If the idea of a global water crisis is hard for you to imagine then consider yourself lucky.
For hundreds of millions, water scarcity is already a reality. And I’m not just talking about developing nations. The global water crisis hits close to home too.
California is experiencing a record drought at the moment.
In a normal year California gets a third of its water from ground water, according to Jay Famiglietti of UC Irvine and NASA’s Jet Propulsion Laboratory. This year California is expected to pull an alarming 70% of its water from the ground. The problem? Ground water is replenished at a fraction of the rate at which we can extract it, making its use an unsustainable solution to surface water shortages.
The economic impact will be felt for months and even years but the pain begins now.
Farmers were forced to “idle” – or leave unplanted – more than 500,000 farmable acres in California’s Central Valley alone. The economic impact could reach $5 billion, putting at risk about 117,000 jobs related to farming, processing and distributing produce.
What’s more, California produces nearly half of the US-grown fruits, nuts and vegetables. So consumers all over the country can expect higher prices and less variety.
But California is just the beginning.
The United Nations predicts that roughly two-thirds of the world’s population will live in water stressed environments by 2025, with around 1.8 billion people living in absolute water scarcity. That’s only 11 years away.
Making this problem even worse, the most rapid population growth on the planet continues to occur in areas with the most serious water-related issues. Water shortages and the global water crisis aren’t just an issue for Californians and third world nations. Indeed, a true crisis is brewing.
The graphic below comes from a study conducted for the National Resources Defense Council. The study determined that 2,200 US counties will face water shortages by 2050, 400 of them in the most extreme condition of water shortage.
Source: National Resource Defense Council
Some of us might look at this and think, “Phew, my area is in the clear!” But this is an issue that will affect every American citizen and, frankly, every person on planet Earth.
What will we do when neighboring counties in full-blown water crisis come knocking on our doors asking for water? Or start taking us to court over water rights?
The legal battle between Georgia, Alabama and Florida has, at least for now, simmered down after a federal judge ruled in 2009 that Georgia’s Lake Lanier was not intended for supplying water to the Atlanta metro area.
The ruling forced Georgia to look towards conservation to solve its water shortages rather than drawing more and more water from Lake Lanier. But this kind of battle, one between upstream water-rich places like Georgia and downstream water-poor neighbors, will play out again and again around the world.
This global water crisis will take on a more important role in economic and agricultural policy as it continues to worsen. It will also likely trickle into military policy as water-poor nations and regions become increasingly desperate.
Surely this doesn’t mean the end of life or capitalism on Earth. But some regions will surely change drastically. As the global water crisis pertains to financial markets, come companies and industries will feel its effects much more than others. This week we’ll take a closer look at hidden risks that certain industries and specific stocks will face in the coming decades.
You can fill your gas tank for a dollar a gallon.
You’re probably already think I’m nuts. But take a moment to hear me out. Because it’s absolutely true. That’s right, a dollar a gallon. Even though gas prices in America have climbed higher and higher, now costing an average of $3.67 a gallon, I’ll show you how you can get where you’re going for just a fraction of the price. Because, there’s a special government program that allows every US Citizen… to pay a reduced price for gasoline… through exclusive Government rebates.