SHRINKAGE ! - At December Rate, World Economy will be 0.1% of Current Size in 1 Year

[gunDriller]

The Mayan prediction of Dec. 21, 2012 Dooom may have been off, in the Earthquake/ Asteroid/ Volcano Cataclysm Category.

In about 12 hours, we'll know for sure, when the International Date Line somewhere between Hawaii & Australia turns over, and it's December 22 (or 23) everywhere on Earth, and we all survived (except for the Palestinians ... separate story.)


BUT - the Mayans were COMPLETELY on the money when it comes to the state of the USSA & world economy.

They were as Prescient as Silver Art & his $50/$26 predictions.


What I am talking about is - the Collapse of World Shipping, as measured by the Baltic Dry Index.


Short version:

WORLD TRADE ==> is falling off a cliff.

Baltic Dry Index is down 34% in the month of December 2012 alone.

http://www.bloomberg.com/quote/BDIY:IND


Screen Capture of the Bloomberg Baltic Dry Index Page -

http://s403998394.onlinehome.us/BDI__.jpg


Baltic Dry Index, 5 Year Plot, showing the collapse from the Peak of about 10,000 in May 2008, to about 800 in March 2009.

It never really recovered. It has stumbled along, reaching a low of 647 in February 2012. Climbed back up to 1077 on December 3, 2012.

And has since fallen 34% in the last 18 days.

http://s403998394.onlinehome.us/BDI_3_b2.jpg


World Trade falling by 1/3+ in the space of less than 3 weeks is no minor deal.


Admittedly, BDI measures World Shipping Revenues. It is not a measure of tonnage or shipping containers. When the shippers have spare capacity, they drop their prices.

The shippers have a lot spare capacity.


Were the present rate of decrease to continue for 17 more 3 week periods, world shipping will be .000856 of what it is now, in 51 weeks.


The math: .66 ^ 17.


Short Version ... AT THE PRESENT RATE OF DECREASE, WORLD TRADE WILL BE less than .001 OF WHAT IT IS TODAY - IN ONE YEAR.



GEOPOLITICAL IMPLICATIONS.

Let us not forget that nations like the US have a LOOONG history of starting wars to mask economic woes.


World trade falling off a cliff ?! Oh, no, that won't increase the chances of WW3 (already started) ratcheting up at all /sarc

[Santa]

Ok, now this is some scary shit. :O

[Son-of-Liberty]

Not that it means nothing but the article is a little alarmist.

The article itself states that the baltic dry index measures profits not the amount of stuff being shipped but then extrapolates that into the overall economy. Pretty clear they are making a calculation with a desired outcome in mind.

Were still fooked but probably not as fast as the article would lead us to believe.

[Neuro]

I guess one could always extrapolate the periods of fastest decline to continue, but really it doesn't happen like that, I would bet if you look at December month Dry shipping rate over several years you'ld almost always see a decline, the reason being that January-March are slow months in terms of retail sales... Of course it is alarming by itself that BDI is at a historic low point, as a barometer of world trade, but extrapolating the decline for 17 times the current last three weeks decline is pointless. We could do that for the price of silver as well. I think without looking at the actual numbers that it has dropped about 10% in the last 2 weeks. So a year from now, we will have a silver price of 30x0.9^26=$1.94/ounce, but you'll still be very rich if you have silver because you'll be able to buy a 500,000 ton transpacific cargo shipment with an ounce of silver...

[gunDriller]

I guess one could always extrapolate the periods of fastest decline to continue, but really it doesn't happen like that, I would bet if you look at December month Dry shipping rate over several years you'ld almost always see a decline, the reason being that January-March are slow months in terms of retail sales... Of course it is alarming by itself that BDI is at a historic low point, as a barometer of world trade

Good points.

Just like Silver's typical "end-of-the-year" 'consolidation' - whatever they call it.


Except - the 2012 low came in - February.

Dec. 23, 2011 - 1738
Feb 3, 2012 - 647

A decline of 63%. Numbers from the '1 Year' version of the chart.

If that trend (spanning end of year 2011 into early 2012) continues (spanning end of year 2012 into early 2013), it would take BDI down to 263.

Also, BDI measures shipping revenues, not profits, though obviously they're correlated.


It makes me wonder if the Plunge Protection Team, that manipulates the Dow, will start manipulating the BDI. They could always just give them money to ship empty containers around the world.

That sounds like something out of Doctor Seuss :) But then, the PPT sounds like something out of Orwell or Huxley.

