It Is Mathematically Impossible To Pay Off All Of Our Debt

Posted by George Freund on May 25, 2015

By Michael Snyder, on May 21st, 2015

Did you know that if you took every single penny away from everyone in the United States that it still would not be enough to pay off the national debt? Today, the debt of the federal government exceeds $145,000 per household, and it is getting worse with each passing year. Many believe that if we paid it off a little bit at a time that we could eventually pay it all off, but as you will see below that isn’t going to work either. It has been projected that “mandatory” federal spending on programs such as Social Security, Medicaid and Medicare plus interest on the national debt will exceed total federal revenue by the year 2025. That is before a single dollar is spent on the U.S. military, homeland security, paying federal workers or building any roads and bridges. So no, we aren’t going to be “paying down” our debt any time in the foreseeable future. And of course it isn’t just our 18 trillion dollar national debt that we need to be concerned about. Overall, Americans are a total of 58 trillion dollars in debt. 35 years ago, that number was sitting at just 4.3 trillion dollars. There is no way in the world that all of that debt can ever be repaid. The only thing that we can hope for now is for this debt bubble to last for as long as possible before it finally explodes.

It shocks many people to learn that our debt is far larger than the total amount of money in existence. So let’s take a few moments and go through some of the numbers.

When most people think of “money”, they think of coins, paper money and checking accounts. All of those are contained in one of the most basic measures of money known as M1. The following definition of M1 comes from Investopedia…

A measure of the money supply that includes all physical money, such as coins and currency, as well as demand deposits, checking accounts and Negotiable Order of Withdrawal (NOW) accounts. M1 measures the most liquid components of the money supply, as it contains cash and assets that can quickly be converted to currency.

As you can see from the chart below, M1 has really grown in recent years thanks to rampant quantitative easing by the Federal Reserve. At the moment it is sitting just shy of 3 trillion dollars…



So if you gathered up all coins, all paper currency and all money in everyone’s checking accounts, would that even make much of a dent in our debt?

Nope.

We’ll have to find more “money” to grab.

M2 is a broader definition of money than M1 is, because it includes more things. The following definition of M2 comes from Investopedia…

A measure of money supply that includes cash and checking deposits (M1) as well as near money. “Near money” in M2 includes savings deposits, money market mutual funds and other time deposits, which are less liquid and not as suitable as exchange mediums but can be quickly converted into cash or checking deposits.

As you can see from the chart below, M2 is sitting just short of 12 trillion dollars right now…

That is a lot more “money”, but it still wouldn’t pay off our national debt, much less our total debt of 58 trillion dollars.

So is there anything else that we could grab?

Well, the broadest definition of “money” that is commonly used is M3. The following definition of M3 comes from Investopedia…

A measure of money supply that includes M2 as well as large time deposits, institutional money market funds, short-term repurchase agreements and other larger liquid assets. The M3 measurement includes assets that are less liquid than other components of the money supply, and are more closely related to the finances of larger financial institutions and corporations than to those of businesses and individuals. These types of assets are referred to as “near, near money.”

The Federal Reserve no longer provides charts for M3, but according to John Williams of shadowstats.com, M3 is currently sitting somewhere in the neighborhood of 17 trillion dollars.

So even with the broadest possible definition of “money”, we simply cannot come up with enough to pay off the debt of the federal government, much less the rest of our debts.

That is not good news at all.

Alternatively, could we just start spending less than we bring in and start paying down the national debt a little bit at a time?

Perhaps that may have been true at one time, but now we are really up against a wall. Our rapidly aging population is going to put an enormous amount of stress on our national finances in the years ahead.

According to U.S. Representative Frank Wolf, interest on the national debt plus “mandatory” spending on programs such as Social Security, Medicare and Medicaid will surpass the total amount of federal revenue by the year 2025. That is before a single penny is spent on homeland security, national defense, paying federal workers, etc.

But even now things are a giant mess. We are told that “deficits are under control”, but that is a massive hoax that is based on accounting gimmicks. During fiscal year 2014, the U.S. national debt increased by more than a trillion dollars. That is not “under control” – that is a raging national crisis.



Many believe that that we could improve the situation by raising taxes. And yes, a little bit more could probably be squeezed out of us, but the impact on government finances would be negligible. Since the end of World War II, the amount of tax revenue taken in by the federal government has fluctuated in a range between 15 and 20 percent of GDP no matter what tax rates have been. I believe that it is possible to get up into the low twenties, but that would also be very damaging to our economy and the American public would probably throw a huge temper tantrum.

The real problem, of course, is our out of control spending.

During the past two decades, spending by the federal government has grown 63 percent more rapidly than inflation, and “mandatory” spending on programs such as Social Security, Medicare and Medicaid has actually doubled after you adjust for inflation.

We simply cannot afford to keep spending money like this.

And then there is the matter of interest on the national debt. For the moment, the rest of the world is lending us gigantic mountains of money at ridiculously low interest rates. However, if the average rate of interest on U.S. government debt was just to return to the long-term average, we would be spending more than a trillion dollars a year just in interest on the national debt.

So the best possible environment for “paying down our debt” that we are ever going to see is happening right now. The only place that interest rates on U.S. government debt have to go is up, and our population is going to just keep getting older and more dependent on government programs.

Meanwhile, our overall debt continues to spiral out of control as well. According to CNBC, the total amount of debt that Americans owe has reached a staggering 58.7 trillion dollars…

As the nation entered the 1980s, there was comparatively little debt—just about $4.3 trillion. That was only about 1.5 times the size of gross GDP. Then a funny thing happened.

The gap began to widen during the decade, and then became basically parabolic through the ’90s and into the early part of the 21st century.

Though debt took a brief decline in 2009 as the country limped its way out of the financial crisis, it has climbed again and is now, at $58.7 trillion, 3.3 times the size of GDP and about 13 times what it was in 1980, according to data from the Federal Reserve’s St. Louis branch. (The total debt measure is not to be confused with the $18.2 trillion national debt, which is 102 percent of GDP and is a subset of the total figure.)

As I discussed above, there isn’t enough money in our entire system to even pay off a significant chunk of that debt.

So what happens when the total amount of debt in a society vastly exceeds the total amount of money?

Is there any way out other than collapse?

http://theeconomiccollapseblog.com/archives/it-is-mathematically-impossible-to-pay-off-all-of-our-debt



In Judaism and Christianity, the concept of the Jubilee is a special year of remission of sins and universal pardon. In the Biblical Book of Leviticus, a Jubilee year is mentioned to occur every fiftieth year, in which slaves and prisoners would be freed, debts would be forgiven and the mercies of God would be particularly manifest.

In the Holy Bible, Leviticus 25:8-13 states,

And thou shalt number seven sabbaths of years unto thee, seven times seven years; and the space of the seven sabbaths of years shall be unto thee forty and nine years. Then shalt thou cause the trumpet of the jubile to sound on the tenth day of the seventh month, in the day of atonement shall ye make the trumpet sound throughout all your land. And ye shall hallow the fiftieth year, and proclaim liberty throughout all the land unto all the inhabitants thereof: it shall be a jubile unto you; and ye shall return every man unto his possession, and ye shall return every man unto his family. A jubile shall that fiftieth year be unto you: ye shall not sow, neither reap that which groweth of itself in it, nor gather the grapes in it of thy vine undressed. For it is the jubile; it shall be holy unto you: ye shall eat the increase thereof out of the field. In the year of this jubile ye shall return every man unto his possession.

