Tag Archives: Baltic Dry Index

The Global Economic System Is Crashing – The Stealth Gold Bull Is Alive

Well, this time is indeed very different. This is not Jan., 2015. The world is waking up to the fact that a brand new, multi-headed hydra solvency crisis is upon us. – Eric Dubin, The News Doctors (link below)

One of the idiots from Wall Street that CNBC likes to roll out was on scratching his head over the behavior of the stock market. He asserted that it was nothing more than panic because “the real economy is doing well.”

I’m wondering what data he’s using to draw that conclusion. Nearly every report that has been released for the last few months, other than the highly manipulated/fabricated Government employment report, is showing that economic activity is collapsing to levels last observed in 2008.

The Baltric Dry Index has collapsed to all-time lows. Freight and goods transportation indices area showing a collapse in demand in the wholesale and retail distribution system. This shows a collapse in consumer spending. Based on unadjusted, unannualized numbers, existing home sales plunged 20% from Q3 to Q4. Auto sales are quickly rolling over. Energy debt is blowing a hole in bank balance sheets across the country. Auto finance paper is next.

These are black swans. They’re black swans because no one seems to see them. If they the market sees them then it is not acknowledging them. The current sell-off in the stock market is not remotely close to an acknowledgement of these black swans.

The S&P 500 is at its most overvalued in history by several metrics. It’s dropped roughly 10% from its all-time high and a spectrum of people from money managers to Congressmen are calling on the Fed to “do something.” No one seemed to be bothered by the fact that the stock market never should have been enabled by the Fed to go parabolic over the last 5 years, becoming more dislocated from the underlying fundamentals than at any time in history.

Then there’s gold.  Gold has been pushed inexorably lower by western Central Banks in order to facilitate bad monetary policy decisions.  But gold is the ultimate hedge against corrupt Central Banks and Governments.   Physical gold inventories at the bullion bank controlled gold exchanges in the west are quickly disappearing, as is silver now too.  GLD does not count because it’s always been a roach motel largely of paper gold.

This disappearance of physical gold is another black swan that is neither recognized nor acknowledged by the market, except by a few “conspiracy theory riddled” gold bugs. But the third leg of the gold bull market that began in 2000/2001 is stealthily taking off. Eric “The News Doctors” Dubin has written a worthwhile analysis of what is unfolding:  Stealth Gold Bull Market Continues;  Real-Time Analysis.

Someone from Australia emailed me a report showing that the Perth Mint had temporarily suspended gold sales last night/yesterday.  Physical gold is indeed disappearing.  Soon it will be harder to get at the retail level unless the buyer is willing to pay a hefty premium over spot.  I’m going to start converting as much paper currency as I can into silver – the original and first monetary metal – because it will soon become hard to get as well.

 

Rail Freight Shipments Are Collapsing

The pundits can disingenuously blame the crashing Baltric Dry Index  on container ship overcapacity and find some dopes to believe that fairy tale, but there’s only one explanation for collapsing rail freight shipment volume in the United States:  the consumer has finally suffocated from too much debt and declining real income.

We believe rail data may be signaling a warning for the broader economy,” the recent note from Bank of America says. “Carloads have declined more than 5 percent in each of the past 11 weeks on a year-over-year basis. While one-off volume declines occur occasionally, they are geUntitlednerally followed by a recovery shortly thereafter. The current period of substantial and sustained weakness, including last week’s -10.1 percent decline, has not occurred since 2009.  – Bank of America brain trust

 

Eric Dubin of The News Doctors brought this article to my attention:  Rail Traffic Is Saying Something Worrying About the U.S. Economy

I’d like to point out that the price of oil is collapsing.  It will soon be in the $20’s.  Several Wall Street fraud shops have decided that oil is headed to $20.  I made that call 6 months ago.  Oil is the economy’s canary in the coal mine that the Fed can not remove before it dies.  Rail freight traffic is the canary’s twin brother.

I hope everyone is braced for impact because the system is in for a much bigger shock than occurred in 2008/2009…and the Fed is out of bullets – just ask former Fed President Richard Fisher…

Reader Comment On The Economy

“Guy:”

I don’t have the crystal ball, but the charts for BDI [Baltic Dry Index],  [Shanghai Containerized Freight Index and the North American Trucking index are all pointing down and this sort of cliff diving has been going on for awhile now.

Down in Texas, there’s a fella I know that makes runs with his truck and about a month ago he said that moving product has dropped off a lot.  He confirms others in the trucking business are seeing the same thing.   Also, look at other raw materials such as lumber and iron…all trending down quite rapidly.   All I can say is that it appears the “consumer” is tapped out due to debt most likely.

Another thing that has happened that I have never seen is what the credit card companies are doing in an attempt to get people to buy stuff (I’m 64 so I’ve seen quite a bit, so far, but nothing like we see now). I get credit care apps in the mail (lots of them…more than any other time in my life) whereby they offer such things as “spend $1000 in 3 months and get a credit of $100 to $250 which you can apply to your credit card balance. We take advantage of this all the time…but we never carry a balance. What we “charge” during a month we pay it off with the next statement. Furthermore, we get so many “offers” of balance transfers (never have a balance, by the way) that would give us 12-18 months at 0% interest. Maybe a year or two ago, the length of time for 0% was typically 6 months.

What does all this tell us? There is a problem out there and it seems to be escalating.

Complete Breakdown Of All Economic Activity

The Baltic Dry Index hit a new all-time low yesterday of 522.  It was over 2200 as recently as late 2013.  The stunning collapse in this index is similar to the stunning collapse in the price of oil since July 2014.  Not one single Wall St. analyst was forecasting a decline for oil. Similarly, many of the indices of many of the reports which measure economic activity in this country are beginning to drop sharply, with several back to their levels of 2008/2009.  

Retail sales fell nearly 1% two months in a row, including in December which should be the best growth month of the year for retail sales.  Today the Empire State  Manufacturing Survey (from the NY Fed) declined  and missed consensus estimates.  The new orders sub-index dropped close zero and the future business expectations index collapsed from 48 to 25.

Folks, our economy is getting ready to fall off a cliff again.  My colleague Rory Hall (The Daily Coin) and I did a brief “Web of Deception” episode discussing theses issues plus a brief update on Greece:

The Web Of Deception – An UnNatural Price Correction

This empire, unlike any other in the history of the world, has been built primarily through economic manipulation, through cheating, through fraud, through seducing people into our way of life, through the economic hit men. I was very much a part of that – John Perkins, “Confessions of an Economic Hit Man”

Rory and I discuss the significance of the Baltric Dry Index, the raid on the precious metals sector by the Fed/Bullion Banks and the significance of the dollar rally: