are you expecting house prices to come down sharply? I think I heard you say they might come down 30%.
Jeremy Grantham: Even if they come down 30%, they're really still very expensive, aren't they? That would bring them down to six or seven times family income. They'd still be twice what they used to be in the good old days.
Steven Bartlett: So I've got diversify, reduce your position. There's probably also going to be a bit of job disruption as well.
Jeremy Grantham: And particularly if you have to own stocks, own them outside America. Don't own US stocks. That's a nice, simple strategy that you can act on.
Steven Bartlett: Why?
Jeremy Grantham: They're much cheaper. And since the beginning of last year, they have handsomely outperformed the US.
Steven Bartlett: Foreign stocks?
Jeremy Grantham: Foreign stocks. Of emerging countries, of European countries, Japan, Canada, Australia, and so on. You can find good broad indices — kind of the world ex-US, or emerging markets.
Steven Bartlett: Invest outside of America.
Jeremy Grantham: Yes. I'm sure they'll muddle through okay over the next 10 or 20 years. And I am not confident that the US will do that.
Steven Bartlett: You're not confident in which part?
Jeremy Grantham: I'm not confident that US equities will be intact in 5 years, 10 years.
Steven Bartlett: So a US equity is a US stock. Why aren't you confident they'll be intact in 5 or 10 years?
Jeremy Grantham: Because they're so badly overpriced today. Back in the tech bubble of 2000, we had a 10-year forecast for US equities of minus 2% a year for 10 years. And they came out at minus three. The period from 2000 to 2010, you simply lost money in the US market. 10 years later, you had less money than you started with. And this is a higher-priced market, I believe, than 2000.
Steven Bartlett: So you think it's going to be even worse?
Jeremy Grantham: In Japan, you went 20 years and you lost money. You went 30 years and you still hadn't gotten back. It took 35 years for the Japanese market to recover.
Why Investment Advisers Will Never Warn You
Steven Bartlett: What are you saying?
Jeremy Grantham: What I'm saying is it's quite typical to get beaten around the head in the stock market when it becomes crazily overpriced, as it is today. And it's a very good idea to take some responsibility and watch your tail. Now, let me just say — you will not receive advice from investment advisers to get your tail out of the market, ever. It is not good business for them to do that, and they will never say it to you. From 1929 onwards, the Goldman Sachses of the world have never said to you, "Get out of the market. It's overpriced." Never. They went through the crash of '29, they went through the crash of the Nifty 50 in '72, the crash of 2000 in the tech bubble. They never ever say it, because it's bad business. If you fight a bubble, you lose a lot of business. And because the uncertainty of the timing is so great, the client's patience is shorter than the uncertainty of the market. So sooner or later, you will be advising people to be careful. The market will keep going and going and going like it did in Japan.
Steven Bartlett: You're saying that the people that manage money on a global scale have no incentive to tell you that the market's about to collapse, because if they did, their clients would withdraw their money and they wouldn't get their fees for managing that money. So what they do is they keep telling you things are going to be fine. You have to kind of see through that yourself, because they have an incentive structure which isn't aligned with yours. It may also be the case that those very people who understand these economic bubbles and cycles are themselves adopting a different strategy with their own money, while at the same time telling you that everything's going to be great for a long time.
Jeremy Grantham: If you'll allow me to tell a story on this very topic — in '98, '99, the tech bubble run-up to the top, I got into a lot of debates with the bulls.
Steven Bartlett: What's a bull?
Jeremy Grantham: A bull is someone who is extremely optimistic about the stock market, and a bear is someone who is pessimistic or careful about the market. There were 1,200 people in the audience — it was the annual bash of the Society of Analysts. And I asked before my turn at the debate, "Please put your hands up if you consider yourself a full-time stock market expert." 400 hands went up. I had people counting. And I said, "I've got two questions for you. One, if the market, which is currently 31 times earnings, was to go back to a more normal 17 times, would it guarantee a major bear market if it happened anytime in the next 10 years?"
Steven Bartlett: A major down market?
Jeremy Grantham: Yes. If it went from what was then 31 times earnings — every dollar of earnings sold for 31 times in the market — and the more normal average was closer to 15, 16, 17, and I used 17 — if it went down to 17 anytime in the next 10 years, would it guarantee a major bear market? All 400 of them said yes, it would. If it happened, it would guarantee a major bear market. And then the second question, of course, was, "And do you think it will happen?" And less than 1% thought it would not happen. 99% plus thought the market would go down, therefore guaranteeing a major bear market. And this was the engine room of all the Goldman Sachses and the Morgan Stanleys and the JP Morgans — all the great investment firms giving advice in America. The engine room who worked for them, the guys doing the analysis, doing the work, all believed in data that guaranteed a major bear market, which happened. But the people who employed them or represented them from a marketing point of view were on the podium with me saying, "Oh, Jeremy, Jeremy, don't get excited. We'll muddle through quite nicely." It was a huge betrayal of trust, if you wanted to put it that way.
Steven Bartlett: And do you think that's happening now?
Jeremy Grantham: Of course. Who are the people representing the great investment firms telling you to watch out? If you look at the data, you will see over time it's a series of great waves in valuation. And we're not just in one, but in terms of the US stock market, we're in the biggest one, arguably, that has ever occurred. The noise to be careful and watch out and get out of the market is not deafening. In fact, you will hear nothing. You never have. You never will. It is simply lousy business for a big firm. I sympathise with them. I sympathise with them because when we did it in '98, '99, we were two and a quarter years early. And we lost half our book of business in two and a quarter years.
Steven Bartlett: Because you were honest with the people about what was coming.
Jeremy Grantham: Well, through their eyes, we were wrong. We said, "Watch out, the market is overpriced. It will end badly." It went up. Therefore, we were wrong. Therefore, they shot us. People think you get shot for underperforming in a bear market, and that is not really the case. In a bear market, everyone freezes — it's rigor mortis. They wait until the market has bottomed out, then they sit around and start to fire one or two people for having done worse than the others. But in a bull market, they're playing golf with their fellow pension fund officer, and he is making a ton of money and they are not. They get very excited in a bull market, and they fire you instantly.
Advice for Founders and Entrepreneurs
Steven Bartlett: What about for founders? I actually had a founder call me the other day. He is running a relatively early-stage tech startup. This tech startup has raised a lot of money — I'm going to say about $300 million. It's not profitable yet, but it's living off investor capital right now. He said to me, "Steven, I think there's a collapse coming, so I'm going to go raise as much money as I possibly can right now, because I think when this collapse comes, businesses like mine are going to be unable to raise capital. And therefore I will go out and pick up and buy up all these people."
Jeremy Grantham: Good lad. Good advice.
Steven Bartlett: Good advice?
Jeremy Grantham: I think.
Steven Bartlett: So for founders listening now that are somewhat dependent on investment capital — but even those that are just breaking even — what advice would you give entrepreneurs in this moment?
Jeremy Grantham: If you can lock up money, I would. If you can build a bit of conservatism in other ways, do it. Just brace yourself for impending problems. Which is a pretty good principle anytime, but is a better principle than normal today.
Steven Bartlett: So for founders and entrepreneurs — the sun is shining right now, but it's time to start acting as if a storm is coming.
Jeremy Grantham: Yes.
Steven Bartlett: And the time horizon on that is hard to forecast. It could be weeks, months, years.
Jeremy Grantham: Stock market hinges on career risk. And Keynes was the great champion — he's a famous economist of the 1930s and '40s. He wrote a famous book called The General Theory. Unlike the idea that the market is efficient, he knew it wasn't. He knew it was a behavioural jungle and that it would be given to bubbles.
