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Long time readers know I use the Baltic Dry Index of dry goods shipping rates as a barometer to gauge global economies because it is an excellent leading indicator.
The chart below shows the current rates in black and other years in different colors. The current rate has dropped below 1,000 making it the lowest December since the so-called Great Recession began in 2008.
By the way, the over-supply of ships is now 5 year-old news so the shipping industry has had enough time to clear the surplus. In other words, we can no longer blame “too many ships” for low shipping rates. This is falling demand.
What we’re seeing is a collapse in commodity demand (and prices) and a massive slowdown in China along with the rest of the world which never really recovered from the Great Recession.
If you think we’re in a recovery, I want to know what you’re smoking and why you’re not sharing.
December 9, 2014
Credit for the chart – Zero Hedge
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