Analysis of News—www.analysis-news.com
Of Interest to Investors, Survivalists and Others Concerned
About Their
Economic and
Financial Futures
__________________________________________________________________________________________________________________
With
a focus on the Plutocrats, Goldsmiths, Super-Rich Insiders, and their Allies
and
what they are conspiratorially doing to
manipulate the financial markets, make more
profits, rip us off and install a world government under
their control
The Goldsmiths—Part LII
By R. D. Bradshaw
This
Goldsmiths will look at the work of the financial market manipulators to crash
the global economy in order to achieve various aims as discussed in previous
Goldsmiths. One of the things that is
happening is that international trade/commerce is grossly down; which in turn
is creating problems in many nations around the world. In some quarters, there are cries for protectionism
to try to save the economies in certain countries.
Thus,
the question now is it possible that protectionism is having an impact on
global trade and commercialism? To see
how bad the problem is, it would be well to take a look at some data on world
shipping.
The Baltic Dry Index
On
Feb 9, 2009, Rense.com carried a story by James Wickstrom on the “BDI Index
Points to Worldwide Disaster.” This
Wickstrom report appears to be based partly on data from an engineer in Denver
who has been following the Baltic Dry index of shipping worldwide. Since the index is not a traded index, Wickstrom
claims that no one profits from the index itself.
Per Wickstrom, it is an indicator
of how much product is actually out for delivery throughout the world. It cannot be cheated or manipulated because
it deals with actual products that are either actively being shipped, or are on
docks waiting to be shipped as Freight On Board (FOB). In June, 2008 the BDI stood at a reasonably
healthy 11,600. As of now (in Jan 2009), the BDI has plummeted to 791. That's about a 94% drop in goods actually
being shipped worldwide.
If we use the Baltic Dry Index
(BDI) as a guide for the next 12 months of product delivery and food
availability in the stores we shop in then the BDI says shelves will be
virtually empty of almost every product we use each and every day. If the BDI is wrong it will be an historic
first. The BDI is used by bankers, financial experts, brokers, traders and
everyone in high-end finance to assess the global financial condition and the
availability of products worldwide.
The BDI has dropped 94% in a short
few weeks which means raw materials, grains, ores, steel, iron, cement and all
imported products for food manufacturing and product manufacturing even though
we actually do very little of that here in the US. We do make bread and other
products that require grains, like cereals. We import clothing, gasoline,
various fuels and, well, just about everything these days and the BDI says global
shipping has shut down. Nothing is moving. Because this spells disaster for a
country that produces little and imports everything Wickstrom says that he has
been intently blogging about the subject…
This portends unprecedented
disaster around the world, especially as it relates to food. Products are
simply not being shipped. They aren't being shipped because there aren't any
orders for them. This will translate into massive, unprecedented unemployment
worldwide and, as things get worse, massive food shortages. Wickstrom suggests that we stock up on dry
foods like 50 lb bags of rice, 50 lb bags of oatmeal, beans, powdered milk,
canned foods, canned vegetables and such to assure your family will have enough
to eat when the world economy totally collapses.
Wickstrom adds that if you do not
have food stored up for your family, you will starve to death. If you do not own guns and ammunition, any
food you do have will be stolen by roving bands of savages who are trying not
to starve to death. The social breakdown
that is coming is unparalleled in modern history. We are going to suffer on an
order of magnitude greater than folks suffered during the Great
Depression. The report urges us to
prepare because there may be only a few months left before it all goes to pot.
In the way of
some supplemental information, a reader in South Africa sent me the Wikipedia explanation
of the index. This source said: “The Baltic
Dry Index (BDI) is a number issued daily by the London-based Baltic
Exchange. The index provides an assessment of the price of moving the major raw
materials by sea. Taking in 26 shipping routes measured on a time charter and
voyage basis, the index covers Handymax, Panamax, and Capesize dry bulk
carriers carrying a range of commodities including coal, iron ore and grain.
“Every working
day, the Baltic canvasses brokers around the world and asks how much it would
cost to book various cargoes of raw materials on various routes (e.g. 100,000
tons of iron ore from San Francisco to Hong Kong, or 1,000,000 metric tons of
rice from Bangkok to Tokyo). The index
is made up of an average of the Baltic Supramax, Panamax, and Capesize indices.
These indices are based on professional assessments made by a panel of
international shipbroking companies. The
BDI factors in the four different sizes of oceangoing dry bulk transport
vessels.
“Most directly,
the index measures the demand for shipping capacity versus the supply of dry
bulk carriers. The demand for shipping varies with the amount of cargo that is
being traded or moved in various markets (supply and demand).
“The supply of
cargo ships is generally both tight and inelastic — it takes two years to build
a new ship, and ships are too expensive to take out of circulation the way
airlines park unneeded jets in the California desert. So marginal increases in
demand can push the index higher quickly, and marginal demand decreases can
cause the index to fall rapidly. e.g. "if you have 100 ships competing for
99 cargoes, rates go down, whereas if you've 99 ships competing for 100 cargoes,
rates go up. in other words, small fleet changes and logistical matters can
crash rates... The index indirectly measures global supply and demand for the
commodities shipped aboard dry bulk carriers…
“Because dry bulk
primarily consists of materials that function as raw material inputs to the
production of intermediate or finished goods, such as concrete, electricity,
steel, and food, the index is also seen as an efficient economic indicator of
future economic growth and production. The BDI is termed a leading
economic indicator because it predicts future economic activity.