Good thing bankers don't understand that. It could interfere with the financial collapse and total war scenario.

Washington Blows Itself Up With Its Own Bomb. US Strategy Backfires

By F. William Engdahl

Global Research, May 26, 2015

New Eastern Outlook

Region: USA

Theme: Global Economy, Oil and Energy, US NATO War Agenda

These are sad days in Washington and Wall Street. The once unchallenged sole Superpower at the collapse of the Soviet Union some quarter century ago is losing its global influence so rapidly that most would not have predicted anything comparable six months ago. The key actor who has catalyzed a global defiance of Washington as Sole Superpower is Vladimir Putin, Russia’s President. This is the real background to the surprise visit of US Secretary of State John Kerry to Sochi to meet with Russian Foreign Minister Sergei Lavrov and then a four hour talk with “Satan” himself, Putin.
Far from a “reset” try, Washington’s hapless geopolitical strategists are desperately trying to find a better way to bring the Russian Bear to her knees.
A flash back to December 2014 is instructive to understand why the US Secretary of State holds out an apparent olive branch to Russia’s Putin at this juncture. At that point, Washington appeared about to pin Russia to the ground, with its precision targeted financial sanctions and its deal with Saudi Arabia to collapse oil prices. In mid-December the Ruble was in free fall against the dollar. Oil prices were similarly plummeting down to $45 a barrel from $107 only six months earlier. As Russia is strongly dependent on oil and gas export revenues for its state finances, and Russian companies held huge dollar debt obligations abroad, the situation was bleak as seen from inside the Kremlin.
Here fate, as it were, intervened in an unexpected way (at least by the USA architects of the financial warfare and oil collapse strategy). Not only was John Kerry’s September 2014 deal with ailing Saudi King Abdullah delivering heavy pain in the Russian finances. It was also threatening an explosion of an estimated $500 billion in high-risk-high-yield “junk” bonds, debt that the US shale oil industry had taken on from Wall Street banks in the past five years to finance the much-touted US shale oil revolution that briefly propelled the USA ahead of Saudi Arabia as the world’s largest oil producer.
US strategy backfires
What Kerry missed in his clever Saudi horse trading was the sly double agenda of the Saudi royals. They had earlier made clear they did not at all want their role as world premier oil producer and market king to be undercut by an upstart US shale oil industry. They were happy to give Russia and also Iran pain. But their central aim was to kill the US shale oil rivals. Their shale projects were calculated when oil was $100 a barrel, less than a year ago. Their minimum price of oil to avoid bankruptcy in most cases was $65 a barrel to $80 a barrel. Shale oil extraction is unconventional and more costly than conventional oil. Douglas-Westwood, an energy advisory firm, estimates that nearly half of the US oil projects under development need oil prices greater than $120 per barrel in order to achieve positive cash flow.
By end of December a chain-reaction series of shale oil bankruptcies threatened to detonate a new financial tsunami at a time the carnage from the 2007-2008 securitization financial crisis was anything but resolved. Even a few high-profile shale oil junk bond defaults would have triggered a domino-style panic in the US $1.9 trillion junk bond debt market, no doubt setting off a new financial meltdown that the over-stressed US Government and Federal Reserve could scarcely handle. It could have threatened the end of the US dollar as global reserve currency.
Suddenly in the first days of January, IMF head Lagarde was praising Russia’s central bank for its “successful” handling of the ruble crisis. The US Treasury Office of Financial Terrorism quietly eased off on further attacks on Russia while the Obama Administration pretended it was “World War III as usual” against Putin. The US oil strategy had inflicted far more damage on the US than on Russia.
USA Russia policy failure
Not only that. Washington’s brilliant total war strategy against Russia initiated with the November 2013 Kiev EuroMaidan coup d’etat has become a manifest, utter failure that is creating the worst imaginable geopolitical nightmare for Washington.
Far from reacting as a helpless victim and cowering in fear before the US efforts to isolate Russia, Putin initiated a brilliant series of foreign economic, military and political initiatives that by April added up to the seed crystal of a new global monetary order and a new Eurasian economic colossus to rival US sole superpower hegemony. He challenged the very foundations of the US-dominated dollar system and her global world order everywhere from India to Brazil to Cuba to Greece to Turkey. Russia and China signed mammoth new energy deals that allowed Russia to redirect its energy strategy from the west where the EU and Ukraine, both under strong Washington pressure, had sabotaged Russian EU gas deliveries via Ukraine. The EU, again under intense Washington pressure threw one monkey wrench after another into Gazprom’s South Stream natural gas pipeline project to southern Europe.
Rather than be defensive, Putin shocked the EU during his visit to Turkey and meeting with President Erdogan when he announced on December 1 that he had cancelled Gazprom’s South Stream project. He announced he would seek an agreement with Turkey to deliver Russian gas to the Greek border. From there, if the EU wants the gas they have to finance their own pipelines. The EU bluff was called. Their future gas needs were more remote than ever.
The EU sanctions on Russia also backfired as Russia retaliated with a ban on EU food imports and a turn to Russian self-sufficiency. And billions of dollars of contracts or exports from German firms like Siemens or France’s Total were suddenly in limbo. Boeing saw large aircraft orders to Russian carriers cancelled. Russia announced it was turning to national suppliers in production of critical defense components.
Then Russia became an “Asian” charter member of China’s remarkably successful new Asian Infrastructure Investment Bank (AIIB) designed to finance its ambitious New Silk Road Economic Belt high-speed rail network across Eurasia into the EU. Rather than isolate Russia, US policy backfired badly as, despite strong pressures, US staunch allies including Britain, Germany, France and South Korea all rushed to join the new AIIB.
Further, at their May meeting in Moscow, China’s President Xi Jinping and Vladimir Putin announced that the China silk road rail infrastructure would be fully integrated with Russia’s Eurasian Economic Union, a staggering boost not only to Russia bit to Eurasia into China, a region containing the majority of the world’s population.
In short, by the point John Kerry was told to swallow hard and fly to Sochi, hat in hand, to offer some kind of peace pipe to Putin, US leading circles, the American Oligarchs had realized their aggressive neo-conservative warhawks like Victoria “F**k the EU” Nuland of the State Department and Defense Secretary Ash Carter were propelling the creation of a new alternative world structure that could spell the ruin of the entire post-Bretton Woods Washington-dominated Dollar System. Oops.
In addition, by forcing her European “allies” to toe the US anti-Putin line, to the severe detriment of EU economic and political interests, alone her vigorous participation in the New Silk Road Economic Belt project and the economic boom in investment that will bring with it, Washington’s neo-conservatives have managed also to accelerate a probable parting of the ways between Germany, France and other Continental European powers to Washington.
Finally, as the whole world (including even Western anti-Atlantists) came to view Putin as the symbol of resistance to the American dominance. This perception first emerged at the time of the Snowden story but has solidified after the sanctions and blockade. Such perception, by the way, plays a significant psychological role in the geopolitical struggle – the presence of such a symbol opens up novel venues in the fight against the hegemony.
For all these reasons, Kerry was clearly sent to Sochi to sniff out possible soft points for a renewed assault in the future. He told the rogue US-backed lunatics in Kiev to cool it and respect the Minsk cease-fire accords. The demand came as a shock in Kiev. US-installed Prime Minister Arseniy Yatsenyuk told French TV, “Sochi is definitely not the best resort and not the best place to have a chat with Russian president and Russian foreign minister.”
At this juncture the only thing clear is that Washington has finally realized the stupidity of its provocations against Russia in Ukraine and globally. What their next scheme will entail is not yet clear. Clear is that a dramatic policy shift has been ordered on the Obama administration from the highest levels of US institutions. Nothing else could explain the dramatic shift. If sanity replaces the neo-con insanity remains to be seen. Clear is that Russia and China are resolute about never again leaving themselves at the mercy of an incalculable sole superpower. Kerry’s pathetic attempt at a second Russia “reset” in Sochi will bring Washington little at this point. The US Oligarchy, as Shakespeare’s Hamlet put it, is being “hoist with their own petard,” as the bomb maker blows himself up with his own bomb.

