Before this year the lowest level The Baltic Dry Index had reached was 556 in August of 1986 and the highest was in June 2008 at a stunning 11,612. Today saw the freight index hit a new milestone however, crashing through the 300 barrier for the first time ever - at 298, this is almost 50% below the previous record low.
However, the depths that the index is now plumbing is quite alarming and suggests trouble in the global trade picture.
It would also suggest perhaps that the deflationary pressure is not just a supply issue. Consider every prior drop in the Baltic Dry Index down to the 500-600 level. Each time, the index immediately jumped as if latent demand was just waiting for those lower prices. That development has not yet occurred this time around, even as prices are reaching 45% below the previous record low.
The Baltic Dry Index has become a trendy thing to mention in recent years when discussing global market and economic conditions. The truth is, nobody really ever knows for sure what the broader message is behind the index’s behavior. That said, this recent plunge is making it quite difficult to conceive that it means anything positive in terms of the global economy and deflationary pressures.
Years ago the decision makers moved us to more and more dependence on foreign foods...Olives, Olive oil, beans, hard goods, its endless, even garlic.....and Gilroy Ca is/was the garlic capital of the world..We are dependent on goods delivered via the waterways
Now lets factor in the massive closings of stores, Walmarts, Macy's, etc etc, 1000's of them....This makes sense because there is less product. We are dependent on foods and hard goods delivered via the waterways and they are not coming in..
Now where does this leave us......DO THE MATH FOLKS......Think.....Our courts are full of lawsuits against them for fraud, fraud that they are guilty of. They cannot and will not allow these to go through. Unemployment is over 23% and rising..
- Less food
- Less money
- Less jobs