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There is so much commotion going on over the past few months, it has become scary and confusing no matter where one looks for news. The Covid19 has changed everything when it comes to the Just in Time Delivery System and is also taking lives as we witnessed China react like never before. We have done our level best to stick with the idea that the central banking system has no choice but to print in order to stay in control, and will continue to need to do so, as the printers look for other newsworthy excuses to keep it up.
Our Velocity of M2 Money, which only gets updated every 3 months, should be amended soon. We expect the issues of low money flow to remain as we’ve highlighted over the years and as we exit out of the 1st quarter of 2020. The Baltic Dry Index is starting to climb and hopefully it’s a real believable stat as the issues of containers leaving China, are magically showing up, strong enough to raise the global cargo vessels in almost overnight fashion. Of note, the very next day after Wuhan was lifted out of quarantine, the BDI went higher! That’s some pretty fast and accurate updating in a world completely stopped of almost all shipments from that nation.
In a way, we’ve been searching thru the data the way the “outsiders” did in the movie “The Big Short” just before the housing market puked. Going thru the stats is where gems of truth can be found which go against the advertised statistics like those in the most recent BDI posts. Most recently, scheduled containers going into China have curtailed the most since 2017. To add to the previous slowdown ..” this year, the traffic slowdown, with both fewer scheduled calls and more cancelled ones, is occurring much earlier. This comes even though many airlines have announced cancelling flight service, reducing air cargo capacity and forcing manufacturers to switch to waterborne transportation even for higher-value and more time-sensitive cargo.”
Checking out the airlines next “Flybe’s collapse could be the ‘first of many’ airlines” going into “bankruptcies, (which) should be expected in the coming months”. This is highlighting the facts that all international flights (travel and cargo) are being used less and less with the Covid19 being used as an excuse for an already faltering global economy. This historical chart shows the annual growth in global air traffic passenger demand from 2006 to 2020, providing a much bigger issue over with 2018 (factual) and 2019 (estimate) highlighting the fact of a 43+% reduction has already happened before the virus.
The point here is the only things that got bigger has been the printing and the depth of deception. With all this newly printed money going where it would benefit the few over the many. This has yet to improve the flow of money. If the shipping/travel stats actually did improve, they have to beat what was lost before the virus hit. That requires a much stronger economy, with employees making enough, to not only feed the family and pay the rent and taxes, but to be able to buy manufactured products instead of making due with what one has. The focus is still on a global economy, on life support, that took a gut punch to the body, while in a coma.