Saturday, July 17, 2010

Productive economy activity indicator

The Baltic Dry Index shows what is going on in shipping across the worlds' oceans and so tell the story about how much activity there is in the real economy, as opposed to stock trading indexes like the DOW Industrial Index, etc. It has just taken a nosedive indicating big trouble ahead.

The BDI is one of the purest leading indicators of economic activity. It measures the demand to move raw materials and precursors to production, as well as the supply of ships available to move this cargo. Consumer spending and other economic indicators are backward looking, meaning they examine what has already occurred. The BDI offers a real time glimpse at global raw material and infrastructure demand. Unlike stock and commodities markets, the Baltic Dry Index is totally devoid of speculative players. The trading is limited only to the member companies, and the only relevant parties securing contracts are those who have actual cargo to move and those who have the ships to move it. [1]

For more information on this index, go here

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