Reading time: 335 words, 1 ½ pages, 1 to 2 minutes.
The Baltic Dry Index (BDI) has crashed for the last 13 days forecasting a major global economic downturn. Being a long-time logistics specialist, I have a special fondness for the BDI. Although money may be the life-blood of commerce, logistics feeds the world.
The Baltic Dry does not measure global shipping costs of finished goods on container ships. Instead, it measures shipping costs of raw materials that are the precursors to production like grain, cement, coal, iron, etc. As such it is an accurate barometer of global production and growth.
That makes it a reliable leading economic indicator. Because it changes before economies change, it predicts the direction and performance of economies. Unlike other leading economic indicators such as employment rates and Consumer Price Index (measures inflation), the BDI is unmarred by government statistical manipulation. And, unlike bonds or the stock markets, the BDI is devoid of speculative content. That’s why it’s the world’s most reliable leading economic indicators.
Yesterday, Zero Hedge’s Tyler Durden headlined it as, “Baltic Dry Collapses To Worst Start To A Year On Record” when the index plunged to 1061. Today it sank to 1029. See the chart below.
The BDI’s and the global economy’s trend is down as you can see from the chart above.
On January 30, I posted a “Collapse Forecast 2014”. On March 19, I warned about “China’s Collapsing Economy” and on March 23, I also warned about “Canada’s Next Great Recession”. And, on April 6, I wrote that “Demography + Debt = Doom”.
I take no pleasure in being right. Since 2007, I’ve been warning about global “Economic Collapse”.
Govern yourself accordingly.
April 10, 2014
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