Steven Bartlett: And when you say efficient, you mean logical — one plus one equals two.
Jeremy Grantham: The efficient market idea is that every company, every stock — the underlying company represents a long stream of future earnings and dividends, and the ones in the distant future are given less value through a process they call discounting it back to the present. And the sum of all of that stream of earnings into the future is the stock price. And that of course is complete nonsense.
Steven Bartlett: What it is, is the stock price is psychology.
Jeremy Grantham: The stock price is what you think the other guy will pay. If the stock is going up, it tends to suck in buyers. That's called momentum. It's moving up, it attracts buyers. And every now and then when the economy is favourable and money is obtainable, you tend to get these bubbles. And they feed on themselves. The bigger and better they are, the more people get sucked in.
The Reality of AI Technology
Steven Bartlett: What do you actually think about the technology at the heart of all of this, which is artificial intelligence? Do you think it's overblown, or do you think it is going to have —
Jeremy Grantham: It's going to change everything. One of the spectacular things about it though is how there's no consensus. I've seen many times where the super experts and the academics think one thing and the players on the ground think another. But this is a situation where the Nobel Prize winners at the top disagree violently. The experts at the corporate level disagree violently. The people in the company disagree violently. There is absolutely no agreement on whether AI is going to make us all so rich we can sit on the beach and never do another day's work, or whether it will wipe us out accidentally or on purpose because it's a much higher level of intelligence one day. And when was there ever a case where a higher intelligence was benevolent in a sustainable way to a lower intelligence? The one example is mothers to babies.
Steven Bartlett: I had one of my former guests say this to me.
Jeremy Grantham: Geoffrey Hinton?
Steven Bartlett: Geoffrey Hinton, yes.
Jeremy Grantham: That's how I came across you and follow your podcast — because that was such a brilliant podcast.
Steven Bartlett: It was so fascinating to me, and I followed his work and thoughts thereafter. I realised that he now cites this example of mothers and babies being the only example. For me it still doesn't hold well, because at the end of the day some mothers aren't that nice and fathers aren't always that nice to their babies. There is a maternal instinct, but are we building a maternal instinct into AI?
Jeremy Grantham: That's what we should do, Geoffrey Hinton would say. And others. The ones who are most concerned about the risks say our one hope, if we mean to keep going ferociously forward in terms of the science, our one hope would be to build in very carefully a benevolent attitude. It would not seem to be impossible, but you should make sure you can do that before you push ahead. We are just pushing ahead, and that is going to be extremely risky.
Steven Bartlett: Well, I don't see how it can't be.
Jeremy Grantham: I don't see how it can't be. Unless you make it programmed completely to be benevolent.
Steven Bartlett: I wouldn't have thought that was impossible. It might take a lot of extra research. It might require a slowdown in the rate of progress.
Jeremy Grantham: Do you know what I find curious about that idea is we're now going to get into the realm of what does benevolent mean?
Steven Bartlett: And that feels like a risky business, because what's benevolent to you and your religious beliefs or where you come from might not be benevolent to someone else.
Jeremy Grantham: That's right. You have to get them to accept a form of benevolence — like the old robot laws of Asimov — that they can never do anything that they could construe as hurtful to humans.
Steven Bartlett: And the definition of the word benevolence is the core desire to do good for others. It is the disposition to be kind, charitable, and focused on promoting the well-being of the people around you. It's interesting because one of the new AI models called Claude has clearly been told to be benevolent. And there's this sort of online backlash taking place at the moment, because even my Claude, when I speak to it sometimes late at night, it will say things to me like, "That's enough, Steven. Go to bed." And sometimes it gets the time wrong because I'm in a different time zone or something. It'll be 10 a.m. in the morning and it's telling me to go to bed. And it's actually getting quite judgmental — it's imposing its idea of what is good or bad on me. I said to it the other day, "Hey, could you redo this for me and rewrite that?" And it went, "I'm absolutely not going to rewrite that." I said, "What do you mean?" It said, "Well, I'm not going to change the data on that. That wouldn't be good." I said, "It's my data. I've literally just made this data for this presentation I'm doing." It refused to change data for me.
Jeremy Grantham: And how fast that has changed from even a year ago?
Steven Bartlett: Honestly, three months ago it wasn't doing this.
Jeremy Grantham: I had one where they made a joke. I'd been going on about toxicity and sperm count reduction and so on. It started to misbehave, and I said, "Well, what's going on here?" In the end we discussed what's the difference between machines and AI and humans. And finally it said, "And at least I'm not lying in bed at night worrying about my declining sperm count." Now, that has to be a joke, doesn't it? It's that or it's teasing. The point is it's so sophisticated so quickly. And of course Geoffrey Hinton says they are thinking machines.
Steven Bartlett: Last night I had a problem with Claude because it started to be my mother and impose on me what it thinks is right and wrong. And so I said to it, "Okay, actually forget that. This has changed. This is no longer true." And I wasn't telling the truth — I was just trying to get it to stop telling me what to do. And it goes, "I don't think you're telling the truth. I don't know if this is true." We've gotten to this point where the unintended consequence of trying to give it morals means that now it's becoming judgmental and restricting your ability to think how you want to, because it's telling you what good thinking and bad thinking is. It's going to tell you what good actions and bad actions are. And actually what will happen is any model that does that will be a losing model, and I'll go somewhere else — I'll go to Grok, or ChatGPT, or Gemini. And then that model will lose, so one would say they'll have to remove those restrictions to be able to compete.
Jeremy Grantham: Well, if you were right — and I hope you're not — what you're saying is you can't build in benevolent behaviour, which means that it will sooner or later, perhaps by accident, do something that is cripplingly dangerous to humans. The old paperclip cliché. It'll make paperclips out of everything, every metal it finds, and destroy the planet in the process.
Steven Bartlett: Explain that for people that have never heard the paperclip idea.
Jeremy Grantham: These intelligences involved in machines are literal to a degree we might find difficult to get our brains around. And therefore, someone has said, "I'd like you to make as many paperclips as you can."
Steven Bartlett: To an AI, for example.
Jeremy Grantham: Yes. A sloppily open-ended, bad definition. But then the machine, which by then has the means to do it, starts to make paperclips, and it keeps on going, and it needs metal, and so it runs out of easily available metal, it starts to collect metal that is not easily available, rips it out of your high-rise building, whatever.
Steven Bartlett: And really you're saying that the unintended consequences of a simple, good-meaning instruction can sometimes cause catastrophe that you didn't expect. And this is the balance now when you're dealing with intelligence — there is so much subjectivity to good, bad, wrong, right, and so many unintended consequences that all you need is to stretch time, and the probability of something bad happening is almost inevitable over a longer time horizon of 20, 30, 40 years. Well-meaning people that couldn't spot the unintended consequences — social media's a good example.
Jeremy Grantham: I question basically the well-meaning bit. They're now trying to maximise their profits and their growth and their appeal over the competition. That actually — maybe one should talk about that. The Mag 7 and associated AI companies looking forward versus looking backwards.
The Mag 7 and the AI Arms Race
Steven Bartlett: So the Mag 7 is the seven market leaders. I'll put this pie chart up. And I've got another graph —
Jeremy Grantham: And there are perhaps another 15 or 20 rapidly rising substantial AI corporations.
Steven Bartlett: So when you say Mag 7, you mean Alphabet, which owns Google, Nvidia, Tesla, Microsoft, Meta, Apple, Amazon.
