Wed Nov 12, 2008 at 12:50:56 PM PST
Every once in a while in the world of economics an economic indicator will suddenly go crazy. One day the charts all look normal and easy to understand. The next day it suddenly launches into an entirely different world.
What a massive swing in the index means is always open to interpretation (a whole industry exists to analyze these movements), and no one is certain if they are correct until years afterward. Sometimes what it means is more obvious than the why, but the 'why' is ultimately more important.
The Baltic Dry Index dates back to 1744. To put it roughly, it is the price of moving raw materials by sea.
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Peacenik suspects that people sitting around the campfire in new Hoovervilles will be talking about the Baltic Dry Index as one of the earliest harbingers of economic doom. And today the Globe and Mail reports that Canadian banks are getting an increase in the same type of government support that the U.S. banks are getting. This is the same Canadian banking system that we were recently told was one of the strongest in the world. Gjohnsit says the second harbinger of economic doom he sees predicts hyperinflation. But the price of gold is not going through the roof...yet. Peacenik is paralyzed as Peacenik continues to contemplate inflation/deflation scenarios.
Peacenik suspects that people sitting around the campfire in new Hoovervilles will be talking about the Baltic Dry Index as one of the earliest harbingers of economic doom. And today the Globe and Mail reports that Canadian banks are getting an increase in the same type of government support that the U.S. banks are getting. This is the same Canadian banking system that we were recently told was one of the strongest in the world. Gjohnsit says the second harbinger of economic doom he sees predicts hyperinflation. But the price of gold is not going through the roof...yet. Peacenik is paralyzed as Peacenik continues to contemplate inflation/deflation scenarios.
