You can tell the global economy is on the way back from the brink of disaster. Everywhere you look, the "government indicators" say so.

 

So then how do they explain the thousands of empty cargo ships, some half a kilometre long, anchored near Singapore in what is now the largest ghost fleet ever assembled?

 

They don't.

 

The truth is, over 12% of the world's shipping capacity is now sitting idle in massive floating mothball yards like this one, and that number can only rise as the shipyards are still processing new vessel orders from 3 years ago. You want a real economic indicator? Shipping rates have fallen as much as 90%, and the world's shipping companies are set to fall upon eachother like the bankers have been for the last year.

 

But unlike banking, infrastructure companies are slow to recover. The collapse in global shipping will drive companies out of business, and it could take years for that capacity to return to the market. Long after the economy is ready to resume previous levels (If you are one of the brain-damaged idiots who still think that's possible), the shipping companies will be trapped behind this bottleneck of 3-year turnarounds on build orders and laid up fleets that have rusted out.

 

But it goes even deeper than that. Some countries (particularly, South Korea) have spent the last decade positioning themselves as banana republics for the shipping industry. South Korea alone now produces 40% of all new cargo ships. But things are different now. Nobody is ordering new ships, and many of the companies are attempting to renegotiate (as is the case with A.P. Møller - Mærsk ), or outright renegging on their contracts (As is the case with Iran) These countries have transformed their economies to fill the glut in shipping demand created by those zany 90's, and now their entire economies will collapse. A lot of very wealthy South Koreans are about to become very, very poor.

 

It makes one wonder if President Dae-Jung's death last month was really caused by "multiple organ dysfunction syndrome" as the media states, doesn't it?