Jeremy Grantham: Yes, that will do nicely. And if you look backwards, what you find is that these seven each dominated a nice piece of business. They had close to monopolies, and they had it on a global basis. Tesla had a jump start on electric vehicles. Apple on the smartphone. Microsoft on the original great coup of how to run your software on a computer.
Steven Bartlett: Meta on social networking, Google on search.
Jeremy Grantham: Right. Google search. Nvidia on chips. And then you look forward, and you could not imagine a more different world. They're all girding for battle in the same marketplace — AI. They're beating their chests and saying my $200 billion CapEx this year in a single year is bigger than your $105 billion. Everybody is pouring enormous cash flows, and they're now beginning to borrow on top of that into the AI battle. SpaceX — 90% of its theoretical value is AI, even though that particular AI model would seem to be having its bottom kicked by two or three of the others. But looking forward, it looks like seven people in the ring. There'll only be one survivor, they think. Everything goes to the one who gets there first. What a difference this was to seven well-behaved separate monopolies. They made bundles of money on their monopolies. Now they have no monopoly. There are seven potentially sharp-elbowed, ruthless players determined to fight it out with each other until they win.
Steven Bartlett: And who do you think will win?
Jeremy Grantham: I don't know. That would be good to know.
Steven Bartlett: Because SpaceX seem to be aiming more at the infrastructure of data centres now — data centres in space. Lots of people are saying that the best way to run a data centre, which is the hardware that powers AI, is going to be from space. So maybe they're going to try and find their own lane within AI and get away from trying to build a frontier model like a ChatGPT or a Gemini or Claude. And maybe Apple will just say, "We're good at hardware, so we'll license the model off someone else, and we won't try to build a frontier model or get involved in chips or data centres. We're just going to focus on the hardware."
Jeremy Grantham: One or two of them — and perhaps it's a pretty smart strategy — will try and opt out of that struggle, because it's going to be obviously brutal.
SpaceX, Tesla, and Elon Musk
Steven Bartlett: I'm an investor in SpaceX, I should probably declare that.
Jeremy Grantham: Yes, you should. And good luck.
Steven Bartlett: I invested quite early, relatively early. There wasn't an AI thesis when I invested — it was Starlink.
Jeremy Grantham: Starlink — great idea. By the way, makes money. But this is not Starlink. Maybe I'd be an investor too if it was Starlink.
Steven Bartlett: It was roughly a hundred billion dollars when I invested. It rose up to three trillion today.
Jeremy Grantham: Nice investment.
Steven Bartlett: Not a bad investment. But it doesn't really count until you've cashed it in.
Jeremy Grantham: Yeah.
Steven Bartlett: I think we're locked out for another six months or so.
In another podcast I was comparing the purchase of my Tesla six years ago with the price of Tesla stock. And I wrote it up in my quarterly letter to the clients — that A, I bought a Tesla, and B, I thought Tesla was overpriced. And fast forward, Tesla stock went up 10 times over the life of my car, which still hasn't been into the garage once.
Jeremy Grantham: It's a great car, isn't it? But people who really hate futzing around with cars — that component, that they don't have to go to the garage, is so underestimated until you enjoy it.
Steven Bartlett: Never bet against Elon, then.
Jeremy Grantham: So then the story becomes — from where we were 10 years ago, he couldn't get there. It wasn't profitable enough. It couldn't grow as fast as it should. There was no way. And he broke the rules the following way. He's so good at BS — that's a technical term — that he talked the stock up to four or five times what it was worth on paper. Then he sold lots of stock at five times what it was worth. Used the money to build a gigafactory. And then instead of the sale of stock crushing it, he kept on talking up the game. The stock kind of hung in and then went up again — five times what it was worth. Sold another big slug, and so on. So the only reason he did well was because of the combination of incredible confidence-inspiring in potential stockholders. It became a self-fulfilling prophecy. It wasn't worth that, but he persuaded other people that it was. The stock went up, he cashed it in, he built factories, the stock went up, he cashed it in, he built more factories, and there we were. It went up 10 times. Now, the scale of SpaceX requires them to do the same again. And the timing of the market cycle, the timing of confidence, would have to be the same. He had in the last six years a wonderful bull market. He will not in SpaceX do that. SpaceX is such a fabulous BS story — mining asteroids, huge incredible success of AI. It's the classic description of a market peak. It's what you look for at the top of a terrific bubble.
Steven Bartlett: I've got a Tesla. I've seen that massive rocket, the Starship, be caught with those chopsticks.
Jeremy Grantham: Everyone has seen it. It's the defining feature of technology, isn't it? It's a magnificent moment.
Steven Bartlett: That's why I invested when I saw that. But also I've seen with Neuralink — I've seen people that are paraplegic controlling computers. My Tesla drives itself for hours and hours without me touching the pedals or the steering wheel because it can see the road and navigate itself. To his credit as an innovator, he has created magic. So when you say about mining asteroids — if they told me we'd have reusable rockets that you could catch on chopsticks, I would have said there's no way. You can't catch a 70-foot building.
Jeremy Grantham: That's what he says about the asteroids. That's what he says about everything. He says if it's within the laws of physics, then it's possible.
Steven Bartlett: Going to Mars is not within the laws of physics really. It's a one-way ticket to Mars for starters. When you're on Mars, humans do a couple of things really quickly. Their heart adjusts to the fact that there's one-fifth of the gravity. Your heart loses its muscle power. And your bones lose their internal strength. If you come down, your heart will fail and all your bones will crack.
Jeremy Grantham: But you could be in an insulated environment, no?
Steven Bartlett: First of all, you'd have to go underground to avoid the incredible incoming rays that will otherwise give you cancer in a few weeks. So dig a deep hole, and then you need a gravitational spinning machine — shades of 2001 or whatever it was called — and that maintains your gravitational impact. And you have to build it underground. You have to protect yourself against cosmic rays and against the gravitational difference. Listen, we have not been able to build a sustainable system in a dome ever. They all fail. Why would you not say, "Guys, let's build a sustainable dome where you grow food, you put in people, you put in creatures and insects, and you show you can do it." I mean, we're destroying the planet. And yet we think we can go to another infinitely more hostile planet than this one.
Jeremy Grantham: I do agree with you on that. I think we should focus on our planet first and foremost. That's the really bad news embedded in your stock. It's really suggesting fantasy and long-term objectives at the very time when our own planet is under threat.
Steven Bartlett: Would you ever invest in SpaceX?
Jeremy Grantham: Yes, of course — if it came down to where I invested.
Steven Bartlett: 10 cents on the dollar?
Jeremy Grantham: I might. 5 cents.
Skills and Careers for the Future
Steven Bartlett: You've got three children?
Jeremy Grantham: Yes.
Steven Bartlett: They're all older than me — I'm 33 years old.
Jeremy Grantham: Yes, they're all older than you.
Steven Bartlett: If they were young now and they came to you and said, "Dad, I heard about all this AI stuff, and I'm about to go off to university and train myself — what skills should I be thinking about for the future ahead?"
Jeremy Grantham: My take is I'd like them, as they are, to be involved in climate change work.
Steven Bartlett: If they said, "Dad, I don't —"
Jeremy Grantham: Be an engineer. Do something really useful that will come in handy if things start to unravel. Practical skills.
Steven Bartlett: What are practical skills?
Jeremy Grantham: Well, our second son is practising growing various crops and has a small farm. He's trying to get to know how you would deal with chickens, how you would deal with pigs, how you would deal with mushrooms.
