Joining the dots on water scarcity

by | Jan 12, 2008 | Climate and resource scarcity

Tom Engelhardt at The Nation has a good question:

Why is it that, except at relatively obscure websites, you can hardly find a mainstream piece that mentions more than one drought at a time?

Elaborating, he quotes Tim Flannery, author of The Weather Makers, thus:

It’s not just the Southeast of the United States. Europe has had its great droughts and water shortages. Australia is in the grip of a drought that’s almost unbelievable in its ferocity. Again, this is a global picture. We’re just getting much less usable water than we did a decade or two or three decades ago. It’s a sort of thing again that the climate models are predicting. In terms of the floods, again we see the same thing. You know, a warmer atmosphere is just a more energetic atmosphere. So if you ask me about a single flood event or a single fire event, it’s really hard to make the connection, but take the bigger picture and you can see very clearly what’s happening.

Engelhardt himself resumes –

If drought–or call it “desertification”–becomes more widespread, more common in heavily populated parts of the globe already bursting at the seams (and with more people arriving daily), if whole regions no longer have the necessary water, how many trails of tears, how many of those mass migrations or civilizational collapses are possible? How much burning and suffering and misery are we likely to experience? And what then?

These are questions I can’t answer; that the Bush Administration is guaranteed to be desperately unwilling and unprepared to face; and that, as yet, the media has largely refused to consider in a serious way. And if the media can’t face this and begin to connect some dots, why shouldn’t Americans be in denial, too?

But there’s a small sign of mainstream media beginning to sit up straight: a new site on water scarcity, Circle of Blue, set up by a small network of like-minded journalists.  One to add to the watch list…

What if… Spain began to think about leaving the eurozone?

by | Jan 12, 2008 | Europe and Central Asia, Global system

That’s the scenario posited by in an article today by John Dizard, who’s toying with scenarios in which gold would do well.  His reasoning goes like this:

Consider … the plight of Spanish property owners, and the workers and consumers who have prospered and borrowed through that country’s boom. According to a European Commission report issued in the spring of last year, Spain, Portugal and Italy have lost between 15 and 20 per cent of their relative competitiveness since euro entry.

Let us say Spain wanted to increase exports to offset the loss of domestic demand because of a contraction of credit available to finance construction. To accomplish that within the eurozone would require a magical increase in labour and capital productivity. Alternatively, the Spanish could impose on themselves a sudden, dramatic drop in nominal wages and prices. That would, in turn, make much of the country’s private debt unserviceable.

Or – whisper it – Spain and the other euro area current account deficit countries could merely contemplate leaving the eurozone to buy market share for their goods and services with double-digit devaluations. Then bank account holders in Spain, Ireland, Portugal, Greece or even Italy would have a Northern Rock-like incentive to move their cash rapidly to Germany or France. The resulting bank funding crisis for deficit countries, and prospective asset losses for surplus countries, does not bear contemplation.

That is why the ECB could reverse its tight policy rather more quickly than is now discounted in the market. There is a limit to how much monetary policy can be allowed to squeeze leveraged, weak economies. And monetary support for faltering credit will power the next big run for gold.