1,400 investigated in child sex abuse inquiry, including politicians

1,400 investigated in child sex abuse inquiry, including politicians     ~folks your c'ing just the tip of the "berg"

Officer leading Operation Hydrant inquiry says out of 1,433 alleged offenders 76 were politicians, 43 were from music industry and 135 were from TV, film or radio

Clockwise from top left: Fred Talbot, Gary Glitter, Jimmy Savile, Rolf Harris, Stuart Hall, Max Clifford Photograph: Various/PA/Getty/Wireimage/AFP/Reuters

Sandra Laville

Wednesday 20 May 2015 07.42 EDT Last modified on Wednesday 20 May 2015 19.35 EDThttp://www.theguardian.com/uk-news/2015/may/20/1400-suspects-operation-hydrant-politician-and-celebrity-child-sex-abuse-inquiry?CMP=share_btn_fb

Police across the country are investigating more than 1,400 men – including 261 high-profile individuals – over allegations of child abuse in the past, a senior officer running the national operation has revealed.
The scale of alleged child abuse across society – both recent and non-recent – was stark, said Ch Const Simon Bailey, who runs Operation Hydrant, the national coordinating team overseeing the various inquiries.
Figures from police forces in England and Wales published on Wednesday reveal that 1,433 men have been identified in reports of alleged abuse by victims, since the operation was set up in 2014.

Sandra Laville ‏@sandralaville

76 are politicians both local and national 43 from music industry 7 from sport 135 from tv film or radio #abuse

Of these 216 are dead, 76 are politicians, both national and local figures, 43 are from the music industry, 135 from TV, film or radio and seven from the world of sport. The cases include recent high-profile convictions, including Rolf Harris, Gary Glitter and Max Clifford.
Hundreds of institutions have been identified by victims of non-recent abuse as places where their abuse took place. These include 154 schools, 75 children’s homes, 40 religious institutions, 14 medical establishments, 11 community groups, nine prisons or young offender institutions, nine sports venues and 28 other places including military establishments.
Bailey warned that the number of victims could run into the hundreds of thousands, and called for much more support for survivors of child abuse. He said he believed that the enormous increase in reports of all types of child sexual abuse – which have risen by 71% since 2012 to 116,000 reports this year – was not just down to more victims coming forward.
Instead, Bailey warned that the internet was creating the opportunity for more abuse to take place, and said live-streaming of child abuse on mobile phones was the next challenge facing law enforcers.
Bailey said the number of reports of abuse, both by adults of historical abuse, and by children today, was increasing on a daily basis, and the figures released on Wednesday were just a snapshot of the challenge faced by the police and society as a whole.
He supported calls for much more funding for victims of child abuse. “The government has allocated millions of pounds to provide additional support, but I am not sure that is going to be enough. We are talking about hundreds of thousands of victims,” he said.
Of the 116,000 reports of child sexual abuse this year, 52,446 are allegations of sexual abuse in the past, some involving cases going back decades. This amounts to a 166% increase in reports of non-recent abuse, said Bailey.
Detectives on Operation Hydrant are coordinating the many investigations into non-recent abuse involving both high-profile individuals and institutions, from a hub in Sheffield.
A team from Operation Hydrant is liaising with Justice Goddard to support the independent inquiry into child sexual abuse.
Each of the 1,433 suspects has been put into a major crime database, which is cross referenced to ensure that no inquires are being duplicated and to identify suspects whose offending crossed borders. So far 30 individuals have been identified in one or more of the investigations.
Bailey said the figures were stark. “This year I am anticipating an estimated 116,000 reports of child sexual abuse will be received, that is a 71% increase since 2012, so it gives you some idea of the scale of this.
“What we are seeing is an absolutely unprecedented increase in the number of reports that are coming forward. That has brought about a step-change in the way the police service has had to deal with this. We are rising to and meeting the challenge, this is what Operation Hydrant is about.”
Bailey said the Hydrant team was working to create a database which would try to ensure that the failures of the past – as identified in the Jimmy Savile case – would not be repeated.
During the investigation of the late Radio 1 DJ it emerged that intelligence and information, including reports of abuse, were buried in the system – in some cases to prevent leaks – which meant when individual police forces with their own allegations checked the national police computer database his name did not come up.
“One of our primary objectives is to make sure where we get intelligence and where we get evidence of abuse it is being coordinated so we don’t make those mistakes. That particular case showed mistakes were made and he was able to go on and continue further abusing. The whole idea is that we don’t make those mistakes again,” he said.
Bailey said everyone from teachers, GPs, parents and wider society had a duty to look out for signs of abuse. He said: “We face a massive challenge in terms of resources, time and expertise to balance offering routes of justice for those who suffered in the past while safeguarding and protecting children in a vulnerable position today.”
Sheila Taylor, from the national working group on child sexual exploitation, said a massive public health campaign was needed to address the scale of child abuse within society.
John Brown from the NSPCC said the failure to support victims amount to a public health problem. “That is the issue. We are not helping children and adult victims to recover and there are huge costs to society, there are economic considerations and individual psychiatric costs.”
Tom Watson, the Labour MP whose claims made in the Commons that there was a paedophile network linked to parliament triggered a Scotland Yard investigation, said: “The sheer number of allegations just shows why there should be a dedicated national police response to child abuse inquiries. Intelligence gathering and data sharing will be far easier were there to be a dedicated team comprising of specialists from around the country.
“We are only just beginning to understand how as a country, over many generations, we managed to turn a blind eye to Britain’s child abuse scandal. The survivors deserve justice and future generations require greater protection.”
Gabrielle Shaw, chief executive of the National Association for People Abused in Childhood (Napac), said: “The scale and scope of sexual abuse of children committed in the past can often seem overwhelming. What these figures from the National Police Chiefs’ Council do is to provide some degree of measure of the issue.
“And what a measure it is; prolific offenders from all spheres of society, thinking they were untouchable, abusing children and the most vulnerable in settings where they should have been safest , including schools, care facilities and religious institutions.”

