How dead is the world's economy? From Singapore, here's another illustration:
SINGAPORE — To go out in a small boat along Singapore’s coast now is to feel like a mouse tiptoeing through an endless herd of slumbering elephants.According to the author, the actual number of cargo ships bobbing at anchor is 735. He reports that eight container shipping companies have gone bankrupt in the last year and another large company is in imminent danger.
One of the largest fleets of ships ever gathered idles here just outside one of the world’s busiest port, marooned by the receding tide of global trade. There may be tentative signs of economic recovery in spots around the globe, but few here.
Hundreds of cargo ships — 100,000 to 300,000 tons each, with the larger ones weighing more than the entire 130-ship Spanish Armada — bob so empty that they seem to perch on top of the water rather than in it, their red rudders and bulbous noses, submerged when the vessels are loaded, sticking a dozen feet out of the water.
Earlier this month, it was reported that there is no excess crude oil storage capacity. Every available container is full and US refineries are operating at 85% capacity.
Revenue reports show that, thanks to the $4.00 per gallon pump prices, the American public seems to have permanently changed its driving habits and gas tax receipts are trending downward. State transportation budgets are taking huge hits and everyone is scrambling to find new taxing options such as taxing you for the miles you have driven instead of the number of gallons of gas you pump.
So, in light of the current economic conditions, why is crude oil heading towards the $60 per barrel range? The simple answer might be found in this article, Energy prices fall before crude
Dour economic reports have outweighed the positive for months, however, and part of the reason energy prices have been sustained at the current level is the weak dollar. Crude is priced in dollars, which makes it cheaper to buy when the dollar falls.Economic chaos reigns in a whirled gone topsy turvy. Nothing is certain in the wake of a spectacular seismic economic event. Confidence in the US as the whirled's economic engine has gone up in the smoke of the flameout. Remember the comment of our well educated, young Asian visitor, Wobbly Guy? He has decided to cast his lot with the Chinese instead of looking in our direction. That tells the story.
The U.S. currency has been weakened by the massive government bailout of banks and automakers.
The dollar fell less than a penny against the euro Tuesday, but is down about 6 cents compared with the beginning of the year.
“Maybe it as simple as the fact that oil has more dollar value in a world where the U.S. government is running up a debt of historic proportions,” analyst Phil Flynn said in a client note.
That would go a long way to explain why energy prices are not falling even further.
Go east young man.