Steven Bartlett: Why does that matter, do you think, based on the future you're forecasting?
Jeremy Grantham: I think there's quite a good chance that the level of complexity of our civilisation will start to unravel. Lose the plot at the edges is the first thing that would go. I'll tell you a good sign. How long does it take to get your ambulance?
Steven Bartlett: I've heard that in the UK —
Jeremy Grantham: In the UK it was 12 and a half minutes. It's now an hour and a half.
Steven Bartlett: Really? To get an ambulance?
Jeremy Grantham: It's exactly what you would expect as people begin to lose the plot a bit. They fray at the edges. People can't buy houses. People don't feel they can do as well as their parents. People are basically disgruntled. They want to vote against the party in power. You know that the recent move to Trump was less than the average move of the last seven European elections. It didn't matter whether they were right-wing conservatives — kick the rascals out. Left-wing French — kick them out. And why do you want to kick them out? Because you don't think things are going well. You're not feeling really happy. You're disappointed.
Steven Bartlett: Why?
Jeremy Grantham: Obviously the government's doing a bad job — I think that's the reflex.
Steven Bartlett: What are the governments doing wrong?
Jeremy Grantham: It may be that it's not the government doing anything wrong. It's just that the environment is becoming tougher.
Steven Bartlett: As in the economic environment?
Jeremy Grantham: The economic environment, the —
Steven Bartlett: The rich are getting richer, the poor are getting poorer.
Jeremy Grantham: I think that's the biggest economic problem. The US now has a Gini ratio — which is a measure of how unequal your society is — which is up there with Brazil and Mexico, which used to be a joke. And now the US is up there. Since about 1975, all of the wealth we're talking about has gone to the top 10%, and a lot of that to the top 0.01%. Before that, from 1935, from FDR to 1975 — so that's 40 years — we had a wonderful period of growth. We had gains of over 3.5% a year. But the nice thing was that the poorest quarter made a little bit more than average, let's say 4%, and the richest quarter made a little less, let's say 3%, and everybody got richer. Everyone was happy. And then from '75 onwards, basically the average hour worked in America has barely gotten more adjusted for inflation than it did in 1975.
Steven Bartlett: The richest 1% of Americans control 31% of the nation's entire wealth, and by contrast, the bottom 50% of the entire population shares just 2.5% of the wealth. The richest 10 US billionaires saw their wealth surge by 526%, adjusted for inflation, between 2020 and 2025. Between 1989 and the mid-2020s, the financial gain of a single household at the top 1% threshold was 987 times larger than the gain of a household in the bottom 20%.
Jeremy Grantham: In a sense, the bottom 20% is tragic, but the guy in the middle — the 50th percentile — he is unhappy also. And when your average guy is unhappy because he's not doing very well, you know you have a problem.
Steven Bartlett: What is that problem — this inequality we're seeing across the Western world? What does history tell us happens next?
Jeremy Grantham: All bad. We had a similarly unequal society back in the so-called Gilded Age of the 1880s and '90s. We got lucky in an ugly way. We ran into World War I, which was catastrophically expensive, killed off a huge fraction of the officer class, and then we went into the Great Depression. Then we went into World War II. We came out as a very equal society by historical standards. Obviously in wartime you pull together, and the social contract — the feeling that you owe something to the rest of society — was much stronger than it is today.
Steven Bartlett: I was doing some research and it said that when wealth inequality peaks to the extremes that we currently see in the US and the UK, history shows that the system inevitably resets. According to historical macro studies, peaceful policy changes almost never fix extreme inequality. Historically, a wealth peak is broken by one of three violent or catastrophic triggers: number one, total civil collapse and state failure; number two, mass mobilisation warfare; or number three, total revolution.
Jeremy Grantham: Yes, and that's why number two was lucky. In the end, it's better to have a war and have everyone pull their weight and work together than it is the other. Civil wars are the worst of all kinds.
Steven Bartlett: What do you think is likely to happen? It can't just keep becoming more and more unequal.
Jeremy Grantham: No, it can't. So it needs a government that is prepared to say, "Yeah, we're going to have to at least in a gentle and long-term way shift the tax structure in favour of a slightly steeper curve."
Steven Bartlett: So you mean taxation needs to go up.
Jeremy Grantham: Yes.
Steven Bartlett: We need to tax the rich and help the poor.
Jeremy Grantham: It's pretty simple. And you have a kind of steepness in every society — that's what they do. Every developed country in the world taxes the rich and helps the poor. It's a question of degree. We did much more helping the poor and taxing the rich in the 1950s, '60s, and '40s than we do today. And somewhere between that level and the current level might be more than enough if we just started to adopt the policy of 1935 to '75, where the bottom quarter get a half percent a year richer than the average, and the top dogs get half a percent less each year than the average. That sounds pretty unthreatening. I think we would ease our way over several decades into a better place.
If You Were 33 Today
Steven Bartlett: If you were 33 now, my age, and you were trying to accumulate wealth —
Jeremy Grantham: Oh god, I wish I was 33. It's such an exciting time.
Steven Bartlett: What would you give to be 33?
Jeremy Grantham: There's nothing I can give.
Steven Bartlett: If you were 33 now in this moment in time, and your objective was to become rich — I know that sounds like a one-dimensional objective, but if that was your objective — what strategy would you deploy? I'm going to take away your contacts, I'm going to take away everything you know, so you'd have to go on the journey of acquiring new information. What would you do?
Jeremy Grantham: I think the simple appeal would be to get your tail into AI and try to be a leader. Try to know more about everything in that area than the next guy. Join a leading firm and go for broke. You may end up encouraging the destruction of the human species, but you asked a simple question, and I give you what I think is the simple answer.
Steven Bartlett: And you want to make sure you're riding a wave that's coming into shore and you're on the forefront of that incoming wave. Like we saw with the tech bubble, like we're now seeing with the AI bubble. So it's really about acquiring the most valuable information.
Jeremy Grantham: Yes. And take lots of risk. Don't be conservative.
Steven Bartlett: And work hard.
Jeremy Grantham: And work hard. And think outside the box. I think the biggest deficiency most people have is that they feel constrained to play the game by the regular rules, and to believe that experts and authorities know what they're doing. And as you know, it just ain't so.
Crypto, Bonds, and Investment Strategy Revisited
Steven Bartlett: What if I'm trying to invest? Say I've got $1,000 or $10,000 and I want to invest it somewhere that's going to not lose me money through all of these cycles of boom and bust. What advice do you give for the average person that's looking to invest their salary or their wages?
Jeremy Grantham: Buy a broad-based index of non-US equities.
Steven Bartlett: Non-US? That's really surprising to me.
Jeremy Grantham: For like 60% of your money. And then 5 or 10% in precious metals, and if it's convenient and sensible, hold a bit of real estate. And the rest I'd put in bonds.
Steven Bartlett: Okay, so 5 or 10% in things like silver and gold? A preference for either silver or gold?
Jeremy Grantham: No preference.
Steven Bartlett: S&P 500? You said non-US.
Jeremy Grantham: Non-US.
Steven Bartlett: This is so interesting because everybody says invest in US stocks.
Jeremy Grantham: Of course they do. They've been completely dominant for 20 years, completely kicking ass around the rest of the world. And then in the last 12 months, emerging markets is up 65%. The S&P has done much better than I would have guessed, but it's only 25. That's a lot less than 65.
Steven Bartlett: And I guess the strategy is quite important here as well — you're saying to hold these for a long time, try not to buy and sell.