THOSE CALLS FOR “CASHLESS SOCIETY” AND THOSE STORIES ABOUT “CYBER WARFARE”: A CONTRADICTION WORTH NOTING

Posted on May 26, 2015 by Joseph P. Farrell •http://gizadeathstar.com/2015/05/those-calls-for-cashless-society-and-those-stories-about-cyber-warfare-a-contradiction-worth-noting/

Today is an usual blog, in that I want to write about two seemingly disparate articles, in order to point out an emerging contradiction in the "officially promoted and sponsored narratives" of globaloney. The first of these articles was shared by Mr. J.K., and the second by Mr S.D. to whom we are grateful for bringing them to our attention:
Leading German Keynesian Economist Calls For Cash Ban
New Russian Hacks Target US Banks
While one encounters such articles as the first from time to time, with the usual arguments that coins and paper money, i.e., actual physical or "analogue" media of exchange(and please note, the two are not the same: electronic blips in a computer accounting system are not the same thing as analogue entries in actual physical ledgers), are obsolete, costly, and with the usual argument that a cashless society would actually allow the underground criminal economies to dry up, I suspect the truth is the exact opposite. The only thing that would be entirely transparent in such a system would be the public economy, the hidden economies would become even more opaque to public examination and governmental oversight and scrutiny than ever before. The only ones benefiting from such a restriction of the types of money in circulation would be the financial oligarchs and the associated criminals associated with them. I have more observations to make on this subject, but that will have to await its due time and circumstance. But suffice it to say, such a move to a cashless society would not eliminate any hidden systems of finance nor any hidden economies, but only make them even more hidden.
Which brings us to the second article, and to the contradiction of the official "memes" being promoted (really folks, you'd think Rockefailure, Buffet, Rottenchild, Soros, Ilk & Associates would hire better "experts" and at least concoct better-coordinated memes). It goes without saying that if Russia, China, and whoever else might be posing threats to various Western banks through their non-stop cyber-warfare and hacking schemes, then no matter how secure one might make such networks, one can never guarantee that the probability of successful hacks is zero. It may be vanishingly small, but never zero, and hence, one would be extremely ill-advised to have an entirely cashless, digital-currency society. Would always want and need, in such circumstances, continued physical and analogue media of exchange, including such old fashioned and "obsolete" media like coins, paper money, and ledger books, with real accountants dipping real quills into real bottles of ink and making real entries in said books (so to speak). Otherwise, one exposes an entire financial system - reduced to only one type of currency - to a needless risk of overwhelming and decisive compromise.
To put it country simple: would one wish to promote a "cashless" society in the face of the current international situation, with terrorists and nation-state-sponsored cyber-attacks on western banks?
I think not, for in the end, even those oligarchs stupidly pushing for such a scheme could literally be wiped out, and literally at the push of a button.
Which brings us to ask an important question, one full of potential implications for "high octane speculation." Knowing this - as "they" surely do, why would "they" be pushing for such a scheme, in spite of the risks? For once, I will forego the temptations to offer my own speculations, which I withhold for a future moment. Suffice it to say, however, that the extreme risks posed by such a cashless scheme would have to be outweighed by even more extreme risks... and in that, there may lie quite a tale...

The New “Water Barons”: Wall Street Mega-Banks are Buying up the World’s Water

By Jo-Shing Yang

Global Research, May 25, 2015

Market Oracle 21 December 2012

Theme: Environment, Global Economy

This article was first published on December 21, 2012
A disturbing trend in the water sector is accelerating worldwide. The new “water barons” — the Wall Street banks and elitist multibillionaires — are buying up water all over the world at unprecedented pace.
Familiar mega-banks and investing powerhouses such as Goldman Sachs, JP Morgan Chase, Citigroup, UBS, Deutsche Bank, Credit Suisse, Macquarie Bank, Barclays Bank, the Blackstone Group, Allianz, and HSBC Bank, among others, are consolidating their control over water. Wealthy tycoons such as T. Boone Pickens, former President George H.W. Bush and his family, Hong Kong’s Li Ka-shing, Philippines’ Manuel V. Pangilinan and other Filipino billionaires, and others are also buying thousands of acres of land with aquifers, lakes, water rights, water utilities, and shares in water engineering and technology companies all over the world.
The second disturbing trend is that while the new water barons are buying up water all over the world, governments are moving fast to limit citizens’ ability to become water self-sufficient (as evidenced by the well-publicized Gary Harrington’s case in Oregon, in which the state criminalized the collection of rainwater in three ponds located on his private land, by convicting him on nine counts and sentencing him for 30 days in jail). Let’s put this criminalization in perspective:
Billionaire T. Boone Pickens owned more water rights than any other individuals in America, with rights over enough of the Ogallala Aquifer to drain approximately 200,000 acre-feet (or 65 billion gallons of water) a year. But ordinary citizen Gary Harrington cannot collect rainwater runoff on 170 acres of his private land.
It’s a strange New World Order in which multibillionaires and elitist banks can own aquifers and lakes, but ordinary citizens cannot even collect rainwater and snow runoff in their own backyards and private lands.

“Water is the oil of the 21st century.” Andrew Liveris, CEO of DOW Chemical Company (quoted in The Economist magazine, August 21, 2008)

In 2008, I wrote an article,

“Why Big Banks May Be Buying up Your Public Water System,” in which I detailed how both mainstream and alternative media coverage on water has tended to focus on individual corporations and super-investors seeking to control water by buying up water rights and water utilities. But paradoxically the hidden story is a far more complicated one. I argued that the real story of the global water sector is a convoluted one involving “interlocking globalized capital”: Wall Street and global investment firms, banks, and other elite private-equity firms — often transcending national boundaries to partner with each other, with banks and hedge funds, with technology corporations and insurance giants, with regional public-sector pension funds, and with sovereign wealth funds — are moving rapidly into the water sector to buy up not only water rights and water-treatment technologies, but also to privatize public water utilities and infrastructure.

