Global Water Crisis: Why Michael Burry is Investing in Blue Gold
Sep 13, 2023
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Michael Burry, the famous "Big Short" investor, joins Patrick Bet-David to discuss the global water crisis and why he is investing in water as a commodity. They delve into topics such as the distribution of freshwater, water scarcity, the Nestle water scandals, and the process of desalination. They also explore the concept of artificial rainmaking and the manipulation of water resources. A fascinating conversation about the looming water crisis and potential investment opportunities in "blue gold".
By 2030, the world is expected to face a 40% shortfall in fresh water supply, highlighting the urgent need to address the global water crisis and find sustainable solutions.
Investing in water rights, water-rich farmland, and water utilities or infrastructure presents a lucrative trillion-dollar market opportunity for investors like Michael Burry, who recognize the potential of water as a valuable commodity.
Deep dives
The Global Water Crisis: Shortfall in Fresh Water Supply
By 2030, the world is expected to face a 40% shortfall in fresh water supply, with over 4 trillion cubic meters of fresh water being used annually. Only 0.65% of Earth's water is fresh, and it is sourced from rivers, lakes, reservoirs, and groundwater aquifers. The overuse of water for cooling power plants and irrigation has led to critically low water levels in major reservoirs like Lake Mead and Lake Powell in the US. This growing water crisis has raised concerns worldwide.
Increasing Demand and Scarcity of Fresh Water
Water demand is projected to increase by 20-30% by 2050, while the population living in severely water-scarce areas is expected to rise from 1.9 billion in 2010 to 3.2 billion by 2050. Regions such as Northern Africa, the Middle East, and South Asia face the highest levels of water scarcity. In contrast, North and South America, Australia, and the Pacific regions have a relatively abundant water supply. The issue of water scarcity has led to controversies involving water companies and large multinational corporations like Nestle, which have been accused of taking excessive amounts of water during times of crisis.
Possible Solutions: Investing in Water and Desalination Technology
The water crisis presents a trillion-dollar market opportunity, attracting investors like Michael Burry. Investing in water rights, water-rich farmland, and water utilities or infrastructure are three viable investment strategies. Desalination is a promising technology that can convert seawater into drinking water. The process has seen significant growth globally since the 1960s, with costs decreasing by more than half in the last three decades. Desalination plants, such as the Sorek plant in Israel and Carlsbad plant in San Diego, are capable of producing millions of gallons of potable water per day. However, desalination is not without its drawbacks, including high energy consumption, environmental impact, and higher costs compared to imported water.
Patrick Bet-David discusses the looming global water crisis, how freshwater is distributed between domestic, industrial, and agricultural use, and why water supply is a serious issue. PBD also reviews what technology could be used to fix freshwater scarcity and water rights.
PBD also unveils how American "Big Short" investor Michael Burry is focused on investing in water as a commodity "blue gold," the CIA's classified program to create fake rain through Operation Popeye, and what really happened in Flint, Michigan between Nestle and the government when drinking water was needed.
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Patrick Bet-David is the founder and CEO of Valuetainment Media. He is the author of the #1 Wall Street Journal Bestseller Your Next Five Moves (Simon & Schuster) and a father of 2 boys and 2 girls. He currently resides in Ft. Lauderdale, Florida.
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