Yesterday I asked you to identify the next economic bubble or artificial shortage that is likely to form. You did better than I expected. The winning suggestion: WATER.
In order to have a good artificial shortage you need several things to be true:
- The commodity must be essential.
- There is a plausible “natural” explanation for the shortage.
- Only large companies have the resources to increase supply.
- The government is involved in some way.
- The media hasn’t yet obsessed about it, but could.
- Inventions to solve the problem are noticeably absent.
- There are futures contracts for it.
Water has it all, except for the existence of futures contracts, as far as I can tell. Once you see a market for water futures forming, bend over. That’s when the manipulation will begin. Crooks prefer manipulating financial markets over building reservoirs.
The plausible explanation for the worldwide shortage is that the population is growing faster than the supply of clean water. Add global warming to the mix and you have plausible explanations for worldwide droughts. That’s the cover story. It’s true enough to mask the artificial shortages that will be caused by the speculators and hedge funds.
So how can you invest and make money in water now, before the bubble tops?