Home | TheWaterBlog

TheWaterBlog: If you want to share unique images and observations in this section, or would like to know about syndicating these posts, send an email to This email address is being protected from spambots. You need JavaScript enabled to view it.!

 

posted by Frank van Steenbergen
September 24, 2012

In recent times of crisis, the economic performance of US has been helped very much by an age-old practice – the printing of extra money (the euphemistic term is ‘quantitative easing’). A shot in the arm for the economy but also one that also brings inflation and weakens the patient. If the dollar was any other currency its bloated being would have been abandoned by now, but of course it is not.  68% of global currency reserves are held in dollars, so dropping the dollar would mean everybody giving up one’s financial buffers.  Much of China’s reserves (in trillions) are in US Treasury Bonds and in other government-linked dollar securities.  Moreover, the yuan is pegged to the dollar in a fixed exchange rate.  What the ‘quantitative easing read money printing’ has done is that it exports inflation into the Chinese economy causing, among other things, the value of the Chinese reserves to whittle away. As one may expect, this has not gone down very well with many.

James Rickards in his highly recommended book ‘The currency wars: the making of the next global crisis’ describes this US inflation/ devaluation strategy – apparently devised as a ploy against an undervalued Chinese yuan (and unlikely to work to protect one’s economy). It is, however, a strategy that may self-defeat and accelerate the demise of the dollar as the global currency.

Is there a way out? Yes there is. China in particular has been gradually moving away from keeping its reserves in the highly speculative dollar – the currency that has come to symbolize the enormous virtual economy where money is created out of nothing – be it by the US Federal Reserve, credit card companies or high street banks.  The answer is risk spreading – investing in a more diverse basket of currencies – and very important: investing in commodities. These commodities represent a real value and they restore the relation between the currency (the yuan in this case) and the asset base – more or less like the gold standard of old.

Citing James Rickards (pg 163): “Commodities include not only obvious things like gold, oil and copper, but also stocks of mining companies (….) and agricultural land that can be used to grow commodities such as wheat, corn, land and coffee. Also included is the most valuable commodity of all – water. Special funds are being organized to buy exclusive rights to freshwater from deep lakes and glaciers in Patagonia…”

This puts a new spin on the current rush to land and water grabbing. It is not only to feed one’s growing population and cater for an expanding world market in basic food, fibre and fodder. It is also to secure one’s assets and get hold of the increasingly scarce global resource properties – to peg one’s economy and currency to something solid – natural resources, even if they are outside one’s own country. The strategy is not only Chinese. One sees the rush towards owning land in times of economic uncertainty everywhere.

What does this mean for water and land? One is what has been documented a lot in land and water grabbing in recent years: denying ordinary citizens access to the land and water resources they used for a long time and that they may had in mind for their children. The second will be less productive use. As land and water become assets and securities, their productive use and proper management takes a back seat and their economic value is that of speculation rather than productive use. 

  • Herbicides: are they good for you?

    posted by Marta Agujetas Frank van Steenbergen September 17, 2012An amazing trend is the increased use of herbicides in rain-fed farming, for instance in Ghana where this picture was taken. A main driver is shortage of labour, with so many young people leaving rural areas for towns and cities. But are these herbicides good for us?The use of herbicides in often (but others are silent) recommended i...

    Read more

  • Mermaids

    posted by Frank van Steenbergen September 10, 2012 Whereas we may be familiar with the iconic mermaid in the harbor of Copenhagen, in rivers and lakes in Ghana, mermaid creatures are said to live as well. Called ‘Maame Water,’ she is very much like the Mami Wata spirit that is common to many other West African cultures. During the slave trade, the belief in these mermaids travelled to the Car...

    Read more

  • Yemen's 'Magic Soil'

    posted by Taha Alwashali and Frank van Steenbergen September 03, 2012The ancient name of Yemen is ‘Arabia Felix’ - the blessed happy Arabia - and maybe this has something to do with some of the special soils in the country.  A very common soil is the red soil that has an amazing ability to retain water - which in the arid environment of Yemen is a big plus.  Red soil is both cohesive and por...

    Read more

  • Changemakers: Future of Irrigation in Africa

    posted by Frank van Steenbergen August 27, 2012Much hope is pinned on the development of small-holder irrigation in Africa. In many places there are ample water resources – groundwater and local streams. Several new irrigation systems, large and small, have been developed. Even so, irrigation development is taking off slowly and failure rates are high.                      There are s...

    Read more

  • Financial Crisis and Water Utilities

    posted by Frank van Steenbergen August 21, 2012Over the past three-four years, the financial crisis has dominated the headlines– with much of the attention on national debts in Southern Europe at the moment. What gets less attention is the financial position of lower tiers of governments (municipalities, provinces) or public utilities, such as drinking water companies or water boards.Traditional...

    Read more

  • Weapons of Mass Destruction

    posted by Frank van Steenbergen August 13, 2012 What is more important – public health, or security and deterrence? To answer this impossible question, lets take a closer look at the sub-district of Kahuta, situated not far northeast from Pakistan’s capital Islamabad.Located in Kahuta is Khan Research Laboratories:  Pakistan's main nuclear weapons lab and its center for long-range missile de...

    Read more

  • The Inca Vessel

    Posted by Frank van Steenbergen August 06, 2012One of the most beautiful objects in the National Museum of the American Indian in New York is the Inca Terraced Vessel. It is estimated to be six hundred years old and comes from coastal Peru.  The vessel looks like a replica of an Inka temple, but on closer look it seems to represent a carefully terraced landscape.The three lower steps of the vesse...

    Read more

  • Fluorosis: The Value of Norms (?)

    posted by Frank van Steenbergen July 30, 2012In the Habala district of Southern Ethiopia, fluoride levels are high – significantly higher than the WHO norm of 1.5 mg/litre. One would expect dental disorders and even the crippling that is associated with the consumption of fluoride rich water over many years. However, among a sample of 600 people in Habala these common symptoms of fluorosis were ...

    Read more

  • As Bad as it Gets

    posted by Frank van Steenbergen July 24, 2012Imagine water being so scarce that you have to compete with bees to get to it. And that the bees, being more aggressive, win the battle because you can’t bear the stings. And so you are forced to move to another area.This is what happens even now in Ciuabet in Lakes State, South Sudan.  South Sudan is the world’s newest country, but also one whose ...

    Read more

  • Water Refugees: Coastal Groundwater in Yemen

    posted by Frank van Steenbergen July 16, 2012The dramatic story of Al Mujelis goes like this:In the past, the area used to get occasional run away floods from the Wadi Zabid and Wadi Siham. These occasional floods recharged the groundwater. However, over the years the diversion structures in the upper reaches of the river were ‘improved.’ This meant that more water was controlled upstream and...

    Read more