johngonole

Rethinking the Baltic Dry Index

Someone should overlay the BDI with the M3 money supply. My guess is that when M3 explodes due to increase bank lending then the BDI goes higher. When M3 shrinks the BDI goes much lower. My guess is that the BDI follows the Austrian theory of the busniess cycle. When money in cheap and easily borrowed demand exceeds supply. Just when the new ships come online then demand drops off as the one time blast of borrowing ends. Wild swings are probably lagging a bit behind the M3.