There’s no drier subject than the Baltic Dry Index.

Calculated at London’s Baltic Exchange, it measures the rental value of the world’s freight shipping fleets.

Yawn!

Think again. The Baltic Dry Index is now down 92 percent since peaking in June.

The Telegraph is reporting that, “Freight rates for shipping are crashing at the fastest pace ever recorded as banks shut off credit lines to the industry, precipitating a sudden crunch in world trade.”

Jeremy Penn, President of the Baltic Exchange commented, “It is extremely serious. Freight rates have never fallen this steeply before. It is telling us that world trade in raw materials has slowed dramatically. Shippers are having genuine difficulty obtaining letters of credit from banks.”

And this is only one example of the implacable meltdown of many once impregnable indicators. It’s not Arctic icefields we should be worried about, but the buttresses of debt and trade worldwide.

On a threefold scale of assessment of future world economic activity, how would you rate our prospects for the next five years?

1. Mild downturn,
2. Nasty recession
3. Full-on depression.

Not the most difficult of questions to answer is it?

I suspect merchant mariners everywhere will soon be echoing the sentiments of the poet John Masefield:

I must go down to the sea again,
To the lonely sea and the sky,
And all I ask is a tall ship and a star
To steer her by.

John Evans

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