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Food and water scarcity: Call it an alarmist's investment theme for the future. As weather...
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Saturday, July 21, 2012, 10:30 AM ETFood and water scarcity: Call it an alarmist's investment theme for the future. As weather conditions induce a "supply shock" across much of the agricultural spectrum, commodity and natural resource investors insist that it reinforces the thesis that the world's resources are being stressed to the breaking point. “You can’t triple a population in a lifetime without consequences,” says Jeremy Grantham. Supply simply can't keep up with demand, and our hungry and thirsty world just keeps growing.
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The planet has the capacity to provide energy,food,and water for an almost unlimited population for many centuries into the future.
the problem is public policy. So the way to invest is to find the smartest people (read "best of breed") and let them manage your money by buying their stock. Whatever problems the world's politicians create will be best dealt with by the brainiacs.
And anyone who has taken college level calculus and studied log or amortization tables knows that he is likely correct, especially in the near term.
Per Monsanto: To keep up with population growth more food will have to be produced in the next 50 years as the past 10,000 years combined.
Today's farmer feeds about 129 people. In 1960 that number was 25.8 - most of that productivity increase is due to improvements in farming methodology and technology.
(http://bit.ly/OgfpVn)
And there are no conspiratorial "vested interests" blocking the adoption of the technologies you mention, hydroponics is used widely where it is cost effective, the others are simply not yet cost effective for most agricultural purposes.
Even if one believes Grantham's thesis, investing in food and water is foolish. The only sector with more official manipulation is financials. Today's slam dunk investment is tomorrow's victim of subsidies. That water project to quench parched throats and irrigate would-be farmland will become an entitlement to be confiscated by the government. The more you believe in this weak supply, strong demand thesis, the more likely it is that your business will be destroyed or confiscated by a government. People who are desperate for food and water care little for the property rights they promised you as an incentive to grow food for them.
If you want to invest in this area, invest in things people need to grow more food or make better use of water. They're traded on more global markets and it's harder for governments to confiscate them or subsidise them out of business. Lower-level things like farmland and water rights, historically the best and most fundamental investments available, are all but worthless in an era of fighter jets, missile submarines, and heavy armour. They're literally not worth the paper they're printed on, and while you could plausibly defend them 500 years ago, that's hopeless today.
Malthus predicted we'd run out of food some 200 years ago, these sort of doomsday predictions forget that humans have become quiet adept at adapting.
If you think food is scarce or expensive now then contemplate the acreage necessary to be placed under LED or climate controlled or the volume of water necessary for hydroponics to feed the word
Maybe someday, and we should keep exploring but Malthus and his progeny fail to account for technology and the preservation instincts of the strong.
We actually know that now, its just that politician's, greenies, and liberal socialist's don't have a chance unless they can produce irrational fear to supper their case.
Sadly, Grantham has some excellent market insights and a great track record of investing but this stuff makes him look like a raving kook and calls into question his whole judgment on a wide range of issues.
He is a religious zealot who is a firm believer in the cult of man-made global warming which explains his incessant ranting on this stupid issue - he thinks humans are a plague on the earth.
Anyway, ever hear of desalination?
We have literally endless amounts of water and strangely for someone who should know better, the "water cycle" means we don't "use" water anymore than we use air.
Grantham proves that man-made global warming has replaced religion as the opiate of the masses for the gaiists among us.
Well stated.
"Global warming" is living proof that man remains as unchanged at his core as when he believed the Earth was flat. That, too, was ingrained in religion, literally, and heretics who suggested otherwise were often sent to the stake.
A tidbit for the most hysterical of the hysterical types, Americans, the Great Lakes, alone, possess 21% of all the fresh water on Earth, not even addressing salt water, which is unlimited in practical terms. Of course, if we make plans to use any of that water, then, the screams will be that "selfish" Americans are depleting a disproportionate share of the Earth's "limited" resources.
Some people squander their entire lives by insisting on being pessimistic and angry, not to mention wrong, about almost everything.
