Trading water

Beaver are only one species that relies on water for life.Some people claim the stock market is an indicator of the health of our economy. In truth, as indicated by the newsworthy reactions of the Big Investors to being outfoxed last week by what they call “Dumb Money,” it is a way for (mostly already) wealthy folks to shuffle money around giving the appearance of making more of it.

The stock market goes up when investors start buying – the way prices at the gas pumps went up when we started driving again and buying gas, making up for the price drop a year ago when we stopped driving and buying and there was a glut in supply and clean clouds in the sky.

It’s a rich folks’ game, and some of the richest folks went crying to the feds to open investigations when the not-rich folks figured out how to win – without cheating.

I tell that story to tell this one: last fall, water was made a tradeable commodity on the Chicago Mercantile Exchange. Investors may now trade in water the way they have for years traded in other commodities such as corn, soybeans and oil. If California is in a drought and on fire and almonds and grapes are badly in need of thirst quenching, water becomes more valuable, and those holding stock in those commodities plan to profit.

Profitization of public water supplies has been coming on for several decades, with little fanfare and aided by a burgeoning population and developers building new homes where water is scarce, leaving it to the new residents to figure out how to obtain water, and how to pay for it.

I lived in Norfolk, Va. in about 1970 when people moving into a new residential development discovered they had no water. A pipeline was run from a nearby reservoir. An ensuing court decision decreed that everyone between the reservoir and the development, residents and businesses which had previously relied upon private wells, would connect to and pay a monthly fee for the line they previously had not needed.

Fast forward to Pennsylvania American Water, which claims to be part of the nation’s “largest and most geographically diverse U.S. publicly traded water and wastewater utility company.” The parent company, American Water, changes its name according to the state in which it operates, calling itself Pennsylvania American Water, West Virginia American Water, Ohio American Water, California American Water, etc. as it quietly buys up small private and municipal facilities.

In 2013, the company bought Franklin Township’s new sewer treatment plant. Several months later, the company bought Hamiltonban Township’s sewer treatment system.

Which points to the growing financial value of a commodity as its availability becomes more scarce and temperature and population increase.

Water is the most vital and most scarce – some estimates have said by 2035 nearly two-thirds of the world population could be facing water shortages. When a warming climate cuts off the rain in California, companies such as American Water will be trucking or piping water from where it is to where it ain’t.

We use water to grow our crops, wash our clothes and cool our electricity generating plants – numerous nuclear generating plants have been forced to cut output when river water used for cooling has been heated and reduced by our warming climate.

And now we can trade it on the stock exchange.

Water has been declared a tradable commodity because people in high places have calculated it will become even more scarce, and therefore more valuable when they sell it to the rest of us. We should wonder what they know that the rest of us have not yet noticed.

Thanks for sharing the ride. I hope you enjoyed the journey. Comments are welcome, and please share.

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