Now, in 2012, we are seeing this trend of global consolidation of water by elite banks and tycoons accelerating. In a JP Morgan equity research document, it states clearly that “Wall Street appears well aware of the investment opportunities in water supply infrastructure, wastewater treatment, and demand management technologies.” Indeed, Wall Street is preparing to cash in on the global water grab in the coming decades. For example, Goldman Sachs has amassed more than $10 billion since 2006 for infrastructure investments, which include water. A 2008 New York Times article mentioned Goldman Sachs, Morgan Stanley, Credit Suisse, Kohlberg Kravis Roberts, and the Carlyle Group, to have “amassed an estimated an estimated $250 billion war chest — must of it raised in the last two years — to finance a tidal wave of infrastructure projects in the United States and overseas.”
By “water,” I mean that it includes water rights (i.e., the right to tap groundwater, aquifers, and rivers), land with bodies of water on it or under it (i.e., lakes, ponds, and natural springs on the surface, or groundwater underneath), desalination projects, water-purification and treatment technologies (e.g., desalination, treatment chemicals and equipment), irrigation and well-drilling technologies, water and sanitation services and utilities, water infrastructure maintenance and construction (from pipes and distribution to all scales of treatment plants for residential, commercial, industrial, and municipal uses), water engineering services (e.g., those involved in the design and construction of water-related facilities), and retail water sector (such as those involved in the production, operation, and sales of bottled water, water vending machines, bottled water subscription and delivery services, water trucks, and water tankers).
Update of My 2008 Article: Mega-Banks See Water as a Critical Commodity
Since 2008, many giant banks and super-investors are capturing more market share in the water sector and identifying water as a critical commodity, much hotter than petroleum.
Goldman Sachs: Water Is Still the Next Petroleum
In 2008, Goldman Sachs called water “the petroleum for the next century” and those investors who know how to play the infrastructure boom will reap huge rewards, during its annual “Top Five Risks” conference. Water is a U.S.$425 billion industry, and a calamitous water shortage could be a more serious threat to humanity in the 21st century than food and energy shortages, according to Goldman Sachs’s conference panel. Goldman Sachs has convened numerous conferences and also published lengthy, insightful analyses of water and other critical sectors (food, energy).
Goldman Sachs is positioning itself to gobble up water utilities, water engineering companies, and water resources worldwide. Since 2006, Goldman Sachs has become one of the largest infrastructure investment fund managers and has amassed a $10 billion capital for infrastructure, including water.
In March 2012, Goldman Sachs was eyeing Veolia’s UK water utility business, estimated at £1.2 billion, and in July it successfully bought Veolia Water, which serves 3.5 million people in southeastern England.
Previously, in September 2003, Goldman Sachs partnered with one of the world’s largest private-equity firm Blackstone Group and Apollo Management to acquire Ondeo Nalco (a leading company in providing water-treatment and process chemicals and services, with more than 10,000 employees and operations in 130 countries) from French water corporation Suez S.A. for U.S.$4.2 billion.
In October 2007, Goldman Sachs teamed up with Deutsche Bank and several partners to bid, unsuccessfully, for U.K.’s Southern Water. In November 2007, Goldman Sachs was also unsuccessful in bidding for U.K. water utility Kelda. But Goldman Sachs is still looking to buy other water utilities.
In January 2008, Goldman Sachs led a team of funds (including Liberty Harbor Master Fund and the Pinnacle Fund) to buy U.S.$50 million of convertible notes in China Water and Drinks Inc., which supplies purified water to name-brand vendors like Coca-Cola and Taiwan’s top beverage company Uni-President. China Water and Drinks is also a leading producer and distributor of bottled water in China and also makes private-labeled bottled water (e.g., for Sands Casino, Macau). Since China has one of the worse water problems in Asia and a large emerging middle class, its bottled-water sector is the fastest-growing in the world and it’s seeing enormous profits. Additionally, China’s acute water shortages and serious pollution could “buoy demand for clean water for years to come, with China’s $14.2 billion water industry a long-term investment destination” (Reuters, January 28, 2008).
The City of Reno, Nevada, was approached by Goldman Sachs for “a long-term asset leasing that could potentially generate significant cash for the three TMWA [Truckee Meadows Water Authority] entities. The program would allow TMWA to lease its assets for 50 years and receive an up-front cash payment” (Reno News & Review, August 28, 2008). Essentially, Goldman Sachs wants to privatize Reno’s water utility for 50 years. Given Reno’s revenue shortfall, this proposal was financially attractive. But the water board eventually rejected the proposal due to strong public opposition and outcry.
Citigroup: The Water Market Will Soon Eclipse Oil, Agriculture, and Precious Metals
Citigroup’s top economist Willem Buitler said in 2011 that the water market will soon be hotter the oil market (for example, see this and this):

“Water as an asset class will, in my view, become eventually the single most important physical-commodity based asset class, dwarfing oil, copper, agricultural commodities and precious metals.”

