Gas Price Increases, Water & Food Supply

The Economy–Gas Price Increases, Water & Food Supply.

Gas Price Increases: CNNMoney.com posted this Ben Rooney article today: “Gas prices menace battered economy”. The article speaks to increased gas prices in an economic downturn. Here are some of the key points:

• “The national average is up 28% over the last month and a half, straining wallets and threatening the economic recovery.”
• “Retail gas prices have risen daily since April 29, and are nearly $1 higher than the beginning of 2009. According to AAA, The national average now stands at $2.632 a gallon.”
• “As gas prices rise, analysts warn that consumers will be forced to cut back on spending in other areas. That could make it harder for the economy to recover because consumer spending  makes up the bulk of U.S. gross domestic product.” (about 70% of US GDP/PH)

Water & Food Supply: “California’s Water Woes Threaten the Entire Country’s Food Supply” is the title of the alternet.org’s June 9, 2009 piece by Scott Trill. In this work we learn of California’s significance to U.S. food supply and water’s role in California’s food production. Here are some excerpts:

• “Nearly a third of the country’s food supply comes from California, but drought there may be a catastrophe for farmers — and the rest of us.”
• Our current secretary of energy, Dr. Stephen Chu, Ph.D.: “I don’t think the American public has gripped in its gut what could happen. We’re looking at a scenario where there’s no more agriculture in California. I don’t actually see how they can keep their cities going,” Steven Chu told the Los Angeles Times in February, shortly after taking office in January. “I’m hoping the American public will wake up.” he added.
• “…some not-so-fun facts: California’s agricultural sector grows approximately one-third of the nations food supply and is nourished by diverted rivers and streams filled yearly by runoff from it’s prodigious sierra Nevada snow pack, as well as ground water pumping and other less reliable methods.”
• A three year drought has, “…California’s central valley, home to a majority of the state’s agricultural output, farmers … leaving hundreds of thousands of acres fallow…”

Later this week, PrudentHome plans to discuss WHY investors are now looking at farmland as the investment of/for the future and why it’s important to the prudent home. Until then, keep your eyes on the horizon as the weathers changing fast.