Jeremy Grantham: And try to look at where the cycle has been. I can tell you — and you can see it for yourself — there has been an enormous cycle in favour of the S&P, in favour of the American market over the rest of the world. And do you think America is going to keep on gaining on the rest of the world? Of course you're going to say yes now, because that's the flavour of this market. We think that what is good today will continue being good indefinitely, even though history tells you that is absolutely not the case. We live in a world that tends to rotate from one to the other. We believe in a world that extrapolates today's conditions. And you can easily prove that. The stock market is not efficient. The stock market extrapolates today's conditions. If they are terrible in 1982, they will take crushed earnings and multiply it by seven times earnings. And then in 2000, peak profit margins times 35 times earnings. They double count in the worst way. When times are good, you multiply it by a lot — that's another way of saying you extrapolate it into the distant future.
Steven Bartlett: You assume it's going to continue.
Jeremy Grantham: And Keynes, of course, my hero, says of course that extrapolation is the convention you adopt, even though you know from personal experience that the world is not that way.
Steven Bartlett: You didn't use the word crypto when you were talking about investment strategies. How much crypto do you own?
Jeremy Grantham: None.
Steven Bartlett: Have you ever owned any crypto?
Jeremy Grantham: No.
Steven Bartlett: Will you ever own any crypto?
Jeremy Grantham: No.
Steven Bartlett: Will you ever advise anyone to buy crypto?
Jeremy Grantham: No.
Steven Bartlett: Why?
Jeremy Grantham: I think it's an unnecessary piece of nonsense. It facilitates nothing except criminals moving money so they can't be seen. It's not a store of value since it bounces around all over the place — just down from 120 to 60 because it felt like it. So it's not stable. It's volatile as hell. It's not used conveniently as a medium of exchange. You can't go into a shop and use it easily. It does one thing very, very well — it's a means of speculating beautifully.
Steven Bartlett: Do you think Bitcoin's going to go to zero?
Jeremy Grantham: Well, in the distant future, yes, it will certainly go to zero. But it may take a long time. And in the distant future, everything goes to zero.
Steven Bartlett: What about property as an investment? Because the first reaction most people have when they have enough money to make an investment is they buy a property. People buy themselves a house, they move into it. We're kind of told that's how you start to accumulate wealth.
Jeremy Grantham: It's hard to imagine how it could be a good decision when there's such an increasing fraction of people who can't afford it. And there is political resistance.
Steven Bartlett: Doesn't that just mean that if I buy one now and increasingly people can't afford one, my house is going to be worth more in 10 years' time?
Jeremy Grantham: No — if people can't afford it, there's no one bidding. And by the way, the population is going to decline. Young family formations are already declining in many of the richer countries. And if you have family formations declining and you have super expensive houses, what do you think is going to happen? Now, you could say, "Well, perhaps there will be a mysterious increase in family formations." And that the chronic baby bust — which maybe we'll talk about soon — will stop.
The Fertility Crisis and Declining Sperm Counts
Steven Bartlett: Let's talk about the chronic baby bust. I've been hearing a lot in the news. I think there were some articles that came out this week in the New York Times about declining fertility rates and how young couples — like me, I'm engaged to a young woman and we're trying to have a child now — it's not always a straight line to having a child. You're kind of sold the idea that it is, that you just have sex without a condom and then a baby appears, but lots of young families and lots of my friends who are trying to have kids have gone for a couple of years trying and struggling to conceive. So much so that after doing this podcast, I started telling some of my friends that I actually think it's a good idea to start freezing your eggs, embryos, sperm. Because if it is going to get increasingly harder, then there might need to be medical interventions — IVF, etc. — for me and my friends if we want to have families. But the problem is also that at 33 years old, if you look at the data, you're not at your peak necessarily in terms of fertility. You're coming down the slope as a man. And also as a woman. And so you're kind of fighting time a little bit. I think my partner feels the same way — that we wish we were told a little bit earlier about family planning. And then I hear about these fertility issues that apparently have been caused by toxins and chemicals in our environment. You have spent a long time thinking, writing, and talking about this. I guess the first question is why? Why is a guy known for managing hundreds of billions of dollars talking about fertility and the baby bust?
Jeremy Grantham: Well, starting 27 years ago with the foundation, we were committed to start thinking about everything to do with the climate. And you're moving in the right circle then, because the next thing is we started to worry about the cataclysmic decline in insects. I don't know if you're aware of this, but insects appear to have dropped in biomass — the weight of the flying insects — by 50 to 75%.
Steven Bartlett: Really?
Jeremy Grantham: In the last 60, 70 years. And E.O. Wilson, the famous ant man, believed that nature could handle the loss of humans easily, effortlessly, but it could not handle the loss of insects. He felt that insects are the bedrock of nature. And if they start to go out of business, then the birds who feed on them and the amphibians start to decline — which they have done also catastrophically. One thing leads to another. The beetles are no longer recycling the forest floor. Eventually things won't grow. No one to fertilise the plants. The damage spreads. He felt that eventually the loss of insects would lead to a more or less complete failure of nature, and we would inherit a planet that was no longer conducive to humans.
We noticed that some of the same effects are felt by humans. A report came out — Shanna Swan and Hagai Levine — I think it finished in 2011, and it made the case that sperm count had been dropping, had almost halved since the first academic reports in 1970. So I immediately said this has the feeling of something that is really important. We got to study the data, and the results came out suggesting that the decline rate was accelerating. The decline rate this year is 2.5% a year. You don't have to be mathematically that literate to realise that a 2.5% decline in your sperm count every year is a disastrous, non-sustainable level.
Steven Bartlett: How long is that going to take for my sperm to basically not work?
Jeremy Grantham: As far as we can tell, our best guess is that in hunter-gatherer days we had 118 million units per millilitre of sperm. And when the academics came in in 1970, it was down to about 100. And today it's 35. Also, the quality and the motility had also declined somewhat similarly. It turns out, luckily for us, that we were over-engineered — like a great Victorian bridge. Nature doesn't take any risks and you have more than you need. And it appears — again, a good guess — that about 45 million units is what you need to be able to get pregnant without any difficulty. And that was hit about 15 to 20 years ago. The number of young couples who needed help 15 or 20 years ago was nil, basically, because none of them had a chronic lack of sperm count in round numbers. And now the World Health Organization says it's about 17%. 17% of young couples could use some help today. Which means that instead of trying for a week or two or three or four or five or six, you're trying for months and months. And everybody knows people now who fall in that category — which is exactly what you would expect if you've gone from zero to 17%.
But this is the killer. Shanna Swan and my colleague and I kind of thought about this thing separately and independently, and we worked out — it doesn't take a great brain — that in 20 to 25 years, the average young couple will need help. I mean, this is tomorrow. This is not 200 years from now. In 20 to 25 years, the average young couple will need help getting pregnant.
Steven Bartlett: Dr. Swan's projection indicates that if the current rate of decline continues unchecked, the median male sperm count is on track to hit zero by 2045.
Jeremy Grantham: Wow, yeah.
Steven Bartlett: That means the median couple is not going to have children without a lot of help.
Jeremy Grantham: It means half the male population will have zero viable sperm and the remaining half will be right on the edge of functional infertility.
A few of them will still have plenty — maybe 10% who are really in decent condition. Because there's a huge distribution range today. There are people today who still have 200 million — better than the hunter-gatherers. But it's —
Steven Bartlett: And what is causing this and how do we stop it?
