A good friend from the hedge fund community and one of the best economists to have ever worked in the financial markets, and who also happens to be from Peru sent over a piece on the Andean glacier melt from the Washington Post. He’s a very smart guy and when he gets lathered up on an issue we listen.

Peru is home to 70 percent of the world’s tropical glaciers and world’s largest tropical ice mass, which are vital to the Andean region’s electricity production, drinking water, and irrigation. The glaciers are melting much faster than scientists had predicted and some now estimate that entire glaciers across the Andes will disappear in 10 years due to rising global temperatures.

You think Egypt and North Africa are unstable? Imagine the economic and social devastation ergo political instability that will take place in the region over the next decade if these guys are right and nothing is done.

The Washington Post writes,

More than 2 million people, stretching from the Andes to the coastal cities, get their drinking water and irrigation from rivers fed by glacier runoff from Cordillera Blanca. But research by Cesar Portocarrero, the Peruvian government’s lead glacier scientist, shows the Cordillera Blanca has lost 30 percent of its glaciers since 1970.

Most of Peru’s agriculture is fed by water from the Andes. Glacier-fed rivers also support the nation’s largest hydroelectric plants. Lima, the world’s second-largest desert city, is almost totally dependent on Andean rivers from the Cordillera Central, where some mountains have lost more than 60 percent of their glaciers in the last 40 years.

Water conflicts have been frequent in southern Peru over the last few years, and glacier melt will create even more across the country, and, in extreme cases, spreading to neighboring countries, said retired Maj. Gen. Luis Palomino Rodriguez, head of Peru’s National Civil Defense Institute, in an interview.

The Pentagon is starting to address the impacts of climate change. It gave the Southern Command, in charge of Latin America, $600,000 to develop a mapping tool that will allow Latin America and the United States to share information about climate change risks. It is also spending $1.4 million to study the climate change effects on foreign military bases.

By the way, a new study has found that 65 percent of the Himalayan glaciers, which feed 10 rivers that provide water to 20 percent of the world’s population, are also melting at an alarming rate. We’ve seen the damage the housing bubble deniers have done. The fallout from the climate change deniers, who raise just enough doubt and uncertainty to justify not acting and/or to paralyze the political process, could destroy civilizations. No wonder capital is flowing into liquid assets.

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