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About 70% of the world’s surface is covered with water. Only 2.5% is fresh water and suitable for human consumption.

By 2050, two thirds of the world’s population will be affected by water scarcity.

Last year, Wall Street recognized this trend from commodifying water on the Chicago Mercantile Exchange (CME). Now, more than 100 organizations have asked the Commodity Futures Trading Commission (CFTC) to shut down the water trade.

National Advocacy Organization Look at food and water and 138 other organizations wrote a letter to the CFTC on December 20, asking CME to stop all trading of the Nasdaq Veles California Water Index Futures, the world’s first water rights-based water futures contracts in California severely affected by drought.

“Futures trading on the water index is contrary to the public interest as it involves trading in an essential resource”, ha scritto Food & Water Watch.

The letter argued that water is essential for life and not a good. He said the contracts undermine California state law and the “advantageous use” doctrine that prohibits the use of rights for speculative trade.

Zach Corrigan, senior attorney at Food & Water Watch, said, “The commission should reject this shoehorn attempt to drive investor profit under a federal law that should never be applied to a state-run common public resource for public welfare “.

Since the water contracts began last December, market participants have traded approximately $ 1.1 billion of spot water, each contract equivalent to 10 acre-feet of water.

The letter also warns that large institutional companies could grab the market and implement strategies to accumulate water, thereby increasing water prices that would be devastating for families and farmers in the field.

“Free market advocates argue that markets create efficiency, but the result is usually dystopian and terrifying,” said John Aspray, an organizer of Food & Water Watch.

Therefore, the commodification of water seems like a good idea as it could benefit companies that need to cover their bets. Still, the the futures market is open to manipulation by the big banks, as we all know in the precious metal space.

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