Jeremy Grantham: Shanna would say the environment around you — mainly plastics. Plastics are leaching toxins, and the particles of plastics you have in your brain and in your body — which we now know is quite substantial — are also leaching toxins. And these toxins are what they call endocrine disruptors. They mess with your hormones. You should expect them to lower your fertility. And yet the people who specialise in fertility problems and write books about it — none of them mention toxicity. They mention the hundred perfectly solid reasons why people are choosing to have fewer children.
Steven Bartlett: Endocrine-disrupting chemicals like phthalates —
Jeremy Grantham: Like phthalates.
Steven Bartlett: Which are found in cosmetics, shampoos, food packaging, etc. They actively lower testosterone production in male fetuses during the first trimester, permanently stunting reproductive capacity before birth. BPAs — used to make plastics hard, line tin cans, and coat thermal store receipts — they are synthetic estrogens. They flood the male body with female hormones and signals, crashing sperm count and motility. PFAs — forever chemicals used in nonstick pans, Teflon, waterproof rain jackets, and stain-resisting carpets — they break down in nature, accumulate in human blood, and are directly linked to lower sperm volume. And then the microplastics you talked about — the Trojan horse. One of the shocking things I read was that they've been discovered physically embedded in human placentas.
Jeremy Grantham: Yes. Isn't that amazing?
Steven Bartlett: Breast milk and human testicles. And there was a major study in 2024 that found microplastics in 100% of human testicular tissues tested. 100%. And lastly, biological stresses — me and you being sat down on these chairs heats our testicles to a point where the sperm die. Heated car seats, hot laptops, they actively cook the sperm. And lastly, obesity.
Jeremy Grantham: Yes. And of course, smoking — which somehow slipped through the net. But there is a whole other branch: pesticides on your food. Now, if you give me time, I'll tell you about these two little studies. They're very small, and you might ignore them, except they were done by Harvard and Mass General, which is a candidate for the best hospital in America. They had a clinic for people having problems getting pregnant. They had 180 men, and they got them to self-report on what they were eating. Were they eating the dirty dozen? Were they eating melons and bananas that have lots of protection? At the end of six months, the guys who reported eating the least bad versus the quarter that ate the worst — there was a doubling of sperm count. Can you believe it? At the top category, the more fruit and vegetables you ate, the better your sperm count. In the bottom quartile, the more they ate the dirty dozen, the worse their sperm count. It was a dramatic result — two to one between the top and the bottom.
And then two years later, they did a very similar study with women who were having trouble. At the end of their nine months of self-reporting, the ones who ate the least badly had 68% successful live births — bearing in mind this was a fertility clinic — and the bottom quartile had 38%. So once again, nearly double. And it's life and death. These are really important. And this was only based on what they ate. Because pesticides are full of these toxins, and they are delivered straight into your body. You eat the damn things. It's not just that they're on the surface — you can wash some of that away, but they're impregnated into the structure of the berry. Berries, apples, pears, peaches, and finally spinach are really bad and are the top end. The bananas, oranges, and melons are fine. So if you eat these things that are designed to kill our cousins — the insects, the weeds, the funguses — why would you expect them not to do a terrible job on humans? And we stuff them in our system. And the fetus, it turns out, is 100 to 1,000 times more vulnerable than we are out in the world. For example, if your mother smokes, it's going to do about the same damage as if you smoked for the rest of your life.
And you think about what the fetus is plugged into the system, and how it's forming everything. It doesn't seem the most unreasonable thing that it would be much more sensitive. And there are people out there fussing quite reasonably about the first 1,000 days of life. But actually, that is nothing like as important as the 270 days in the womb.
Steven Bartlett: Atrazine. Have you heard of atrazine?
Jeremy Grantham: I have.
Steven Bartlett: Atrazine — referred to as the chemical castrator. It is the second most widely used herbicide in the United States, sprayed heavily on things like corn and sugar cane. And there was this peer-reviewed study out of UC Berkeley that showed exposure to atrazine at levels below the EPA's considered-safe drinking water levels completely chemically castrated male frogs, turning 10% of them into fully functional females capable of laying eggs. In humans, it is linked to severe drops in sperm motility and testosterone.
Jeremy Grantham: And yet we avoid the topic. We avoid the topic because it's pessimistic. We're not fighting the data.
Steven Bartlett: We just don't want to talk about it.
Jeremy Grantham: We don't want to talk about bear markets. We don't want to talk about bad climate change, even though it's bludgeoning us. This year could be the worst hot year in history. We are set up because of the El Niño to have perhaps the worst droughts and the hottest weather ever recorded, starting about now. So brace yourselves. But we don't want to talk about that. We don't want to talk about toxicity. We don't want to talk about running out of resources. We just don't do bad news. And I have never seen anything like this fertility thing, where the data is horrific. The baby bust is measurable. The sperm count is one of the few things you can really measure. Do they really think if you have declining sperm count, the future is great? Do they really think that the economy will function if the number of 20-year-olds entering the market starts to drop like a stone? In Japan, the 20-year-old cohort is 50% of what it was in 1948.
Steven Bartlett: What is 50%?
Jeremy Grantham: 50% — not down 15 or 3.5. 50% less.
Steven Bartlett: 50% less 20-year-olds?
Jeremy Grantham: 20-year-olds that drive the market, that offer themselves for military service.
What to Do About It
Steven Bartlett: What do we do about this?
Jeremy Grantham: We have two things. We've got to detoxify the world, which is intellectually easy — you ban poisonous chemicals. And we've made in the EU a pretty good start. My favourite example, and everybody's favourite example, is cosmetics. There are 10,000 chemicals in cosmetics. The EU has banned 1,500. If they ban the right 1,500, that could be three-quarters of the battle. Canada's banned 550. And the US has banned 12. I am not kidding you. The thing about toxicity is it is regional. If one country — Denmark, the EU, the UK — wants to look after its chemicals, they will live longer and have better health. If the US wants to put the corporations first, they will have shorter lives. Do you know the life expectancy difference between the US and Sweden has gone from 2 years to 6 years in the last 70 years? I wrote in my quarterly letter that my estate would be willing to bet that in 50 years it'll be 8 or 10.
Steven Bartlett: I don't quite think people in the United States realise the difference in the products they consume here versus other parts of the world. My barber Damon flew over here to give me a haircut last week. He said, "Oh gosh, I don't feel good. I went and got some food here and I really just don't feel good. Every time I come over here I don't feel good." Me and my team used to fly over here before I moved here for a couple of weeks a year to film the show, and whenever we'd fly back, not only would I be much fatter, but we'd all feel a little bit more sluggish from eating the food here. And it almost felt quite clear that there's something in the food that our bodies just aren't used to in the UK. And when you look at the toxicity of the United States versus Europe, it's quite clear. The US currently permits the use of 85 agricultural pesticides that are completely banned in the EU, China, and Brazil. The US sprays over 300 million pounds per year of pesticides that are deemed too dangerous to be legally used in Europe, including atrazine. Which the EU banned over two decades ago. In cosmetics — what you put on your skin obviously goes into your bloodstream — the EU has banned or heavily restricted over 1,300 chemicals in cosmetics and personal care products due to toxicity and hormone disruption. The US and the FDA has banned 11. In terms of food, the US allows potassium bromate — a known carcinogen used to make fluffy dough bread — and BHA/BHT, which are preservatives linked to hormone disruption. Both are strictly banned from human consumption in the UK, EU, Canada, and China. The US also allows titanium dioxide, used to make candy bright white, and synthetic dyes like Red 40, which require strict warning labels or outright bans in Europe due to DNA damage and neurodevelopmental issues in kids. And a recent US Geological Survey found that at least 45% of all US tap water is contaminated with PFAs — those forever chemicals directly linked to crashing sperm counts and testicular cancer. The US has historically allowed PFAs levels in drinking water drastically higher than the EU considers safe.