“Because it
provides ‘an assessment of the price of moving the major raw materials by sea,’
according to The Baltic, ‘... it provides both a rare window into the highly
opaque and diffuse shipping market and an accurate barometer of the volume of
global trade -- devoid of political and other agenda concerns.’
“…It is in the
interest of The Baltic Index to claim it is ‘devoid of political and other
agenda concerns’ but anything can be gamed or speculated.
“On 20 May 2008 the index reached its
record high level since its introduction in 1985, reaching 11,793 points. Half
a year later, on 5 December 2008, the index had dropped by 94%, to 663 points,
the lowest since 1986, though by 4 February 2009 it had recovered a little lost
ground, back to 1,316. These low rates
move dangerously close to the combined operating costs of vessels, fuel, and
crews.”
China
Container Shipments Stalled
Rense.com of Mar 4, 20098 had a
related follow-up story on “China Container Shipments to North America Stalled.” This report seems to have been based on data
from the Journal of Commerce Online.” It
specifically addressed shipping data from three Chinese ports and one Filipino
port to ports in Mexico for the period 4/2/09-3/3/09. During this one month, the ports in China and
the Philippines had exactly zero exports to North America.
As the story noted, “Container
volumes at most Chinese ports will grow at single digits rates this year, and
may actually decline at some.” ‘2009
will be the most difficult year in a generation,’ said Dr. Fu Yuning, chairman
and managing director of China Merchant Holdings (International), whose
terminals handle 34 percent of China's total container volumes.
“He said that after several months
of no growth in the throughput at China's terminals there was an increase in
exports of loaded containers at the end of February as manufacturing started to
pick up. Dr. Fu attributed the increase
in exports to the drawing down of inventories in China's main export markets in
Europe and the U.S. On the other hand,
Chinese container manufacturers have not received any new orders since last
year. ‘All our ports are jammed with empty export containers,’ he said.”
The
Bottom Line
The essence of the above stories
is that international shipping—at least from Asia to North America—has declined
rapidly in the last 18 months. In fact, the Wickstrom report on the Baltic index
is signaling an imminent disaster. The
indicated drop in world shipping could be profoundly significant in the coming
days.
For
a country like the United States, which is utterly dependant on foreign imports
for survival, the Baltic Dry Index offers bad news. Not only do these figures spell trouble for
most consumer goods, they are even spelling trouble for American food items. Huge amounts of food (at least 28% or more) for
American tables are coming from foreign nations.
For example, many fresh fruits to
the US come from Chile (often by air shipments). As I use olive oil, it must be noted that
most if not all olive oil sold in the US comes from Europe (Spain or
Italy). There are also the old regulars—like
cocoa, coffee and bananas.
What will happen if olive oil,
coffee, cocoa and fresh fruits start vanishing from grocer’s shelves? I am not aware of any present problems in these
items but if international trade and commerce is in a stall, there could be any
number of products vanishing from the US markets.
The last item worth noting is the
question about protectionism. Already
numerous media reports are surfacing that protectionism is on the rise. While much of this so far has been talk,
smoke and mirrors, it must be allowed that some of it could materialize. I personally doubt that protectionism will
arise in the short term as long as the dollar has acceptance.
But the day the dollar starts
fading, protectionism will become an issue and foreign goods (including food)
will begin to vanish from US markets. As
a minimum, the many countries which have been accepting paper IOUs from the US
for their goods will one day decide that US IOUs are not worth anything. At that time, they will simply quit exporting
their goods worth something to the US in exchange for paper promises not worth
anything.
The
Gold and Silver Fallout
This whole theme of a slowdown or
fall in international trade and commerce will definitely have an impact on gold
and silver. The simple reason is that
any decrease in use and reliance on currencies (as would happen with a fall in
international trade) will open the door for an obvious increase in reliance
upon gold and silver as more stable and solid alternatives. This would certainly happen at the
national/state levels; and I would submit that even individual people will also
have a greater respect for precious metals.
If there should be an appreciable
protectionism among nations, we can bank on it that some nations will start
looking for ways to increase their supply of gold at the national level. While we may not have much presently in the
way of protectionism, it seems prudent to leave the door open for some to eventually
surface. In any case, gold should be
helped in the coming days.
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Besides the
revelations contained in the Goldsmiths’ articles, the work of the plutocratic
financial market manipulators to conspiratorially manipulate and control the
financial markets (to make more profits and install a world government under
their management) is also addressed at length in the periodic analysis of the
news and in other articles produced at www.analysis-news.com. This website has an article of interest to
any person interested in understanding the market Manipulators. It is the Hidden Secret of the Manipulators,
why they succeed and how to follow their manipulations.
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