| World Trade fall |
One of the problems of the world today is that too many nations across the globe have tried to export their way into economic prosperity. The economies of these nations, which include China and India, are fuelled less by domestic demand than by demand from other countries, Europe, Japan and the US in particular.
Therefore a contraction in these three economies is going the hit the world hard. It would as an immediate effect, reduce the ability of these countries to import products from developing countries. Thus the world at large would see a decline in exports. This already seems to be happening. In mid-October 2008, the Baltic Dry Index, a measure of shipping volume, registered a fall of 50% in one week.
Japanese exports fell by 1.7 percent for the first time in about five years and Global trade is projected to shrink in 2009 for the first time since 1982.
The full impact of this contraction is yet to hit home. When that happens expect more bad news.
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