In its recent 2012 Water Investment Conference, Citigroup has identified top 10 trends in the water sector, as follows:
1. Desalination systems
2. Water reuse technologies
3. Produced water / water utilities
4. Membranes for filtration
5. Ultraviolet (UV) disinfection
6. Ballast-water treatment technologies
7. Forward osmosis used in desalination
8. Water-efficiency technologies and products
9. Point-of-use treatment systems
10. Chinese competitors in water
Specifically, a lucrative opportunity in water is in hydraulic fracturing (or fracking), as it generates massive demand for water and water services. Each oil well developed requires 3 to 5 million gallons of water, and 80% of this water cannot be reused because it’s three to 10 times saltier than seawater. Citigroup recommends water-rights owners sell water to fracking companies instead of to farmers because water for fracking can be sold for as much as $3,000 per acre-foot instead of only $50 per acre/foot to farmers.
The ballast-water treatment sector, currently at $1.35 billion annually, is estimated to reach $30 to $50 billion soon. The water-filtration market is expected to outgrow the water-equipment market: Dow estimates it to be a $5 billion market annually instead of only $1 billion now.
Citigroup is aggressively raising funds for its war chest to participate in the coming tidal wave of infrastructure privatization: in 2007 it established a new unit called Citi Infrastructure Investors through its Citi Alternative Investments unit. According to Reuters, Citigroup “assembled some of the biggest names in the infrastructure business at the same time it is building a $3 billion fund, including $500 million of its own capital. The fund, according to a person familiar with the situation, will have only a handful of outside investors and will be focused on assets in developed markets” (May 16, 2007). Citigroup initially sought only U.S.$3 billion for its first infrastructure fund but was seeking U.S.$5 billion in April 2008 (Bloomberg, April 7, 2008).
Citigroup partnered with HSBC Bank, Prudential, and other minor partners to acquire U.K.’s water utility Kelda (Yorkshire Water) in November 2007. This week, Citigroup signed a 99-year lease with the City of Chicago for Chicago’s Midway Airport (it partnered with John Hancock Life Insurance Company and a Canadian private airport operator). Insiders said that Citigroup is among those bidding for the state-owned company Letiste Praha which operates the Prague Airport in the Czech Republic (Bloomberg, February 7, 2008).
As the five U.K. water utility deals illustrate, typically no one single investment bank or private-equity fund owns the entire infrastructure project — they partner with many others. The Citigroup is now entering India’s massive infrastructure market by partnering the Blackstone Group and two Indian private finance companies; they have launched a U.S.$5 billion fund in February 2007, with three entities (Citi, Blackstone, and IDFC) jointly investing U.S.$250 million. India requires about U.S.$320 billion in infrastructure investments in the next five years (The Financial Express, February 16, 2007).
UBS: Water Scarcity Is the Defining Crisis of the 21st Century
In 2006, UBS Investment Research, a division of Switzerland-based UBS AG, Europe’s largest bank by assets, entitled its 40-page research report, “Q-Series®:Water”—“Water scarcity: The defining crisis of the 21st century?” (October 10, 2006) In 2007, UBS, along with JP Morgan and Australia’s Challenger Fund, bought UK’s Southern Water for £4.2biillion.
Credit Suisse: Water Is the “Paramount Megatrend of Our Time”
Credit Suisse published its report about Credit Suisse Water Index (January 21, 2008) urged investors that “One way to take advantage of this trend is to invest in companies geared to water generation, preservation, infrastructure treatment and desalination. The Index enables investors to participate in the performance of the most attractive companies….” The trend in question, according to Credit Suisse, is the “depletion of freshwater reserves” attributable to “pollution, disappearance of glaciers (the main source of freshwater reserves), and population growth, water is likely to become a scarce resource.”
Credit Suisse recognizes water to be the “paramount megatrend of our time” because of a water-supply crisis might cause “severe societal risk” in the next 10 years and that two-thirds of the world’s population are likely to live under water-stressed conditions by 2025. To address water shortages, it has identified desalination and wastewater treatment as the two most important technologies. Three sectors for good investments include the following:
§ Membranes for desalination and wastewater treatment
§ Water infrastructure — corrosion resistance, pipes, valves, and pumps
§ Chemicals for water treatment
It also created the Credit Suisse Water Index which has the equally weighed index of 30 stocks out of 128 global water stocks. For investors, it offered “Credit Suisse PL100 World Water Trust (PL100 World Water),” launched in June 2007, with $112.9 million.
Credit Suisse partnered with General Electric (GE Infrastructure) in May 2006 to establish a U.S.$1 billion joint venture to profit from privatization and investments in global infrastructure assets. Each partner will commit U.S.$500 million to target electricity generation and transmission, gas storage and pipelines, water facilities, airports, air traffic control, ports, railroads, and toll roads worldwide. This joint venture has estimated that the developed market’s infrastructure opportunities are at U.S.$500 billion, and emerging world’s infrastructure market is U.S.$1 trillion in the next five years (Credit Suisse’s press release, May 31, 2006).
In October 2007, Credit Suisse partnered with Cleantech Group (a Michigan-based market-research, consulting, media, and executive-search firm that operates cleantech forums) and Consensus Business Group (a London-based equity firm owned by U.K. billionaire Vincent Tchenguiz) to invest in clean technologies worldwide. The technologies will also clean water technologies.
During its Asian Investment Conference, it said that “Water is a focus for those in the know about global strategic commodities. As with oil, the supply is finite but demand is growing by leaps and unlike oil there is no alternative.” (Credit Suisse, February 4, 2008). Credit Suisse sees the global water market with U.S.$190 billion in revenue in 2005 and was expected to grow to U.S.$342 billion by 2010. It sees most significant growth opportunities in China.
JPMorgan Chase: Build Infrastructure War Chests to Buy Water, Utilities, and Public Infrastructure Worldwide
One of the world’s largest banks, JPMorgan Chase has aggressively pursued water and infrastructure worldwide. In October 2007, it beat out rivals Morgan Stanley and Goldman Sachs to buy U.K.’s water utility Southern Water with partners Swiss-based UBS and Australia’s Challenger Infrastructure Fund. This banking empire is controlled by the Rockefeller family; the family patriarch David Rockefeller is a member of the elite and secretive Bilderberg Group, Council on Foreign Relations, and Trilateral Commission.
JPMorgan sees infrastructure finance as a global phenomenon, and it is joined by its global peers in investment and banking institution in their rush to cash in on water and infrastructure. JPMorgan’s own analysts estimate that the emerging markets’ infrastructure is approximately U.S.$21.7 trillion over the next decade.
JPMorgan created a U.S.$2 billion infrastructure fund to go after India’s infrastructure projects in October 2007. The targeted projects are transportation (roads, bridges, railroads) and utilities (gas, electricity, water). India’s finance minister has been estimated that India requires about U.S.$500 billion in infrastructure investments by 2012. In this regard, JPMorgan is joined by Citigroup, the Blackstone Group, 3i Group (Europe’s second-largest private-equity firm), and ICICI Bank (India’s second-largest bank) (International Herald Tribune, October 31, 2007). Its JPMorgan Asset Management has also established an Asian Infrastructure & Related Resources Opportunity Fund which held a first close on U.S.$500 million (€333 million) and will focus on China, India, and other Southern Asian countries, with the first two investments in China and India (Private Equity Online, August 11, 2008). The fund’s target is U.S.$1.5 billion.
JPMorgan’s Global Equity Research division also published a 60-page report called “Watch water: A guide to evaluating corporate risks in a thirsty world” (April 1, 2008).
In 2010, J.P. Morgan Asset Management and Water Asset Management led a $275 million buyout bid for SouthWest Water.
Allianz Group: Water Is Underpriced and Undervalued
Founded in 1890, Germany’s Allianz Group is one of the leading global services providers in insurance, banking, and asset management in about 70 countries. In April 2008, Allianz SE launched the Allianz RCM Global Water Fund which invests in equity securities of water-related companies worldwide, emphasizing long-term capital appreciation. Alliance launched its Global EcoTrends Fund in February 2007 (Business Wire, February 7, 2007).
Allianz SE’s Dresdner Bank AG told its investors that “Investments in water offer opportunities: Rising oil prices obscure our view of an even more serious scarcity: water. The global water economy is faced with a multi-billion dollar need for capital expenditure and modernization. Dresdner Bank sees this as offering attractive opportunities for returns for investors with a long-term investment horizon.” (Frankfurt, August 14, 2008)
Like Goldman Sachs, Allianz has the philosophy that water is underpriced. A co-manager of the Water Fund in Frankfurt, said, “A key issue of water is that the true value of water is not recognized. …Water tends to be undervalued around the world. …Perhaps that is one of the reasons why there are so many places with a lack of supply due to a lack of investment. With that in mind, it makes sense to invest in companies that are engaged in improving water quality and infrastructure.” Allianz sees two key investment drivers in water: (1) upgrading the aging infrastructure in the developed world; and (2) new urbanization and industrialization in developing countries such as China and India.
Barclays PLC: Water Index Funds and Exchange-Traded Funds
Barclays PLC is a U.K.-based major global financial services provider operating in all over the world with roots in London since 1690; it operates through its subsidiary Barclays Bank PLC and its investment bank called Barclays Capital.
Barclays Bank’s unit Barclays Global Investors manages an exchange-traded fund (ETF) called iShares S&P Global Water, which is listed on the London Stock Exchanges and can be purchased like any ordinary share through a broker. Touting the iShares S&P Global Water as offering “a broad based exposure to shares of the world’s largest water companies, including water utilities and water equipment stocks” of water companies around the world, this fund as of March 31, 2007 was valued at U.S.$33.8 million.
Barclays also have a climate index fund: launched on January 16, 2008, SAM Indexes GmbH licensed its Dow Jones Sustainability Index to Barclays Capital for investors in Germany and Switzerland. Many other banks also have a climate index or sustainability index.
In October 2007, Barclays Capital also partnered with Protected Distribution Limited (PDL) to launch a new water investment fund (with expected annual returns of 9% to 11%) called Protected Water Fund. This new fund, listed in the Isle of Man, requires a minimum of £10,000 and is structured as a 10-year investment with Barclays Bank providing 100% of capital protection until maturity on October 11, 2017. The Protected Water Fund will be invested in some of the world’s largest water companies; its investment decisions will be made based on an index created by Barclays Capital, the Barclays World Water Strategy, which charts the performance of some of the world’s largest water-related stocks (Investment Week and Reuters, October 11, 2007; Business Week, October 15, 2007).
Deutsche Bank’s €2 Billion Investment in European Infrastructure: “Megatrend” in Water, Climate, Infrastructure, and Agribusiness Investments
Deutsche Bank is one of the major players in the water sector worldwide. Its Deutsche Bank Advisors have identified water as a part of the climate investment strategies. In its presentation, “Global Warming: Implications for Investors,” they have identified the four following major areas for water investment:
§ Distribution and management: (1) Supply and recycling, (2) water distribution and sewage, (3) water management and engineering.
§ Water purification: (1) Sewage purification, (2) disinfection, (3) desalination, (4) monitoring.
§ Water efficiency (demand): (1) Home installation, (2) gray-water recycling, (3) water meters.
§ Water and nutrition: (1) Irrigation, (2) bottled water.
