Tags: gold | water | investment

Looking for a Golden Investment Opportunity? Try Water

Monday, 09 Apr 2012 08:56 AM

By Denis Kleinfeld

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T. Boone Pickens who made a fortune in oil and gas also owns water.

In fact, a lot of water.

While others thought only of oil and gas, he acquired the Ogallala Aquifer located in the Texas Panhandle. It is the third largest aquifer in the world.

This source alone supplies some 27 percent of all the water used in irrigation in the United States.

Three of the largest U.S. grains-producing states rely on this aquifer for water.

Presently, the water used in agriculture is some 70 percent of the amount required for the entire country daily (all of which is subsidized by the government).

Gold, which gets the headlines in the news, chapters in books on economics, endlessly argued about by our highly paid self-anointed investment gurus, doesn’t grow anything.

Water is fundamental to life. Gold isn't.

While the earth is 71 percent water, only 1 percent of it is effectively accessible fresh water

What is the potential for water over gold as a store of value as well as profit?

Consider that many people buy a bottle of water rather than use water from their home water faucet or from a public drinking fountain, which is free. Basically, they’re already paying twice as much for water as they do for gasoline.

Gold — like every other form of commodity or financial product — is an alternative investment opportunity. Water is the only commodity which is mandatory.

Water sources and rights, desalination, distribution, rebuilding infrastructure, servicing water related equipment and installations, technology to save water, are the growth industries right now and in the future.

Existing natural fresh-water supplies are limited since whatever exists wherever it exists in this world is all there is ever going to be.

Desalination, which creates fresh water from salt water, is, obviously, going to be needed to keep masses of people, and livestock, from dying of thirst.

Spending on desalination plants is currently planned to double in the next four years alone. And that only represent something less than 1 percent of the world’s needs.

China is an example of how urgent the need for fresh water has become.

It is facing catastrophic water problems between China’s population growth, industrial growth, pollution, and as the desertification of China continues unimpeded.

One report says that 75 percent of China’s drinking water is unsuitable for both drinking and cooking, and 80 percent of China’s seven major river systems are so degraded that they no longer support fish. China's days as an economic competitor to the United States are numbered unless it can solve its water problem.

Some 80 countries around the world also have serious water shortage problems now, even the United States.

In the United States alone, the amount that needs to be spent on water creation and infrastructure is staggering. While China has set aside some $200 billion for water infrastructure over the next 10 years, the United States has merely $8.4 billion focused on this.

Much, if not most, of the U.S. water delivery infrastructure predates World War II. The water distribution systems in New York City and Boston are still using some of the original wooden pipes that were put in some 200 years ago. Los Angeles, Chicago, Washington, D.C., are using water pipes that go back 80 to 100 years.

Cities throughout the country are running out of fresh water sources and are looking to invest in fresh water creation facilities.

The largest desalination plant in the world is in Tampa. Las Vegas and San Diego are talking about building their own plant. Investment in water and related industries and technologies by local government and private sources aren't waiting for Washington, D.C., politics to suddenly recognize this crisis.

The need is now and people here in the United States and everywhere else will spend whatever they have of value to get it.

They have no choice.

All this represents investment opportunities. Growing demand in the United States and world-wide for an irreplaceable commodity without which life wouldn't last a week.

© 2014 Moneynews. All rights reserved.

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