The “ghost fleet”
Revealed: The ghost fleet of the recession
The biggest and most secretive gathering of ships in maritime history lies at anchor east of Singapore. Never before photographed, it is bigger than the U.S. and British navies combined but has no crew, no cargo and no destination – and is why your Christmas stocking may be on the light side this year…
…The world’s ship owners and government economists would prefer you not to see this symbol of the depths of the plague still crippling the world’s economies.
So they have been quietly retired to this equatorial backwater, to be maintained only by a handful of bored sailors. The skeleton crews are left alone to fend off the ever-present threats of piracy and collisions in the congested waters as the hulls gather rust and seaweed at what should be their busiest time of year…
…This time last year, an Aframax tanker capable of carrying 80,000 tons of cargo would cost £31,000 a day ($50,000). Now it is about £3,400 ($5,500)…
There are no “green shoots”, boys and girls – just a bit of money-shuffling which government and corporate bean counters will call “growth” over the next few quarters…but out there in the real world, nothing is happening. The global economy is still declining – not rising, not even bottoming out. And eventually the unsustainable fiscal policies of all the major nations of the world will come home to roost – you can’t spend your way to wealth; and when you’re broke, borrowing money just makes things worse. The final collapse of all this will be quite stunning – very sad, too, as a lot of people are going to get hurt who wouldn’t have if we hadn’t tried to bail out failed corporations like GM and BofA…
HAT TIP: Mish’s Global Economic Trend Analysis
UPDATE: US credit shrinks:
Professor Tim Congdon from International Monetary Research said US bank loans have fallen at an annual pace of almost 14pc in the three months to August (from $7,147bn to $6,886bn).
“There has been nothing like this in the USA since the 1930s,” he said. “The rapid destruction of money balances is madness.”
The M3 “broad” money supply, watched as an early warning signal for the economy a year or so later, has been falling at a 5pc annual rate.
Similar concerns have been raised by David Rosenberg, chief strategist at Gluskin Sheff, who said that over the four weeks up to August 24, bank credit shrank at an “epic” 9pc annual pace, the M2 money supply shrank at 12.2pc and M1 shrank at 6.5pc.
“For the first time in the post-WW2 [Second World War] era, we have deflation in credit, wages and rents and, from our lens, this is a toxic brew,” he said.
Earn as much as you can; save as much as you can; pay off as much of your debt as possible – those who are wise, now, will bear the next few years better than those who aren’t.
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