If you were a Logistics specialist, you would sit up and take notice about events in the North Atlantic. The fact that there is not one cargo ship presently sailing the high seas with freight. There has never not been trade in the North Atlantic. Nothing is moving, the music has stopped, the party seems to be about over. The world’s economy is in serious trouble. Going down like the Titanic?
No trade? Look at the Marine Traffic Site to see that most of the world’s cargo ships are anchored or docked at port. Rail traffic is also saying something worrying about the U.S. economy, warns Bank of America, where we are experiencing week by week declines. "Carloads havedeclined more than 5 percent in each of the past 11 weeks on a year-over-year basis. Whileone-off volume declines occur occasionally, they are generally followed by a recoveryshortly thereafter.The current period of substantial and sustained weakness, includinglast week’s -10.1 percent decline, has not occurred since 2009."
What is going on? Super Station95 in New York puts it this way: Historic First: North Atlantic EMPTY of Cargo Ships in-transit – ALL anchored along coasts; none moving. This is of course catastrophic for world trade.
“When retailers do not order goods, manufacturers don’t make anything because there are no orders to fill. When manufacturers do not make goods, they don’t order raw materials for manufacturing.
“When there are no orders for raw materials, commodities sellers do not sell raw materials. When no raw materials are sold, there is no shipping by large cargo ships, (or railroads or tractor trailers) to move anything.
“Put simply, the global economy is LITERALLY stopping. Right now. Today.
“How things go from this point forward is simple: Without sales, retailers are not even "turning dollars" so they will have to layoff employees and close stores. Without orders, manufacturers will have to layoff employees and shut down. When manufacturing shuts down, suppliers of commodities will have to layoff employees and cease operations. As all of this economic activity comes to a halt, then the disaster REALLY takes off:
“When businesses are not even "turning dollars”, they cannot pay back their loans. Retailers, manufacturers and commodities suppliers will begin defaulting on bank loans within 30 days. When enough of them default, it begins taking-out banks. As banks begin to fail, others will run to their banks to withdraw money for fear THEIR bank will fail too; and therein starts "bank runs."
“In the meantime, stock values plummet and people’s life savings in retirement accounts, 401-k’s, IRA’s and the like, get wiped out of existence.
“We are literally standing at the edge of an abyss. It appears we are about to go over that cliff.”
The Royal Bank of Scotland has advised clients to brace for a “cataclysmic year” and a global deflationary crisis, warning that major stock markets could fall by a fifth and oil may plummet to $16 a barrel. The bank’s credit team said markets are flashing stress alerts akin to the turbulent months before the Lehman crisis in 2008. “Sell everything except high quality bonds.”
The writing is ‘always’ on the wall. There is no excuse today to be caught like dear in front of headlights yet most will be surprised when the worst happens in terms of world economic activity, which is presently collapsing into itself. “Market Crash – Last Week Was The 2nd And Final Warning was Clive Maund’s headline to describe the beginning of the years markets.
Insanity tends to end sooner or later (usually in death), and in terms of the present financial system it will be soon not later. Predictions of disaster have been plenty but it is always difficult to really catch the timing unless one looks at real things like cargo and rail freight. When both of these sink we know the economy is sinking.
Today, this week, this year we have the perfect storm blowing heavy winds into the faces of the world’s investors and businesses. Contraction and deflation are the watchwords of the day meaning we are sailing right through a recession and plunging head first into a world depression, which in a world of stupendous debt should scare the pants out of everyone. Say goodbye to the world we know and God help us with the new one that is about to break across all of our doors. Panic has not arisen, not yet at least, but fear levels are rising, as they should.