This article was written by Michael Snyder and originally published at his Economic Collapse blog.
Editor’s Comment: By all accounts, things are grinding to a halt and reaching the point of unavoidable crisis. Nothing short of all out world war may be able to hold it together at this point in the game. More than likely, this will get much worse before it gets any better.
Unfortunately, the economics just don’t add up. Even the rigged stock market has been abused by the plunge protection team for too long to keep the bubble from popping. No one knows the time, but the fundamentals are busted perhaps beyond all repair.
The Baltic Dry Shipping Index Just Collapsed To An All-Time Record Low
by Michael Snyder
I was absolutely stunned to learn that the Baltic Dry Shipping Index had plummeted to a new all-time record low of 504 at one point on Thursday. I have written a number of articles lately about the dramatic slowdown in global trade, but I didn’t realize that things had gotten quite this bad already. Not even during the darkest moments of the last financial crisis did the Baltic Dry Shipping Index drop this low. Something doesn’t seem to be adding up, because the mainstream media keeps telling us that the global economy is doing just fine. In fact, the Federal Reserve is so confident in our “economic recovery” that they are getting ready to raise interest rates. Of course the truth is that there is no “economic recovery” on the horizon. In fact, as I wrote about yesterday, there are signs all around us that are indicating that we are heading directly into another major economic crisis. This staggering decline of the Baltic Dry Shipping Index is just another confirmation of what is directly ahead of us.
Overall, the Baltic Dry Index is down more than 60 percent over the past 12 months. Global demand for shipping is absolutely collapsing, and yet very few “experts” seem alarmed by this. If you are not familiar with the Baltic Dry Shipping Index, the following is a pretty good definition from Investopedia…
A shipping and trade index created by the London-based Baltic Exchange that measures changes in the cost to transport raw materials such as metals, grains and fossil fuels by sea. The Baltic Exchange directly contacts shipping brokers to assess price levels for a given route, product to transport and time to delivery (speed).
The Baltic Dry Index is a composite of three sub-indexes that measure different sizes of dry bulk carriers (merchant ships) – Capesize, Supramax and Panamax. Multiple geographic routes are evaluated for each index to give depth to the index’s composite measurement.
It is also known as the “Dry Bulk Index”.
Much of the decline of the Baltic Dry Shipping Index is being blamed on China. The following comes from a Bloomberg report that was posted on Thursday…
The cost of shipping commodities fell to a record, amid signs that Chinese demand growth for iron ore and coal is slowing, hurting the industry’s biggest source of cargoes.
The Baltic Dry Index, a measure of shipping rates for everything from coal to ore to grains, fell to 504 points on Thursday, the lowest data from the London-based Baltic Exchange going back to 1985. Among the causes of shipowners’ pain is slowing economic growth in China, which is translating into weakening demand for imported iron ore that’s used to make the steel.
So many of the exact same patterns that we witnessed back in 2008 are playing out once again in front of our very eyes. Below, I have shared a chart that was posted by Zero Hedge, and it shows how the Baltic Dry Shipping Index absolutely collapsed in 2008 as we headed into a major financial crisis. Well, now the Index is collapsing again, and it is already lower than it was at any point back in 2008…
The evidence continues to mount that we are steamrolling toward a deflationary economic slowdown that is worldwide in scope.
Just look at the price of U.S. oil. It just keeps on falling, and as I write this article it is sitting at $40.40.
The price of oil collapsed just before the financial crisis of 2008, and the same pattern is happening again.
And look at what is happening to commodities. The Thomson Reuters/CoreCommodity CRB Commodity Index has plummeted to the lowest level that we have seen since the last recession. It is now down more than 30 percent over the past 12 months, and it continues to fall.
So don’t be fooled by the temporary “stock market recovery” that we have witnessed. The underlying economic fundamentals continue to decline. We are entering a global deflationary recession, and the stock market will get the memo at some point just like we saw in 2008.
At this moment, global financial markets are teetering on the brink, and all it is going to take is some kind of major trigger event to send them tumbling over the edge.
And such an event may be coming sooner than you may think.
We live at a time when global terrorism is surging, relationships between nations are deteriorating and our planet is shaking in wild and unpredictable ways.
It wouldn’t take much to push the financial world into full-blown panic mode. A major regional war in the Middle East, a terror attack that kills thousands, or an earthquake or volcanic eruption that affects a large U.S. city are all potential examples of “black swan events” which could fit the bill.
The global financial system has never been more primed for another 2008-style crisis. Thanks to the fragility of the system, it could literally happen any day now.
So keep your eyes open – within weeks our world could be completely and totally different.
