Wednesday, November 26, 2008

Trade is drying up – the bailouts aren’t working are they?

Shipping costs plunge to 22-year low

The cost of shipping dry bulk commodities such as iron ore, coal and grains plunged to its lowest in nearly 22 years on Wednesday, as demand for raw materials in China and the rest of the world continued to tumble amid the economic crisis.

Posted by v stor @ 07:21 PM (758 views)
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2 thoughts on “Trade is drying up – the bailouts aren’t working are they?

  • financial planner says:

    Yeah, but they’re rising now and will continue to do so for years, with volatility.

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  • planning4acrash says:

    That’s almost a 99% fall, and the cost of running these ships is over $6000/day. They are running at a loss. So, Either prices go up, or we get shortages. Something must give. But why the drop? Could it be a global currency crisis? That, like Iceland, exporters simply won’t accept credit notes from most major economies, because they fear that the money, once they get it, will be devalued to nothing? Could it be that exporting countries are aware that the inevitable is being avoided by current bailouts, and that currency run, and, doubling, tripling, quadrupling of gold is on the cards? Is this why all the exporting countries are buying shedloads of gold with accumulated reserves instead of exporting for fiat money?

    Writing is on the wall, global trade will only recover once currencies are revalued and exporters see a bottom to the currency rout. But, once trade resumes, volumes will still be well down, because the devalued currencies will buy less.

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