This American “drought” is much worse than you’ve heard from the mainstream media. And the opportunity to invest in a constructive way to improve our nation’s water situation is fleeting…
But first, yes – it’s one of the driest summers since the Great Depression. That’s true and undeniable. It’s just a matter of rainfall numbers. And though the Midwest recently received some much-needed rainfall, the real implications behind this “drought” have almost nothing to do with a season of low rainfall.
What you haven’t heard has everything to do with what’s beneath the ground, not what rain falls on our nation’s parched farmland.
I’m talking about underground aquifers. You might be rolling your eyes in boredom, because our reputation as the world’s breadbasket is thanks to fertile farmland.
But without a huge supply of reliable water, that farmland pretty quickly turns from Earth’s cornucopia to unusable desert prairie. Today, the world’s largest aquifer, the Ogallala, which sits under the entirety of the Midwest’s fertile strip, is being pumped dry.
The investment implications are obvious.
Investments in companies that can improve and stave off underground aquifer depletion will be some of the best long-term holdings you can own.
You might not agree. And I don’t blame you. When you have a commodity provided to your house at essentially no cost – when it comes out of a faucet at the flick of your wrist –it’s tough to imagine how you could profit from a shortage in that commodity.
But think about how cheap water is today. You likely pay less than half of a penny per gallon of water. Even if your water costs double or triple, you wouldn’t be likely to cut back on consumption.
But when the world’s largest underground water reserve begins to dry up, you can bet that water costs will rise, and a handful of water investments will prosper.
If you’re interested, I’ve worked with my boss Ian Wyatt to put together a brief write-up on this water story. You can read the whole thing for free.