This is the problem. The wacko's have got everyone believing that water goes away. There is no way to deplete any significant amounts of water. Now it can evaporate (but then it rains back to earth). It can be flushed down the toilet or drain (but then it gets cleaned up and put back into some river). It can be used to water my really good looking lawn (but then it seeps into the underground reservoir.)
You get the idea. Water does not go away. Does it migrate from some places on earth to others. Yes it does. The dry places are called deserts and humans should not live there unless they can live without much water. Do the dry places change. Yes they do. And like our ancestors, when they do, the humans should move also.
That's just common sense for mortals, but admittedly it's not common sense for god like liberal socialists.
Given that implicit in your assertion is that I have the right to water where ever I choose to live- perhaps we could divert the Mississippi to the Mojave- it's beautiful. But dry. So, clearly it's the government's responsibility to take the "initiative" and get me some agua (and food, and a house, not to mention a job, and some spending cash would be nice).
Applying your simplistic logic, perhaps, we should limit the use of oil only where we "find it." Or, any other resource, for that matter.
The problem is that the floodwaters are being diverted now.
For the last 100+ years, we have stopped storing fresh water in the underground reservoirs by straightening the flow of rivers to preventing flooding (and the associated refilling of reservoirs). How stupid is that?
Which I might add is a misguided policy directly resulting from following the fraudulent science of man-made global warming.
We get the worst of both worlds, insane policies, higher prices for food and fuel, and more death in the rest of the world because people starve from higher food and energy prices.
But hey you believers in this nonsense are the compassionate ones among us, aren't you?
You win Iowa, more money flows into your campaign as donors instantly become fair weathered fans to piggyback on the leader and get into their good graces.
Still can't believe there are people who think ethanol was ever legit. The corruption in american politics is staggering. Bush wasn't any better with his idiotic 'switchgrass'. And Obama isn't any better with his 'algae'.
These sick freaks are priests of the new secular left church's environmental inquisition against growth & free markets. And all of it to purchase votes through donors whether PACs or Sierra Club iterations aplenty.
None of these solutions are real.
The politics behind them are.
'Processing commitment' = taxpayer subsidies.
Nice try.
Solar and wind are also very real too, as long as they have your involuntary commitment propping them up.
The real crime here with corn ethanol however(yes, I did say 'crime') is how it led to jacking up the price of corn against all objections of India at the time. Hillary didn't care. Starving Indians did not matter one whit to her. Getting Iowa did.
The free market desperately needs to be tried. Perhaps sometime in my lifetime. We'll see.
Now if liberals could only make wheat ethanol we could get bread up to $10 a loaf and blame Bush for it.
disclaimer: long SZYM - I think it has a future, but it will be years before it competes as a fuel. SZYM has been smart about that, and is also exploiting near term markets like cosmetics as a market for its algae based oils.
It's like Goldman peak oil hype to unload their oil contracts on poor retail.
songbirds disappearing, butterflies, bees... in just 150 years 100's of millions of years of evolution squashed by the great builders of society
not one comment on the loss of wild lands wildlife habitat healthy soils for what? more obesity for the over 7 billion members of one species?
the cult of man knows no boundaries
And the cult of Gaea does?
Not for nothing,but, i'm real old and fighting the clock. I dont give a poop about stocks. Suckers game,but, I am buying as many farms in LA as I can get ! Thousands of hectors in the last 3 months and I hope to buy as many chunks as I can get. I want my foundation to exist for 100s of years ! With wet land i'll be assured !
Not for TAX avoidance as Foundation's are not taxed ! Costa Rica,Panama and Colombia have vast tracts of great wet land and a warm climate.. The buying is 100% in Panama & Colombia. My wife passed years back,but, she was a tica and her family left 1000s of hectors. I put it all in our Foundation ! pura vida, DL
Nobody has made a dime on it.
Do a 5 yr chart on VE. (as only one example.)
How'd that work out.