The Baltic Dry Index (BDI) collapsed in 2008 and into the summer of 2009, then rallied sharply the past 2 months. This has encouraged some to conclude that global shipping is now in recovery. The problem is that as a leading indicator the BDI has become distorted recently to more of China stimulus indicator than a global trade indicator. Less than 10% of bulk imports have been coming to America, with about 50% going to China for stimulus driven stock-piling and re-stocking. In addition an unusually large surge in new ships coming on stream this year and next is likely to drive shipping prices down again over the coming months as many vessels bid to carry below-trend global trade volumes.
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I agree. I have to ask when is this China Hype going to cool down a bit. Yes they have a large economy and are growing, but like many investing vehicles the China story has been way overcooked.
And along with that is the recent parabolic move in gold. Lots will get hurt when gold breaks it's parabolic trend line.