alt-market.com / By Brandon Smith / December 19, 2012
The markets, as most people reading this should now well know, no longer reflect in any way the true economic health of our country. If one was to measure the financial “recovery” of this nation by the strength of global stocks alone, he would probably come to the conclusion that the collapse of 2008 was a mere hiccup in the overall success of the worldwide economic system. However, electronically traded equities with little more to back their value than scraps of receipt paper and numbers on a screen have no bearing on what is going to happen to you, and to me, over the course of the coming year. The stock market is a sideshow, a popcorn movie, a façade. The real drama is going on behind the scenes and revealed in fundamentals that mainstream analysts no longer discuss…
The only advantage of a long drawn disintegration of the overall system is that as the years past, it becomes possible to discover a pattern through which we can gauge where we really stand today and will stand tomorrow, giving us a chance (a narrow chance) to limit the eventual damage. Unfortunately, the pattern now in motion suggests that the next year will be exactly what we have been predicting over the past several months: Dismal.
The MSM refuses to discuss it at great length, but all signs show an epic global slowdown in demand and production, especially in the final quarter of 2012. This slowdown cannot be denied, nor can it be shrugged off as inconsequential. This development is exactly as I predicted in January of this year using the Baltic Dry Index as a guide. During that first quarter, the BDI fell to record lows, indicating an extreme decline in shipping demand around the world, which, in turn, indicated a fall in demand for raw goods, which, in turn, indicated a fall in demand for consumer goods. Mainstream pundits sought to distract the public from this fact by claiming that the BDI was collapsing due to an “oversupply of ships”, not rescinding demand. This disinformation was proven incorrect in the beginning of the third quarter of this year, when export nations from China, to Japan, to Germany all began reporting abysmal manufacturing numbers and steep faltering in overseas purchases.
Of course, we all know what happened next: The markets began to tank when they caught the scent of a slowdown, losing a thousand points within the span of a week. Not so unpredictably (since I also predicted it at the beginning of the year) the Federal Reserve leapt into action with its announcement of QE3 (QE Infinity).