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Global Water Investments

Harnessing a Global Commodity Takeover

Written by Nick Hodge
Posted December 22, 2009

A hostile commodity takeover is slowly gripping the world.

It began in Africa, but has quickly spread to Asia, Australia, Europe, and even the United States.

But it's not a precious metal or oil I'm talking about... it's water.

And across the globe, it's increasingly being privatized and sold for profit.

Water's Hostile Takeover

This takeover started in rural Africa, where organizations like the World Bank and the International Monetary Fund offered "loans" to Third World countries to upgrade their water infrastructure.

But the "loans" came with stipulations, namely that citizens had to give up private use of water resources and instead pay a company for access to it.

This has been going on for years — largely unchecked — in countries from South Africa to Egypt.

Only now, as the takeover spreads to more wealthy nations, is the situation being exposed. And with the global water supply — and trillions of dollars in revenue — at stake, you can bet there are also some looming investment implications.

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A Case Study

It may sound preposterous to claim that global water resources are being seized and privatized.

But it's not.

In Hungary, which boasts higher per capita income than Poland and Russia, a water takeover is in full swing.

There, the city of Pecs recently held a general meeting to "remove the management of the local water utility."

In this case, the local utility is Suez Environment, which has also taken over the water infrastructure in many African nations.

According to the town's mayor, the decision to hold the meeting was based on "strong suspicion of instances of fraud."

Through a "takeover" deal in 1995, Suez got its hands on a 48% stake in Pecs water business, and has since tried to tighten its hold through various dubious measures.

Suez has said it'll take legal action against Pecs if they continue efforts to kick them out.

Like I said, a global water taking is in full swing.

Spreading Elsewhere

Even in the United States, some residents have been forced to sue large companies as their access to freshwater is threatened.

States have even sued each other — the most recent example is Georgia vs. Tennessee — as local supplies dwindle and uncertainty takes hold.

The resource has grown so scarce, and so valuable, that Fortune Magazine recently claimed, "Water promises to be to the 21st century what oil was to the 20th century: the precious commodity that determines the wealth of nations."

And nations are scrambling to secure that wealth as its source enters a state of perpetual decline worldwide.

Third World countries, as I described, are turning to shady loans from global aide organizations.

Developed nations are hurriedly spending billions to secure their water infrastructure. The U.S. committed about $6 billion to this cause in the recent stimulus.

But no matter the strategy countries take, one constant remains: smart investors stand to make a killing.

Whether by investing in the large utility conglomerates cornering freshwater supplies in Africa and Asia; or by investing in specialized technologies like desalination, pumps, and purification in developed countries... investors that take action now will be poised to capitalize on a decades-long profit run.

And using water as an investment catalyst couldn't be safer. In fact, the Wall Street Journal reports that "It's not going to fluctuate the way other commodities do, because we're a species running out of clean water."

In order to stay ahead of this investment curve, I've prepared a detailed report that explains the ins and outs of the industry.

Which countries are most at risk? How are governments responding? Which companies stand to benefit? And how can investors leverage the situation for the most gain?

You'll find all the answers in this report.

Have a great holiday,

Nick Hodge

Nick

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