I remember the slowing of shipping prior to the onset of the “Great Recession” and the subsequent decline after that. It was a canary which sung right before the economic gas hit. The BDI is at 10 year lows right now.
How do we measure shipping flows? One way is with the Baltic Dry Index which measures the cost of overseas transport via oceangoing dry bulk shipping vessels. All that stuff in your house came from somewhere, and most of it came on the massive freighters the BDI tracks. When BDI prices are low that is indicative of a slow world economy. In this case it is indicative – probably – of the slowdown which continues to grind along in China, the Ultimate Crony Capitalist State.
The continued collapse of The Baltic Dry Index remains ignored by most – besides we still have Netflix, right? But, as Dollar Vigilante’s Jeff Berwick details, it appears the worldwide ‘real’ economy has ground to a halt!!
Last week, I received news from a contact who is friends with one of the biggest billionaire shipping families in the world. He told me they had no ships at sea right now, because operating them meant running at a loss.
This weekend, reports are circulating saying much the same thing: The North Atlantic has little or no cargo ships traveling in its waters. Instead, they are anchored. Unmoving. Empty.