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A Neglected Chart Points to a Recession This Year

Written by Gary North on January 10, 2012

The Baltic Dry Index (BDI) shows freight rates in Europe. When it falls, bad things happen.

Take a look at what has happened since last August. The prices were rising until November. Then they reversed. They have gone over a cliff.

The BDI reveals that manufacturers are cutting back in preparation for a spreading recession.

The recession in Europe has begun. Germany has suffered three consecutive months of decline.

This index is a leading indicator, because it reflects the opinions of manufacturers. They have reduced their orders of raw materials.

The assumption of Establishment economists is that this recession will be confined to Europe. Yet Western Europe is the largest economy on earth.


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One thought on “A Neglected Chart Points to a Recession This Year

  1. That is one shear cliff!! Almost straight down.

    Should investors short something? Euro? European stocks?