Sunday, December 28, 2014

Measuring the "Heartbeat" of the World Economy -MSCI & the Baltic Dry Index (via Line Charts)

Majority of people daily focus on the American and London stock markets to find the "heartbeat" of the economic world.  However, to get the actual "heartbeat" of the economic world, people should focus on the MSCI All Country World Index and the Baltic Dry Index.  Both are better measures of economic growth than the American and London stock markets that the mainstream media covers regularly. Both the MSCI and Baltic Dry Index have been volatile (especially in 2014), however, as can be seen below, the losses are bigger than the gains and the Baltic Dry Index is at a record low therefore proving the mainstream media's adage of "the economy is doing great because people continue to shop and jobs are being created" is incredibly false.  National governments and their instruments of deception will not tell you the truth until the "bottom has hit" and everything has "bottomed" leaving you in a situation where you have lost everything.

MSCI Inc. -is a US-based provider of equity, fixed income, and hedge fund stock market indexes, and equity portfolio analysis tools.  It was an index created by Morgan Stanley Capital International (MSCI) that is designed to measure equity market performance in global emerging markets.  The Emerging Markets Index is a float-adjusted market capitalization index that consists of indices in 21 emerging economies: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey.

Baltic Dry Index -is an assessment of the price of moving the major raw materials by sea. Taking in 23 shipping routes measured on a time charter basis, carrying a range of commodities including coal, iron ore, and grain.  The index indirectly measures global supply and demand for the commodities shipped aboard dry bulk carriers, such as building materials, coal, metallic ores, and grainsSince dry bulk primarily consists of materials that function as raw material inputs to the production of intermediate or finished goods, such as concrete, electricity steel, and food.  The index is also seen as an efficient economic indicator of future economic growth and production. The BDI is termed a leading economic indicator because it predicts future economic activity. Unlike stock and bond markets, the BDI "is totally devoid of speculative content.  People don't book freighters unless they have cargo to move".  The Baltic Dry Index is the hardest chart to manipulate (unlike the stock market, bond market, National GDP, and National Labour Markets) so it is the real measure of the economic pulse of the world.

     If people are not moving things, they are not building and producing things, and therefore not selling things.  So other than Companies "buying back" their own stocks and Countries printing money and buying their own government bonds (as well as throwing it into stocks to manipulate the stock markets and keep "dumb money" in the stock market), the World economy is contracting at a massive pace with no recovery in sight.  

     Therefore, (a) Pay off debt, (b) Buy only the things you need, and (c) Avoid going further into debt by making huge purchases that will devalue over time and can only be profitable depending on the economic markets and people's spending power (which is dwindling). 

"None of the problems from the Financial Crisis in 2008 were fixed and the bandages aren't doing much to stop the gunshot wounds of the hemorrhaging economy.  The next Financial Crisis in 2015 could be the Quadrillions in derivatives, it could be a hyperinflationary scenario, it could even be caused by a massive war, and it certainly could be a radical change in the monetary system" (All of which are in play presently affecting a number of diverse countries and their economies differently). "Regardless of the road we are driven down, it all ends with a cliff".

- Don't be fooled at the malls and shopping centres when you see it packed with people.  Often people are doing more window shopping than anything else and the people actually taking advantage of the 60-80% sale deals are doing so through their credit cards. 2014 was the year of the "dead cat bounce".  2015 will just be the admittance of the Global Recession in place and the global crash that "Quantitative Easing" delayed in 2008.

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