The Beginning of the End of ‘Progress’ ?

The Baltic Dry  Index,  which  measures the price of shipping  dry  goods globally, has dropped to  its lowest  known point in  the past few days at 402. Other indicators too are pointing to  a rapid downturn in export shipping volumes.

ClipboarBDI12-1-16

On its own,  the BDI low  index may  reflect  nothing more than  an oversupply of shipping ,  but taken  with other data  measures, indications are that international   trade is slowing at a rapid rate globally.

If this is the case, then  we are likely to see a further deterioration in commodity prices, particularly oil prices, as demand slumps, an increase in  unemployment in  the industrial  sectors globally and an increasing shrinkage in  consumer spending.

And naturally, that  decrease i   trade globally is simply because people are buying less! Here’s a neat  little Bloomberg graph  which  shows  the trend for retail  sales in the United States.. People simply seem to be buying less ‘stuff’

Because the human world’s current survival  culture is predicated on  continuous growth  in  production of things, such  a reversal  will have significant implications for poverty, hopelessness and hunger in  the short to medium term.  It will  require no  less than  a massive restructuring of what  it means to be human  on this planet, for us all  to  get  to  a state of sustainable equilibrium, and to  finally recognise our equality with  the other species we co-habit the world with.

On the bright side, the  elimination of ‘growth’ or even a reversal  in growth, will  be a significant bonus to the world’s environment.  marsThe diminishing need to  use more coal  and gas, to  mine more  minerals, to  build more cities, dwellings  and transport networks and  consume more generally, will  mean less of what  is left of our natural  environment will  become despoiled.

As the ‘Geography of Transport Systems ‘ notes succinctly, there are many factors which influence the BDI price; lowering  oil prices for ships ( bunker oil), too  many ships in the market and lastly and likely most significantly, lowering demand for  bulk  goods. OIl process are approximately 40% of the price and there certainly has been  a glut in   bulk tankers, but we also  know bulk  commodity prices  ( iron ore, copper etc etc) have dropped precipitously due to   much  reduced demand from  primarily China. But a drop of this magnitude foretells something much  bigger in  the wind…


 

Postscript

And here’s the BDI at 29th January …

BalticDry29-1-16

And even  Bloomberg might be coming to  a similar consensus as of 29th  January…

http://www.bloombergview.com/articles/2016-01-28/shipping-news-says-world-economy-is-toast

 

 

Links

http://physics.ucsd.edu/do-the-math/2011/07/can-economic-growth-last/

http://www.global-briefing.org/2012/07/the-steady-state-economy-life-after-growth/

http://www.paecon.net/PAEReview/issue57/Trainer57.pdf

http://robertdfeinman.com/society/no_growth.html

http://www.americanshipper.com/Main/News/Drewry_Container_shipping_companies_to_lose_5b_in_62624.aspx?source=MostPopul

http://www.business-standard.com/article/economy-policy/more-bad-news-for-ocean-trade-116011300352_1.htmlar

http://www.zerohedge.com/news/2016-01-11/nothing-moving-baltic-dry-crashes-insiders-warn-commerce-has-come-halt

http://www.hellenicshippingnews.com/baltic-sea-index-hits-all-time-low-as-shipping-crisis-deepens/

http://www.marketoracle.co.uk/Article53707.html

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