Baltic Dry Index tanks - Thailand and Iran bartering Rice for Oil
There is again a superb analysis from gjohnsit of the "current" economic crisis over on DailyKos. Its staggering. Lets start with the charts left - thats the Baltic Dry Index. An index like the Dow Jones or Dax that is based on the money it costs to ship raw materials over sea. Its been in existence since 1744. That index has collapsed completely (98%) over the last two month. Compared to indices which hold mostly bank stocks this one has real implication in the real world.
The price of the daily rental of a Capesize bulk carrier has collapsed from $234,000 to $5,611. I'm no expert on shipping, but I bet that the cost of fuel, insurance, maintenance, and crew salaries on a ship that large is about $5,600 a day. If there is no profit from moving these ships, then goods will not move.
Thats right. Remember me talking about the tooth of the clockword wheels coming of? Global trade is likely the first big chunk thats flying down the pit as with prices like these ships donīt make a profit which means they have no reason to operate which means you donīt have goods shipping around, which means total collapse of the current "global" economy.
How will this counteracted? BARTERING. Yes you heard it right. The thing we are talking about in our podcast since over a year - that we are heading into a bartering moneyless society - its freaking already happening - on a much bigger scale then I ever thought possible:
Thailand on Monday said it planned to barter rice for oil with Iran in the clearest example to date of how the triple financial, fuel and food crisis is reshaping global trade as countries struggle with high commodity prices and a lack of credit.
Right right! Thailand barters with Iran - rice for oil. That is a transaction without money changing hands. You know the thing everyone we ever talked to about made them laughed at us, ridiculed it or tried to debate it. Yes its happening on a grand scale. Now will it trickle down the scale to reach normal people? Interesting times for sure.