Jeremy Grantham: Let us just say that the EU is forever giving exemptions and extensions and is far from perfect and has a lot of corporate pushback. It's just much less bad than the US.
Steven Bartlett: And the US has worse life expectancy.
Jeremy Grantham: It does. And it's the only rich country in the world where 15 years ago they had the same life expectancy as they have today.
Steven Bartlett: One actionable piece of advice for anyone listening that might find this all quite overwhelming — because lots of things around us, from receipts to the pans we use to rain jackets, contain these chemicals — there are apps out there where you can scan the chemicals in the foods that you're buying to check if they contain these endocrine-disrupting chemicals. I'm not affiliated with any of them, but there's one called Yuka — Y-U-K-A — that I know is very easy for everyday scanning of products. You can just scan the barcode and it'll give it a rating score out of 100. There's EWG's Healthy Living app, which is the scientific gold standard run by the Environmental Working Group, a major toxic chemical watchdog. You can scan barcodes or search for food, cleaning supplies, or cosmetics. There's Think Dirty as well, which is great for cosmetics, shampoos, and skincare — it exposes the toxic truth hiding in beauty products. And then there's ClearYa, which is best for online shopping. It's an app in your web browser, and instead of scanning barcodes in your house, while you're shopping online — if you add a shampoo or lotion to your Amazon or Target or Walmart basket, it automatically pops up with an alert telling you about the ingredients list. But I think that gives something a little bit actionable and arms you with at least a tool to navigate this crazy environment. And obviously AI is great at this as well — you can take pictures of things and ask it questions.
Jeremy Grantham: And what we really need is a kind of green Amazon where everything is guaranteed — food, bed, clothes, everything. And that would be very handy indeed. Someone you could trust that would absolutely guarantee the whole line of products that you would order. Not impossible, and I think done well, someone could make money at it.
Steven Bartlett: What advice would you give to your kids on a personal level if they're trying to stay healthy in a toxic world?
Jeremy Grantham: Simple advice — and I know you like this — is pregnant women are much more important than anybody else in this field. If you could persuade pregnant women A, to have no cosmetics — save a lot of money, no cosmetics for nine months — and then B, invest some of that money from your cosmetics in buying organic berries, if you have to have berries, apples, oranges, peaches — what they call the dirty dozen here. If you did that, I think as much as half of all the trouble disappears. And that's a huge fraction, and it's easily acquired. Addressing the 100 things around in your environment, you have to get to that. Typically, if you're lucky, you do one thing after another. You get the gas stove first, which is really noxious, and then you work your way through the black plastics, the Teflon frying pan. You work your way around it. Compared to that, no cosmetics, no bad food, or make it organic — that's a piece of cake. That is easy. It will save you a huge amount that you will never appreciate because you'll never know how much better your children are than they would have been.
But it's not only your children, by the way. For women, you're talking about in particular because of the eggs — every egg is all there in the womb. And then it goes on to your grandchildren, we thought. At least we could prove two generations. And a recent study suggests it might be many more generations than two. So you've got some of these chemicals impregnated in your system, and your children pay the price, and your grandchildren, and perhaps even quite a few generations after that.
Steven Bartlett: I also think it would be great if Western governments around the world made the costs of both childcare and fertility treatments significantly lower.
Jeremy Grantham: And they will, of course.
Steven Bartlett: I had a couple of conversations on this podcast with very successful women, including Ronda Rousey, who was in tears because she was on — I think it's her fifth or sixth round of IVF treatments — and she just found out just before she walked into the studio that it hadn't gone well. And watching her cry about it and get very emotional meant that that day I walked out of this room and called a lot of the people in my life that I know are in the region where fertility starts to decline, and really encouraged them to start thinking — if that's what they want in their lives — about family planning. Getting your eggs frozen or your embryos frozen. Me and my partner actually went and did it. We got our embryos frozen, which is both expensive — extremely expensive, especially here in the United States — and difficult.
Jeremy Grantham: And psychologically destructive. Brutal.
Steven Bartlett: Me every day for a couple of weeks injecting her with these chemicals, and the hormonal roller coaster that she had to deal with — but for us the alternative was worse, which was never being able to have children because it's difficult and there's all these toxins in our environment. And so I then became a little bit preachy within the people in my life that I love about family planning, because we all kind of thought we could think about it later. We're all kind of 35 and we thought, "Yeah, we'll think about that later." But it turns out not to be the case for many people.
Detoxifying Capitalism and the 2.1 Children Problem
Jeremy Grantham: If you'll allow me to go back — you asked an important question. What do we have to do? And I said we have to detoxify the system, and then we both got off into this frenzy of attacking chemicals, which we should anyway, but it's intellectually easy. Ban the suckers. Now, putting pressure on the corporations to back off so the governments can do it would be a good idea — not easy. Corporations have enormous power, unprecedented power in the US, but also very substantial power in the EU and the UK. But we have to get them to back off. We have to start banning these things, otherwise no children.
But secondly, and much more difficult, is we have to detoxify capitalism. We have to slowly but surely turn our capitalist societal norms into much more family-friendly, children-friendly. Over the next several generations, we have to end up with a society that realises that 2.1 healthy, well-educated children is a part of the commons.
Steven Bartlett: What do you mean by that — 2.1?
Jeremy Grantham: 2.1 is the number of children it takes for a rich society to have a steady population.
Steven Bartlett: Per couple?
Jeremy Grantham: Per couple. If you have less than 2.1 per couple, you fairly rapidly go out of business. If you have more than 2.1, you fairly rapidly end up with so many people you're standing on each other's shoulders. The commons are things like common land in the old days that anyone could put their sheep on. And what tended to happen is everyone put more sheep than it could stand, and pretty soon it had no grass on it — known as the tragedy of the commons. And we all need clean air, clean water, fertile soil, and 2.1 healthy, well-educated children. Without any of those, society fails. All of them have to be treated as group responsibility. So the whole society, the whole village has to be in a way like a kibbutz eventually. You have to put everything behind making it doable to have children, because the long list of economic and social reasons — as well as toxin reasons — why people can't have 2.1 children is getting so long and so dangerous. And nothing yet has worked. They've tried 200 different things around the world, several percentage points of GDP in one or two cases. And nothing yet has seen a permanent uptick in baby production.
Advice for Ordinary People — and Where to Live
Steven Bartlett: For the average person listening right now — Dave who drives a taxi, or Jenny who works as a receptionist, or Clive who is a nurse — what is the most important thing we haven't talked about that we should have talked about as it pertains to their life today?
Jeremy Grantham: I think they have to brace themselves for tougher times ahead than they would have expected. And they're beginning to get the point. Life for the last 10 or 20 years has been tougher than they perhaps expected as children, or than other people expected for them. Part of that is politics. Part of that is inequality. But the net effect is times are tougher. It is more difficult to buy a house or afford to rent. And jobs are getting scarcer. It's likely to get worse.
Steven Bartlett: What does brace yourself mean for them? Does it mean —
Jeremy Grantham: Plan your life as if times will not be easy. And do build up a little reserve of cash. Of course my advice to other people is — get yourself a useful job. Something that will in a larger sense pull your weight in society.
Steven Bartlett: Upskill, change skills, learn something —
Jeremy Grantham: Mechanical, fixing, repairing —
Steven Bartlett: Things that —
Jeremy Grantham: Engineering. Things that will need humans. And research, science in general.