Michael T. Snyder is a graduate of the University of Florida law school and he worked as an attorney in the heart of Washington D.C. for a number of years.
Today, Michael is best known for his work as the publisher of The Economic Collapse Blog and The American Dream.
If you want to know what things in America are going to look like in a few years read his new book The Beginning of the End.
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“I was absolutely stunned to learn that the Baltic Dry Shipping Index had plummeted to a new all-time record low of 504 at one point on Thursday. I have written a number of articles lately about the dramatic slowdown in global trade, but I didn’t realize that things had gotten quite this bad already.”~Michael Snyder
Seriously? This guy writes Economic Articles every single day, and he had no clue that the BDI was in bad shape?
Just one reason for a person not to read anything from Michael Snyder – absolutely ridiculous & unprofessional on his part — pffttt!
FTW –
I stopped reading at “I was absolutely stunned ” .
Was gonna post the same comment.
He has been spewing the stuff for years,
There should be no surprise .
WHAT! But I’m still waiting for those major earthquakes that are coming along the ring of fire to swallow us all up! And what about those nuclear tsunami torpedoes the Russians are going to get us with? But don’t worry mikey boy, I’ll be sending you a check today because doom porn can’t run on an empty stomach.
“The evidence continues to mount that we are steamrolling toward a deflationary economic slowdown that is worldwide in scope.”
Someone here said back in 2012 that the SWHTF in 2015 and that the next crash will be deflationary in character while everyone was screaming: “HYPERINFLATION”. Who was that masked man ??? Its in the archives.
BTW, BGD: I would not be surprised to see the BIG ONE in Kalifornia this May. Its waaaaayyyy overdue. 🙁
I have been saying since 2011 that what happened in 2008 was not a crash but a global economic collapse. The Federal Reserve along with George W Bush at the behest of Hank Paulson and Ben Bernanke decided to step in and save the 5 largest Banks from default. If TPTB had not stepped in, it would have become a complete global economic meltdown that would have made the Great Depression look like an economic blip. The reason we are seeing so many negative numbers is because we entered a global economic Depression after the temporary economic collapse. We are still in a Depression today.
None of this should surprise anyone and we will all face a global economic meltdown far greater than what would have happened in 2008 if we had allowed economic Mother Nature to take its course back then.
Well Durango, yes it is overdue, and been that way for a while now. No doubt there’s a lot of pressure building between the plates for a long time, and when it goes, it will be a big one. But we’ve known this for years too, and come to accept that it’s part of the planets dynamic and there’s nothing to be done to stop it from happening, just like Yellowstone, it’s overdue to blow too and when that happens, well, it will be a whole new ballgame. Now, that said, we don’t continually bang the doom bell about it over and over and mix in multiple other scenarios about how we’ll all die ” shortly”, as some particular bloggers are so fond of saying while at the same time trying to rake in as much cash as possible off peoples fears, it’s bloggers like this that I enjoy making fun of.
You’ve painted up your lips and washed and dried your store bought hair
Ruby, I didn’t know you had a bald spot under there!
Thanks Michael for your latest info. You do know your stuff when it comes to all the factors that make up the grim Economic picture, which will eventually implode.
The false positives that is seen in the Dow and other NY Stock xchange funds, is all due to the loss of security in other World Markets. They are running to Wall Street as what they see as a “Safe Haven”.
But, what happens when the bubble bursts? Bye, Bye, retirement funds and security blankets. Hopefully most will be able to get into less long term paper, and keep some control in their own hands. It is still very risky at this point in time.
btw, for people that only know Michael by his blog site or articles here, he is a Jesus Christ believing Christian. Not the anti-Jesus -ew that some make him out to be.
‘Passin – who are these people you speak of? I haven’t come across any post from here that states Snyder as some kind of anti-jesus jew.
Personally, I could care less about ones beliefs – unless their belief system directly interferes with my life.
Now, my curiosity got the better of me, so I checked out Michael’s “Christian Blog”.
Some of his personal views … which I find a bit silly, but to each their own I guess.
“Christians can drink, but if they feel any effects of alcohol it’s a sin.”
“We are all lawbreakers of God’s will. Including loving anything more than God at any time, doing anything on the sabbath, not honoring your mother/father completely, ever hating or holding anger towards anything/anyone, or lusting after a women (even thinking, including your own wife).”[12]
“Anyone who hasn’t accepted the word of God like Snyder has is equivalent to rapists, murderers, and child molesters.[13]
“Divorce is only acceptable if there is adultery or if one’s spouse is not Christian. This does not include abuse. Snyder states that this is “because God knows best.”[14]
“Snyder is against homosexuality, and all sex outside of marriage. He does state first and foremost one thing that stands him out from the pack of fundamentalists, in that people should still love gays like every other one of God’s creations.[15] So, y’know, at least there’s that.”
