Feb 22 2009
Interesting Recession Indicator
A thanks to the Once and Future Farmer for the link to the Baltic Dry Index, which is an excellent indicator of global business health. This index is a relatively stable indicator of what will be shipped around the world and is not inclined to bounce up and down based upon swings in commodity prices. Instead, shippers must keep a handle on how many ships will be needed because of the huge expense with building them.
This indicator slid steadily last fall and then flattened out in the last quarter of the year. However, in February, there was a little rise in the indicator, which should give some hope to the growth of the economy in the upcoming year. Some of this is from China, which is so hungry for raw materials that a global recession may not be able to stay in effect for long. China is sitting on huge piles of American dollars, and they can buy goods around the world.
The Weiss Research group, which keeps track of how money is being used around the world maintains that the Chinese version of a stimulus package is having an impact on their nation. Though the Olympics did not generate the kind of follow up foot traffic that the Chinese government had hoped for, the leaders of the Communist Party are no fools. They can see the problems that happened in their nation in the past year and will take steps to remedy these as they can. For example, the snow storms that shut down transportation unnecessarily last year is a learning experience for the government. Hopefully they will take the international business community’s criticism to heart and improve on the snow removal during the next big snowstorm. Again, infrastructure changes in China creates needed jobs, and helps the whole economy.
Tthe government will be scrambling to get the young people back into making a living, after the closures of factories in some of the provinces. Fortunately, other markets such as South America are opening up boldly to Chinese products, and that will help both areas of the world to be less susceptible to getting “pneumonia ” when the United States gets the “flu.” We’ll keep an eye on the BDI to tell us when the world will pull out of its slump.
Interesting site! I checked out the pattern of famine at three month increments and found myself feeling much more relieved about the current map. Thank you so much for the links, as they will be great to discuss in my next blog.
Like you, I hope gardens are going to go in this spring also, but I fear this is a lost skill to many folks in the cities.