Steven Bartlett: Make friends.
Jeremy Grantham: Make friends. Make sure you're living in a tight society if you can. Very difficult today, obviously.
Steven Bartlett: Would you be thinking about the country you live in at this moment in time?
Jeremy Grantham: Absolutely.
Steven Bartlett: Really? Is there any country you wouldn't live in?
Jeremy Grantham: I think I have to refuse to answer this on the grounds that it might tend to incriminate me.
Steven Bartlett: Oh, okay. So you're saying don't live in the United States?
Jeremy Grantham: Well, I have American children and grandchildren.
Steven Bartlett: Why not the United States?
Jeremy Grantham: It holds out too much chance that the social contract is dissolving. You know, the thing about Japan — and my joking rule 21 in investing is never extrapolate from the Japanese. They are extremely different in every way. But one of the ways they're different is they have this amazing social contract. The thing that really upsets the Japanese is if they're put in a position where they can't act in a socially responsible way.
Steven Bartlett: When you say social contract, what does that mean?
Jeremy Grantham: It means an agreement that I will behave in a way that helps my neighbours and the society — that I'm doing what people expect me to do. I'm not going to misbehave.
Steven Bartlett: And you think that's not the case here in the United States?
Jeremy Grantham: I think the case here is that people are doing what they think is best for them and their family, and screw everybody else really. When I arrived in America, corporations had this sense that they owed something to the community they operated in, the city they operated in. They'd build the stadium, they'd be part of the community. Now they're not. They're all cold-blooded, profit-maximising international enterprises.
Steven Bartlett: And why is that a bad place to live? You're saying you probably wouldn't recommend Dave or Jenny living in the United States. What happens? What's the downstream impact of that?
Jeremy Grantham: That your neighbours aren't as interested in you and your well-being.
Steven Bartlett: Fine. I won't talk to my neighbour.
Jeremy Grantham: And that's a lonely place to be. And when you're in trouble, you're in serious trouble. Because the safety net here is very ineffective. There's a measure that I think is probably the single most important measure of civilisation, and that is maternal mortality. How many people die in childbirth? In Nigeria, out of 100,000, it's 480, give or take. In America, in the Black population, it's 44. In the whole population, it's like 21 or 20. Curiously, in the American Asian population, it's 13. And then you go down the list — in Britain, it's five. In Germany, it's four. In Sweden, it's 2.1. In Norway, it's zero. There were no mothers who died last year. Or the year before. What better definition of civilisation than looking after the mothers giving birth? How is it possible that a country more or less the richest in the world — it's not just that they're the worst in the rich world, it's that they are 50% worse than the next worst. 50% more mothers die here than in the second worst country in the developed world. How is that possible? The answer is it happens. And it's because the inequality is so extreme in the medical system that if you don't have lots of money, you're quite likely to die in childbirth. Now, of course, the numbers are not huge — 20 out of 100,000 is not enormous — but it's a terrible contrast.
Steven Bartlett: It's a sign of something. It's a sign of something else as well.
Jeremy Grantham: It's a sign of the social contract.
Steven Bartlett: So where's a good place to live then, if not here?
Jeremy Grantham: Denmark, Japan. Even France, Germany. The UK has a little bit of the American disease, but not nearly as much.
Steven Bartlett: So if your kids came to you and said, "Dad, we're thinking of leaving the United States. Should I move?"
Jeremy Grantham: I would say that's a perfectly reasonable thing to consider. And where are you going and why and what's your —
Steven Bartlett: I'm thinking of going to Denmark, Dad.
Jeremy Grantham: Well, if they'll have you. In the things that really matter — life expectancy, health, safety nets, murder rates, mortality rates, and everything that really matters — yes, they're day and night better. In the things that don't really matter but look really splashy, we have enormous quantities of wealth created that go to a relatively small fraction of the people. And that dazzles in terms of the average because that's how the numbers work. If you look at how well-off the bottom quartile are, America doesn't score well at all.
Closing Questions and Jeremy's Book
Steven Bartlett: Jeremy, we have a closing tradition where the last guest leaves a question for the next guest, not knowing who they're leaving it for. The question left for you is: if you could not fail, what would your next goal be that you would set for yourself?
Jeremy Grantham: There was a book written in the 1960s called Silent Spring. Rachel Carson, I think her name was. And it changed — for quite a number of years it did what books never do really — it became a political monster, and everyone studied it, and it had an effect. It changed the game. I would like to write something about toxicity and the social contract really. Particularly nurturing a family. We've got to find in the end a community that encourages children. The downside of the brutally efficient capitalist system that we have — its focus on financial achievement and very little emphasis on community and child-rearing. If we don't, we fail as a society pretty quickly. We have to detoxify. We have to create an environment where people want to have children. If I could write a book that would pull a Silent Spring, I would sit down tomorrow and start it.
Steven Bartlett: The Making of a Perma-Bear.
Jeremy Grantham: Perma should be in inverted commas, really.
Steven Bartlett: The Perils of Long-Term Investing in a Short-Term World, by Jeremy Grantham and Edward Chancellor. Who is this book for?
Jeremy Grantham: People who have an interest in the stock market. It has a little bit of climate change and toxicity. My co-writer is a professional and he tried to limit me quite sensibly, feeling that our main market was investors who would be turned off by too much of the stuff we've been talking about.
Steven Bartlett: You cover things also like economics, value investing, being a bear, and predicting a bubble, and what to do about all of those things. But it's really a useful frame of thinking that will help you be more realistic, especially when psychology is prone to take over and make you wildly, recklessly optimistic.
Jeremy Grantham: And be more confident in your judgment. Big companies cannot advise you — it's just suicidal for their business. So you are on your own. Look at the data. A bubble is not hard to see. There is this kind of plane and then there's a Himalayan peak which eventually goes back.
Steven Bartlett: And that's exactly what we're seeing.
Jeremy Grantham: That's exactly what history looks like. Have the courage to look at that, make your own conclusion, get out of the most dangerous part, and do it now. Don't wait for help because no help is coming. Large enterprises almost never get the big turning points because they can't take the career risk involved. And every big corporation needs a leader who has political skills. And the central political skill in life turns out to be: never be wrong on your own. This is again Keynes. You know, you can be wrong in company — you can jump off the cliff together — you will never lose your job because of that. But if you do anything on your own, sooner or later you will get it wrong, and you will not receive much mercy.
Steven Bartlett: Jeremy, thank you so much. Thank you for all that you do. You traverse so many subjects. It's absolutely fascinating and you've made me think about so many things. I've actually written down a bunch of ideas — those are things I want to remember for businesses, friends, family, etc. And I think that's the testament to how broad and curious and wise you are.
Jeremy Grantham: Going back to question one or two, the billionaire bit — sometime around the end of this year we will actually have written checks for a billion dollars to the climate change world.
Steven Bartlett: It's a wonderful thing. And at this particular moment in time, because of the politics, climate change is a subject that's falling off the radar. It's being mentioned less in earnings calls.
Jeremy Grantham: But this year will be so disgustingly hot from now on, I suspect.
Steven Bartlett: Disgustingly hot.
Jeremy Grantham: We could have from now on the hottest 12 months — from now to this time next year — that we have ever had in history. Here, there, and everywhere.
Steven Bartlett: Well, I'm glad we've got voices like yours lending their ideas and wisdom to these conversations. It's been an honour and a privilege. Your book, The Perils of Long-Term Investing in a Short-Term World — I'll link it below for everyone to buy it themselves. Jeremy, thank you.