Score a victory for folks bullish on the global economy...For a picture of this victory, we go to the past two years of action in the Baltic Dry Index. As we mentioned last month, the "BDI" is one of our favorite real world barometers of what's going on. It's the most widely followed gauge of the price it costs to ship raw materials like grain, coal, and iron ore.
The BDI fell 94% in just six months last year as credit – the oil of commerce – was drained from the global economic engine. It's the worst crash we've ever seen an index suffer. But like all economic indicators, the BDI is in rally mode right now...
After striking a bottom below 1,000 last December, the BDI rallied to 4,000 by June. It then corrected to almost 2,000 in September. But as you can see from today's chart, the BDI is set to reach a new 12-month high this week. As long as this index remains healthy, we have to say, "The economy ain't so bad..."
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