In addition to water, the other two new resources identified were agribusiness (e.g., pesticides, genetically modified seeds, mineral fertilizers, agricultural machinery) and renewable energies (e.g., solar, wind, hydrothermal, biomass, hydroelectricity).
The Deutsche Bank has established an investment fund of up to €2 billion in European infrastructure assets using its Structured Capital Markets Group (SCM), part of the bank’s Global Markets division. The bank already has several “highly attractive infrastructure assets,” including East Surrey Holdings, the owner of U.K.’s water utility Sutton & East Surrey Water (Deutsche Bank press release, September 22, 2006).
Moreover, Deutsche Bank has channeled €6 billion (U.S.$8.55 billion) into climate change funds, which will target companies with products that cut greenhouse gases or help people adapt to a warmer world, in sectors from agriculture to power and construction (Reuters, October 18, 2007).
In addition to SCM, Deutsche Bank also has the RREEF Infrastructure, part of RREEF Alternative Investments, headquartered in New York with main hubs in Sydney, Singapore, and London. RREEF Infrastructure has more than €6.7 billion in assets under management. One of its main targets is utilities, including electricity networks, water-treatment or distribution operations, and natural-gas networks. In October 2007, RREEF partnered with Goldman Sachs, GE, Prudential, and Babcok & Brown Ltd. to bid unsuccessfully for U.K.’s water utility Southern Water.
§ Crediting the boom in European infrastructure investment, the RREEF fund by August 2007 had raised €2 billion (U.S.$2.8 billion); Europe’s infrastructure market is valued at between U.S.$4 trillion to U.S.$6 trillion (DowJones Financial News Online, August 7, 2007).
§ Bulgaria — Deutsche Bank Bulgaria is planning to participate in large infrastructure projects, including public-private partnership projects in water and sewage worth up to €1 billion (Sofia Echo Media, February 26, 2008).
§ Middle East — Along with Ithmaar Bank B.S.C. (an private-equity investment bank in Bahrain), Deutsche Bank co-managed a U.S.$2 billion Shari’a-compliant Infrastructure and Growth Capital Fund and plans to target U.S.$630 billion in regional infrastructure.
Deutsche Bank AG is co-owner of Aqueduct Capital (UK) Limited which in 2006 offered to buy U.K.’s sixth-largest water utility Sutton and East Surrey Water plc from British tycoon Guy Hand. According to an OFWAT consultation paper (May 2007), Deutsche Bank formed this new entity, Aqueduct Capital (short for ACUK), in October 2005, with two public pension funds in Canada, Singapore’s life insurance giant, and a Canadian province’s investment fund, among others. This case, again, is an illustration of the complex nature of ownership of water utilities today, with various types of institutions crossing national boundaries to partner with each other to hold a stake in the water sector. With its impressive war chest dedicated to water, food, and infrastructure, Deutsche Bank is expected to become a major player in the global water sector.
Other Mega-Banks Eyeing Water as Hot Investment
Merrill Lynch (before being bought by Bank of America) issued a 24-page research report titled “Water scarcity; a bigger problem than assumed” (December 6, 2007). ML said that water scarcity is “not limited to arid climates.”
Morgan Stanley in its publication, “Emerging Markets Infrastructure: Just Getting Started” (April 2008) recommends three areas of investment opportunities in water: water utilities, global operators (such as Veolia Environment), and technology companies (such as those that manufacture membranes and chemicals used in water treatment to the water industry).
Mutual Funds and Hedge Funds Join the Action in Water
Water investment funds are on the rise, such as these four well-known water-focused mutual funds:
1. Calvert Global Water Fund (CFWAX) — $42 million in assets as of 2010, which holds 30% of its assets in water utilities, 40% in infrastructure companies, and 30% in water technologies. Also between 65% to 70% of the water stocks derived more than 50% of their revenue from water-related activities.
2. Allianz RCM Global Water Fund (AWTAX) — $54 million assets as of 2010, most of it invested in water utilities.
3. PFW Water Fund (PFWAX) — $17 million in assets as of 2010, with a minimum investment of $2,500, with 80% invested in water-related companies….
4. Kinetics Water Infrastructure Advantaged Fund (KWIAX) — $26 million in assets as of 2010, with a minimum investment of $2,500.
This is a brief list of water-centered hedge funds:
§ Master Water Equity Fund — Summit Global AM (United States)
§ Water Partners Fund — Aqua Terra AM (United States)
§ The Water Fund — Terrapin AM (United States)
§ The Reservoir Fund — Water AM (United States)
§ The Oasis Fund — Perella Weinberg AM (United States)
§ Signina Water Fund — Signina Capital AG (Switzerland)
§ MFS Water Fund of Funds — MFS Aqua AM (Australia)
§ Triton Water Fund of Funds — FourWinds CM (United States)
§ Water Edge Fund of Funds — Parker Global Strategies LLC (United States)
Other banks have launched water-targeted investment funds. Several well-known specialized water funds include Pictet Water Fund, SAM Sustainable Water Fund, Sarasin Sustainable Water Fund, Swisscanto Equity Fund Water, and Tareno Waterfund. Several structured water products offered by major investment banks include ABN Amro Water Stocks Index Certificate, BKB Water Basket, ZKB Sustainable Basket Water, Wagelin Water Shares Certificate, UBS Water Strategy Certificate, and Certificate on Vontobel Water Index. There are also several water indexes and index funds, as follows:
Credit Suisse Water Index
HSBC Water, Waste, and Pollution Control Index
Merrill Lynch China Water Index
S&P Global Water Index
First Trust ISE Water Index Fund (FIW)
International Securities Exchange’s ISE-B&S Water Index
The following is a small sample of other water funds and certificates (not exhaustive of the current range of diverse water products available):
Allianz RCM Global EcoTrends Fund
Allianz RCM Global Water Fund
UBS Water Strategy Certificate—it has a managed basket of 25 international stocks
Summit Water Equity Fund
Maxxwater Global Water Fund
Claymore S&P Global Water ETF (CGW)
Barclays Global Investors’ iShares S&P Global Water
Barclays and PDL’s Protected Water Fund based on Barclays World Water Strategy
Invesco’s PowerShares Water Resources Portfolio ETF (PHO)
Invesco’s PowerShares Global Water (PIO)
Pictet Asset Management’s Pictet Water Fund and Pictet Water Opportunities Fund
Canadian Imperial Bank of Commerce’s Water Growth Deposit Notes
Criterion Investments Limited’s Criterion Water Infrastructure Fund
One often-heard reason for the investment banks’ rush to control of water is that “Utilities are viewed as relatively safe assets in an economic downturn so [they] are more isolated than most from the global credit crunch, initially sparked by concerns over U.S. subprime mortgages” (Reuters, October 9, 2007). A London-based analyst at HSBC Securities told Bloomberg News that water is a good investment because “You’re buying something that’s inflation proof and there’s no threat to earnings really. It’s very stable and you can sell it any time you want” (Bloomberg, October 8, 2007).
More Pension Funds Investing in Water
Many pension funds have entered the water sector as a relatively safe sector for investment. For example, BT Pension Scheme (of British Telecom plc) has bought stakes in Thames Water in 2012, while Canadian pension funds CDPQ (Caisse de dépôt et placement du Québec, which manages public pension funds in Québec) and CPPIB (Canada Pension Plan Investment Board) have acquired England’s South East Water and Anglian Water, respectively, as reported by Reuters this year.
Sovereign Wealth Investment Funds Jumping into Water
In January 2012, China Investment Corporation has bought 8.68% stakes in Thames Water, the largest water utility in England, which serves parts of the Greater London area, Thames Valley, and Surrey, among other areas.
In November 2012, One of the world’s largest sovereign wealth funds, the Abu Dhabi Investment Authority (ADIA), also purchased 9.9% stake in Thames Water.
Billionaires Sucking up Water Globally: George H.W. Bush and Family, Li Ka-shing, the Filipino Billionaires, and Others
Not only are the mega-banks investing heavily in water, the multibillionaire tycoons are also buying water.
Update on Hong Kong Multibillionaire Li Ka-shing’s Water Acquisition
In summer 2011, the Hong Kong multibillionaire tycoon Li Ka-shing who owns Cheung Kong Infrastructure (CKI), bought Northumbrian Water, which serves 2.6 million people in northeastern England, for $3.9 billion (see this and this).
CKI also sold Cambridge Water for £74 million to HSBC in 2011. Not satisfied with controlling the water sector, in 2010, CKI with a consortium bought EDF’s power networks in UK for £5.8 billion.
Li is now also collaborating with Samsung on investing in water treatment.
Warren Buffet Buys Nalco, a Chemical Maker and Water Process Technology Company
Through his Berkshire Hathaway, Warren Buffet is the largest institutional investor of Nalco Holding Co. (NLC), a subsidiary of Ecolab, with 9 million shares. Nalco was named 2012 Water Technology Company of the Year. Nalco manufactures treatment chemicals and water treatment process technologies.
But the company Nalco is not just a membrane manufacturer; it also produced the infamous toxic chemical dispersant Corexit which was used to disperse crude oil in the aftermath of BP’s oil spill in the Gulf of Mexico in 2010. Before being sold to Ecolab, Nalco’s parent company was Blackstone……
Former President George H.W. Bush’s Family Bought 300,000 Acres on South America’s and World’s Largest Aquifer, Acuifero Guaraní
In my 2008 article, I overlooked the astonishingly large land purchases (298,840 acres, to be exact) by the Bush family in 2005 and 2006. In 2006, while on a trip to Paraguay for the United Nation’s children’s group UNICEF, Jenna Bush (daughter of former President George W. Bush and granddaughter of former President George H.W. Bush) reportedly bought 98,840 acres of land in Chaco, Paraguay, near the Triple Frontier (Bolivia, Brazil, and Paraguay). This land is said to be near the 200,000 acres purchased by her grandfather, George H.W. Bush, in 2005.
The lands purchased by the Bush family sit over not only South America’s largest aquifer — but the world’s as well — Acuifero Guaraní, which runs beneath Argentina, Brazil, Paraguay, and Uruguay. This aquifer is larger than Texas and California combined.
Online political magazine Counterpunch quoted Argentinean pacifist Adolfo Perez Esquivel, the winner of 1981 Nobel Peace Prize, who “warned that the real war will be fought not for oil, but for water, and recalled that Acuifero Guaraní is one of the largest underground water reserves in South America….”
According to Wikipedia, this aquifer covers 1,200,000 km², with a volume of about 40,000 km³, a thickness of between 50 m and 800 m and a maximum depth of about 1,800 m. It is estimated to contain about 37,000 km³ of water (arguably the largest single body of groundwater in the world, although the overall volume of the constituent parts of the Great Artesian Basin is much larger), with a total recharge rate of about 166 km³/year from precipitation. It is said that this vast underground reservoir could supply fresh drinking water to the world for 200 years.
Filipino Tycoon Manuel V. Pangilinan and Others Buy Water Services in Vietnam
In October 2012, Filipino businessman Manuel V. Pangilinan went to Vietnam to scout for investment opportunities, particularly on toll road and water services. Mr. Pangilinan and other Filipino billionaires, such as the owners of the Ayala Corp. and subsidiary Manila Water Co. earlier announced a deal to buy a 10-per cent stake in Ho Chi Minh City Infrastructure Investment Joint Stock Co. (CII) and a 49-per cent stake in Kenh Dong Water Supply Joint Stock Co. (Kenh Dong).
The Ayala group has also entered the Vietnamese market by buying significant minority interest in a leading infrastructure company and a bulk water supply company both based in Ho Chi Minh City.
Water Grabbing Is Unstoppable
Unfortunately, the global water and infrastructure-privatization fever is unstoppable: many local and state governments are suffering from revenue shortfalls and are under financial and budgetary strains. These local and state governments can longer shoulder the responsibilities of maintaining and upgrading their own utilities. Facing offers of millions of cash from Goldman Sachs, JPMorgan Chase, Citigroup, UBS, and other elite banks for their utilities and other infrastructure and municipal services, cities and states will find it extremely difficult to refuse these privatization offers.
The elite multinational and Wall Street banks and investment banks have been preparing and waiting for this golden moment for years. Over the past few years, they have amassed war chests of infrastructure funds to privatize water, municipal services, and utilities all over the world. It will be extremely difficult to reverse this privatization trend in water.
References for Several Articles Mentioned