After reading those tidbits, I realized that this man is not exactly sane and thoughts like that – is noway shape or form for a person to go through life and expecting complete happiness.
Interpreting the Bible in one persons view is hazardous to other Christians. People like that are exploiting Religion to benefit their own pocket book and nothing else.
And you are Mr. Perfect?
No one says Snyder has spoken for everyone, nor have i ever insinuated that I speak for everyone.
You, like some of the people on this site are nothing more than pedestal pokers. You poke ridicule at people whom make an attempt to explain biblical truths, and criticize them to make yourself feel like you are the ones with all the correct answers.
Not to mention, your types have argumentative spirits and use it to pick fights and start shit. JQP is another fine example.
He lingers around spewing his anti-ew rhetoric and you are one of his followers. You can love a queer all you want to , but it changes nothing. You think loving a faggot like sick AE is gonna change him, or somehow put a feather in your cap with God?
You freaks keep believing that shit, and I don’t care that my comments and commentaries make you feel uncomfortable enough to make you respond and think. What you really need is a spiritual gourd thumping and from all i gather…you and JQP have got a few good licks coming.
From now on, just remember, you ain’t gonna get away with spewing your yankee bullshit towards me without a slinging back. We have been through this before and you shit in your living room by saying you would “hang Christ right back on that cross, if he comes back”.
You are a fake, just like your buddy JQP, so you bitches need to go off and hug ole AE’s ass and leave the rest of us alone.
You got that?
Damn ‘Passin – calm down and relax, you’re taking this all a bit too serious and out of proportion.
Not too serious…since i am responding to the likes of you and JQP../ not to mention the village idiot fag, AE.
I have been doing the same thing here for many many years and my time has come to move on, much to the joy of many folks here.
I was gone a few months ago, to strike out on another endeavor, but was drawn back for what I see now as “closing arguments”.
You pukes can have at it. it was a decent ride for six or so years, and maybe the info i posted helped those that wanted and needed it. God has bigger and better things in store for me ahead.
‘Passin – you don’t need to leave this forum, nobody is attempting to push you away from here. As is, I did not attack your belief, God, or Christianity in general.
Only thing negative was pertaining to Snyder’s “VIEW(s)”.
If you want to take that, and make it a personal attack against you – then I’m not sure what else to say because that was not my intention to do so.
I wish I could respond more to you in a lengthy post, but it’s Saturday and I have a very busy schedule ahead of me.
*First of all, I have to pick up my SS Nazi Uniform from the Dry Cleaners.
Then I’m attending a “White Lives ONLY Matter” meeting to discuss how to take over the “black lives matter” group and how to dispose of a white liberal sympathizers bodies properly and blame it on Obama’s ISIS & Pals.
All of this should take me up until about 4:30pm
Then I have to rush back over to the Dry Cleaners, because my fitted White Hooded Sheet should be ready for tonight’s festivities.
Gonna, terrorize all of the crime ridden, drug infested ghettos. Not sure if we are going to string up a couple of fellows or just do some old fashion curb stopping, hell maybe both.
The Grand Finale of the evening – Terrorizing every Mosque and Synagogue in my area in the form of spray painting swastikas and cross burnings, and we’ll put the blame on Russia for doing this because they hate us for our freedoms and shit like that.
Then I’ll suppose we’ll call it a night and do it all over again until next weekend arrives and so forth.*
[we live in a twisted and sick world ‘Passin. Sometimes you just have to smile and laugh it away.]
(section in this post with “*” is purely fictional with a side of sarcasm)
Oh, for Christ sake, goodbye already and spare us the Hamlet routine.
Lemmings,
If not the best post ever, definitely in the top TWO!
I was watching the stock ticker as the terror attack at the Raddison Hotel in Mali Africa was unfolding. The stock market just kept rising. Even airline stocks were going up. Terror attacks like this will crush global tourism, so why would airline stocks rise?
The stock market is totally disconnected from reality.
The Baltic dry goods is a great indicator because it is not tampered with. At this point virtually all economic numbers from the government are just flat out manufactured lies.
Russian cruise missiles hits ISIS from Mediterranean & Caspian; 600 killed in one strike
ISIS Personal at 1600 Pennsylvania ave, Washington D.C.
Bombing Run Coordinate [38.9047° N, 77.0164° W]
Fire at will ツ
YES!! ..oops, I’m sorry. Didn’t really mean that. 🙂
“No one should be ashamed to admit they are wrong, which is but saying, in other words, that they are wiser today than they were yesterday.”