Or they could say, "well, iPads just don't take up as much room as Walkmans". I guess it depends a lot on the packaging - and where it is put into the Pretty Apple Box. do we still make Pretty Apple Box'es in this country ?



The decline in the BDI stopped about the time they announced QE1 - March 18, 2009.

QE2, October-November 2010 ... QE3, September 13, 2012 ... QE4, December 12, 2012.

It makes me wonder if QE has lost its ability to stimulate world shipping. BDI is about where it was when QE started, possibly lower. (BDI { Dec. 21, 2012 } = 708, BDI { March 18 2009 } Approx = 800.

They print how many $Trillion - and the net effect on World Trade is flat.


From a prepper point of view, I'm thinking this might be a good time to buy a shipping container.

As far as shipping data, I want more - it's hard to find. I would like to find something like they have for the Dow -
http://finance.yahoo.com/echarts?s=^DJI+Interactive#symbol=^dji;range=19941 018,20121221;compare=;indicator=volume;charttype=a rea;crosshair=on;ohlcvalues=0;logscale=off;source= undefined;


References -

* QE Dates, there's an error in the Table. The text says March 18, 2009, the Table lists March 18, 2008.
http://en.wikipedia.org/wiki/History_of_Federal_Open_Market_Committee_actions

* Some Shipping Stats for 2009 & 2010 @
http://www.worldshipping.org/about-the-industry/global-trade/trade-statistics

* TEU = "Twenty-foot equivalent unit"

* Total World TEU's in 2009, 99.8 Million.
Total World TEU's in 2010, 114.3 Million.

[Neuro]

I think the Fed as they announced the QE 4, which probably is more like the QE8, if you count the central bank swaps (2), the buying of treasuries from the fed controlled pirates of the carribean, and the interest free loans with no payback on the horizon to the Fed owning banks, this time actually decided to withdraw liquidity from the market short term, thus the plunging markets...

Nowadays the entire market is totally rigged by the central banks, they can announce the biggest monetization program ever and at the same time plunge the markets in the commodities that traditionally would appear to gain from such a maneuver...

They just did! However I do think they will get burned, the oscillations they create with this artificial rigging, will come back and bite Bernankes arrogant ass, as they get out of controll.

[Horn]

I think it was Max Keiser who stated that Denmark is making up the difference by creating welfare slum residences

out of the shipping containers.

http://www.homemagz.com/wp-content/uploads/2010/11/6c0cbaddfa9896020a077fbdf725a678.jpeg

[Neuro]

I think it was Max Keiser who stated that Denmark is making up the difference by creating welfare slum residences

out of the shipping containers.

http://www.homemagz.com/wp-content/uploads/2010/11/6c0cbaddfa9896020a077fbdf725a678.jpeg
They can fill up the containers with third world slum dwellers, when they send them to Denmark!

[gunDriller]

I think the Fed as they announced the QE 4, which probably is more like the QE8, if you count the central bank swaps (2), the buying of treasuries from the fed controlled pirates of the carribean, and the interest free loans with no payback on the horizon to the Fed owning banks, this time actually decided to withdraw liquidity from the market short term, thus the plunging markets...

Nowadays the entire market is totally rigged by the central banks, they can announce the biggest monetization program ever and at the same time plunge the markets in the commodities that traditionally would appear to gain from such a maneuver...

They just did! However I do think they will get burned, the oscillations they create with this artificial rigging, will come back and bite Bernankes arrogant ass, as they get out of controll.


It reminds me of the classic physics unstable equilibrium, of which this nine nails balancing is one example.

http://www.hmc.edu/academicsclinicresearch/academicdepartments/physics/kiosk1/demos1/mechanics1/statics1/Nine%20Nails%20on%20One1J20-25.jpg

However, there is no sleight-of-hand in the 9 balancing nails physics example, of the unstable equilibrium.


It is almost like contemplating quantum physics, that complicated.

The world economy & the US economy appear to be in equilibrium. However, the US economy has been collapsing at the rate of at least 8% a year since about September 18, 2008, which is when it became very obvious that the game of Pick-up-Sticks was 'having problems'.

( based on at least 10% annual inflation and 2% GNP growth ).

That means the US economy has contracted at least 32 % since September 2008.


However, there are still pockets of (cancerous) growth. The DC real estate market is red-hot.


It is tempting to talk about "the arrogance of the banksters, thinking that they can get away with it".

However, they obviously are aware that the natives are getting restless. The 'natives' (mostly Gentiles) have varyng degrees of awareness of the Big Scam.

I would say that the passage of 'laws' like the NDAA are signs that the Criminal US Government & their Criminal Business Buddies know that they won't get away with it forever.