“Goldman Sachs eyes bid for Veolia Water,” by Anousha Sakoui and Daniel Schäfer, Financial Times, March 13, 2012.

http://www.ft.com/cms/s/0/183cfae4-6d21-11e1-a7c7-00144feab49a.html#axzz2CM8OLnFQ

“Hong Kong tycoon to buy Northumbrian Water,” by Mark Wembridge, Financial Times, August 2, 2011.

http://www.ft.com/intl/cms/s/0/3df07960-bcdb-11e0-bdb1-00144feabdc0.html#axzz2CM8OLnFQ

“Why Big Banks May Be Buying up Your Public Water System: In uncertain economic and environmental times, big banks and financial groups are buying up public water systems as safe investments,” by Jo-Shing Yang, AlterNet, October 31, 2008.

http://www.alternet.org/zstory/105083/why_big_banks_may_be_trying_to_buy_up_your_public_water_system

“Barclays Capital Backs Water Fund,” by Dylan Lobo, October 11, 2007. Reuters.

http://uk.reuters.com/article/2007/10/11/citywire-barclays-water-idUKNOA13736320071011

“Investors Gush Over SouthWest Water Buyout,” March 3, 2010, Forbes.

http://www.forbes.com/2010/03/03/southwest-water-novell-markets-equities-deals-marketnewsvideo.html

“Hideout or Water Raid? Bush’s Paraguay Land Grab,” by CP News Wire, Counterpunch, October 22-26, 2006.

http://www.counterpunch.org/2006/10/20/bush-s-paraguay-land-grab/

“Paraguay in a spin about Bush’s alleged 100,000 acre hideaway,” by Tom Phillips, The Guardian, October 22, 2006.

http://www.guardian.co.uk/world/2006/oct/23/mainsection.tomphillips

“Cities Debate Privatizing Public Infrastructure,” by Jenny Anderson, August 26, 2008, The New York Times.

http://www.nytimes.com/2008/08/27/business/27fund.html?pagewanted=all&_r=0

“Philippine tycoon eyes investments in Vietnam,” by Doris C. Dunlao in Manila, Philippine Daily Inquirer, October 18, 2012.

http://my.news.yahoo.com/philippine-tycoon-eyes-investments-vietnam-060002777.html

Jo-Shing Yang is an independent researcher and author of “Ecological Planning, Design, & Engineering. Solving Global Water Crises: New Paradigms in Wastewater and Water Treatment. Small and On-Site Systems for Water Self-Sufficiency and Sustainability.”