― Alexander Pope
Another Snyder article? YAWWWWWWWWWWWWWWWWWWWWWWWWWWN!
Better a year too early than a day too late.
Ask those who lost everything in the 1929 crash.
Better adage: “even a stopped clock is correct twice a day”.
Snyder has been shotgunning for years hoping to hit something. People are finally waking up to it.
Who knew the Fed and Treasury Dept would do so many crazy things to keep the bubble going.
The money printers are running 24/7, literally just giving money away to keep the appearance of a normal economy going. Remember that money printing for the Weimar Republic worked great for several years, but it was a bubble that did finally pop, just like our economy.
I imagine the Weimar Republic had its own Micheal Snyder writing about how it would fail and as the years went by and it didn’t the wise guys ridiculed the Snyder of their day.
Remember, the longer this inevitable crash is delayed the worse it will be, and the more people will need to prep for it.
Discussing the Baltic Dry Goods Index is absolutely valid. It is one of the few indicators that the Bankers don’t smoke and mirror. It isn’t someone’s imagination. Yes it is affected by the price of oil and not just trade levels. Overlay a chart of the BDGI over oil prices to see the full picture.
“Nothing short of world war will hold it all together”.
Now that is some sociopathic logic.
Bombs blow things apart. Nuclear bombs blow things apart more.
I was wondering about that. The mega rich do well in wars, no one else does. Nothing to buy and victory gardens? Blood and guts. Nuclear war?
I’m no expert on The Baltic index, but if it shows the cost of shipping, isn’t this directly related to fuel, wages, and commodities? Oil is cheap. If we’re in a deflationary spiral, isn’t the index going to keep going down or does it also show the number of ships used for transporting goods? And in reverse, when we have inflation, isn’t it going to ‘look’ like the index is getting better for goods shipped?
And to keep throwing in the argument our lousy manipulated stock market. The Dow is only 30 companies, albeit, they drive the market somewhat, but it’s all a sham.
molon labe
WIprepped
Yes its the cost to ship not the amount of containers shipped. One would think that fuel is the major component of the cost.
The above being said I look at Dr Copper and Steel. Both indicate a serious global slowdown.
Every sword has two edges. When oil drops in price the USD, due to the “Oil Peg”, gains in value as one USD buys more oil. That stronger USD tends to attract desirability of having USD. It also allows breathing room to create more USD w/o inflation.
I received my Economics Education by reading on the toilet.
The BDI tracks the shipping costs for raw materials, such as iron ore.
When demand for products goes down, the demand for raw materials goes down. When that demand goes down, the demand for ships goes down. This causes increased competition for the limited shipping traffic. I believe this drives the index more than fuel costs. The BDI was 4.6 times larger 2 years ago, yet fuel was not 4.6 times the current cost.
In summary, the inflation rate may correlate with the BDI, but doesn’t cause the changes in the BDI. Supply and demand cause both inflation and the BDI to go up or down.
There is a good explanation of the BDI at:
ht tp://www.learningmarkets.com/understanding-the-baltic-dry-index/
I believe the BDI has little to do with actual cost of fuel. Seems to be a pretty good indicator of global economic activity. Very little demand right now. Ask Caterpillar.
Like copper & steel something is up. However I assume that fuel is the greatest cost of shipping. I also believe global trade has certainly dropped. Lets face it, Greeks aren’t standing in line for a new TV.
All in all, there is so much going on simultaneously, adding so many variables, that its real difficult to figure out their individual weighted contribution. Lets just say, “somethings wrong”.
They’ve been screaming about the BDI for years and here we are still trodding along. All these charts and they mean nor show anything because the norm is gone forever.
Purchased a Sawyer mini water filter . Filters up to one hundred thousand gallons . Depending on how dirty the water is. It’s cleanable. For twenty dollars. It’s a game changer.?
And I purchased more antibiotics, fish mox and fish flex.
Oh, I have a Berkey.
The USA has maxed out it’s credit card at the FED so spending has dried up at wallmart, no credit, no goods.
Now bankers being nice people are giving the americans an option to swap real estate for debt and the land Israel and its bankers want is Syria so just keep on pretending that ISIS is not our bitch (Even if we keep giving them guns) and go along with the debt repayment plan.
Don’t worry about Russia trying to stop us and that thsy might end up nuking the USA and just pretend we are scared to death by 1000 ISIS fighters sneaking across the border to take us on with our 400 million guns and keep helping to level the ground in Syria so that it’s all ready for building work to begin on new jewish homes.
On U-tube. Video by David Duke
CNN, Goldman Sachs, and the Matrix of Power