How Bad Will the Coming Economic Collapse Get?

Unfortunately, we cannot rely on the TV or even the Government to give us the real deal on what is happening in the economy.

I subscribe to feeds from economic gurus in the US and elsewhere with no interest in "Happy Talk" on the economy becuase their customers (including me) are paying them for the real scoop. Here is a blurb from one of their reports:

The Collapse of the
Global Cargo Trade

The Baltic Dry Index sounds like a weather report, but what it really does is track the price of shipping bulk cargo — such as coal, iron ore, cotton and grain. And recently, the Baltic Dry Index has fallen through the floor.
In real dollar terms, at the peak of the market, a 170,000-tonne Capesize bulk carrier cost $234,000 to rent. Recently, it was $5,600 — that's a crash of over 90%.
Why is this happening?
Two reasons ...

The falling demand for products like cars. Auto sales are falling in the U.S., Germany, France, Japan and more. The pace of car sales growth is also slowing down in China.


International shipping works on "letter of credit." These financial guarantees are issued to buyers of bulk cargo by their banks. This system has greased the wheels of global trade for the last 400 years. With the collapse of the credit market — and banks now sitting on their hands, refusing to lend — the wheels of global shipping are grinding to a halt.

How bad is this?

Peter Kerr-Dineen, chairman of Howe Robinson shipbrokers, didn't mince words when he described the crisis to the British press:
"This is a nuclear bomb in the freight market and in world trade. Liquidity has to return because if there is insufficient money to provide standard finance, world trade will be sharply cut back and economic growth will implode."

Sounds serious to me!