The velocity of money and the Baltic Dry Index.

The world economy is dying. Powerful people of the world are in denial. They think they will be able to correct the situation, but the world economy cannot be saved. The two indicators of a dying economy are the velocity of money and the Baltic Dry Index.

Let us examine the velocity of money. The simple definition is the speed with which money circulates through the economy. The more dynamic the economy, the more optimistic people feel about jobs and economic security, the more they feel relaxed and the more likely they will spend, travel, feel good about the country, the government, the people, and themselves. Presently, the velocity of money is collapsing. Whatever money ordinary people earn and have they do not want to spend. Also, many, many people have no money to spend. The situation is very dire, but one would not know by watching the “evil vision”. On evil vision, attractive women in eternal spring dresses, and men in impeccable suits with or without neckties constantly proclaim prosperity. The only people enjoying prosperity are the less than one percent of the ownership class and about five to ten percent of the overseer class to which the stars of the evil vision belong. (Evil vision is TV.) There is so much discontent in the country that it threatens the stability of the country. The economy is getting worse. Just look the stock market and the high yield bond market!

Another measure of how bad the US and world economy are is the Baltic Dry Index. Just last week it dropped below four hundred. Before the “Great Recession” of 2007-09, it was registering in the several thousands. After the so called Great Recession ended, it recovered to almost 2000. Now, after seven years of recovery it dropped to below 400, in the year of 2016. Any intelligent person, non-brain washed, knows that there was no recovery. In one of my previous posts, I stated that economic recovery in the US is impossible, because the energy entering the US economic system is decreasing, while the energy needed to maintain its internal and external operations is increasing. The Reserve Status of the dollar in the world is enabling the US to maintain its operation internally and world wide as long the rest of the world is accepting the dollar. That ability to maintain its operations is based on debt. As long as the rest of the world accepts American debt there is no problem. But that is ending and that is the problem. When the dollar is rejected it will be kaput.

The Baltic Dry Index {BDI} is indicating that world trade is collapsing. Empty ships are being anchored in ports. Oil tankers, full of crude, are anchored. There are few buyers of crude. Some experts are telling it is going to get worse. Collapsing BDI is possibly signaling world wide depression. Decreasing velocity of money is indicating that the majority of people have no money to buy even basic necessities.  Why are 94,000,000 people not in the labour force? Why are 47,000,000 people on food stamps? Why are wages for the non overseer class stagnant and decreasing? Why is the infrastructure of this nation dilapidated? Up until 2016, there was plenty of money for Wall Street. Now the stock markets and the bond markets of the world are collapsing. It could be that the world is entering the Economic Black Plague State. Only time will tell.

 

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