And Now the Banksters Want Our Drinking Water

Seriously, these guys are a bigger threat to our way of life than Osama bin Laden ever was.

Yes, if they just turn Wall Street's full potential on the supply of water, everything will be great, because ……… magic sparkle pony fairy dust:

The problem of water scarcity is growing at an alarming rate. By 2050, experts forecast a 55% increase in the amount of water required to meet demand from rising populations, food production and industry. Failure to meet that demand will have devastating consequences: water shortages will become chronic, leading to the proliferation of water riots and water wars. According to UN estimates, $1.8 trillion in new investments will be needed over the next 20 years to avoid such a calamity. The question is:

Whence Will That Money Come?

According to the wise masters of big capital and finance, there can only be one source: the ever-knowing, ever-perfect financial markets. Writing in the Daily Telegraph, Andrew Critchlow argued the case for financializing water:

Markets can play an important role in providing future water security (DQ: Note the use of the term “water security,” not “water independence” or “water sustainability”). The City can help to fund vital water infrastructure and the creation of a futures market to trade water would help to create a baseline pricing mechanism against which regional water tariffs could be fairly set

“Water will become something that is traded, there will be a market for it and this could happen in the next decade,” said Usha Rao-Monari, chief executive officer of Global Water Development Partners – an affiliate of New York-based investment giant Blackstone, the world’s largest private equity firm with a reported $280bn under management

The reasoning is clear: in order to create more efficient distribution of the world’s most vital resource, we need to create myriad new layers of middlemen and financiers and have them trading billions (if not trillions) of dollars in derivatives of that scarce resource on global commodity exchanges. It will be the Enron-ization of water, as the exact same people who almost destroyed the global economy with mortgage-backed securities and credit default swaps and who have corrupted the basic pricing mechanism of just about every commodity market on the planet will be entrusted to determine the price of the water we consume.

“It’s intuitively appealing to talk about water as a traded asset,” said Deane Dray, a Citigroup analyst who heads up global water-sector research. “If you look at projections over the next 25 years, you’ll see that global water supply and demand imbalances are on track to get worse.”

What will this mean for the rest of us?

Well it ain't anything good:

As a result of this huge influx of Wall Street money, the food commodity markets are now 80% speculation, with the volume of financial transactions between 20 and 30 times as large as the real transactions. As Kaufman told Wired magazine, the direct consequence has been volatility two standard deviations above the 1990’s norm:

We’ve seen the price of food become more expensive than ever three times in five years [DQ: sparking food riots and revolutions throughout the developing world]. Normally we’d see three price spikes in a century. And part of the reason is this new kind of commodity speculation in food markets.

If you aren't worried about what Wall Street will do if it gets control of safe supplies of drinking water, you are either catatonic, deluded, or a follower of Ayn Rand. (But I repeat myself.)

Remember, the most recent WTO talks broke down because the US, and Wall Street, wanted to shut down poorer nations' ability to stockpile staple foods to avoid being held hostage by speculators.

Be very, very afraid.