Drought: Real Crisis Or An Excuse For Government Intrusion ?

Is there really a water crisis?  It’s a little disconcerting, to be honest. On TV, you see pictures of farmers with crops that won’t grow because they haven’t been planted. Livestock are slaughtered for lack of feed. You would think sooner or later this decline in farm productivity would show up in higher food prices, and not just in lower profits on food exports. Is there a major food crisis brewing outside Australia’s major cities as a consequence of the drought?

This is one of those known unknowns Donald Rumsfeld made famous a few years ago. Walk into any servo or grocery store and you see plenty of water on the shelves for sale. Walk in your kitchen and turn the tap and out it comes. Same with the showers and toilets.

We don’t doubt that the drought has hit farmers the hardest. What we wonder is why it hasn’t really affected anyone else yet? Are we too complacent? How can you really be worried about a drought when there’s water everywhere around you, for sale, for bathing, and for flushing? Is there really a drought? Or has the drought, like terrorism and global warming, become another excuse for more government intrusion on private and public behaviour? Hmm. Tell us what you think at dr@marketsandmoney.com.au.

We will be speaking next week, and using first person pronouns, at the Educated Investor Shop in Melbourne at 500 Collins Street. The gig begins at 5:30 next Tuesday, and we are apparently co-presenting with our sometimes breakfast companion Scott Pape, otherwise known as the Barefoot Investor. Scott is actually Australian and writes about the every-day financial problems of real Australians, whereas we are an interloping American projecting our financial insights on to the Australian market. It should be a lively evening. We’ll specifically look at what we got right in our 2004 book, The Bull Hunter, what we got less right, and what has changed since then in our investment outlook and strategy. Be sure to stop by if you’re in the neighborhood. We’ll probably stick around afterwards for a coffee as well.

Dan Denning
Markets and Money

Dan Denning
Dan Denning examines the geopolitical and economic events that can affect your investments domestically. He raises the questions you need to answer, in order to survive financially in these turbulent times.

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