Re: Container Traffic Bad News or Good News?
Author: BOB2
Date: 08-23-2015 - 13:04
We economist's were taught that this should mean lower international shipping costs, which should result in cheaper import costs, resulting in higher demand, and thus, would be more likely to increase domestic rail container traffic, with the infamous economist's caveat: "all other things being equal" (which, of course, in a complex world, they never actually are?).
With the exception of a few notable and newsworthy places, world wide economic development, the growth of a truly "global" market, along with a general peace and security for much of the productive world, has resulted in massive global overproduction and falling prices for many commodities and now even for some manufactured goods. Falling prices are a symptom of insufficient demand or of over production, both of which can cause deflation. Which is generally good for consumers, but bad for producers.......
The end is always upon us to some folks.... but, it's not yet an economic "free fall" it's just another correction, so far. Bad policies, like raising interest rates, undervaluing currencies, dubious "austerity" measures, or other destabilizing fiscal or monetary policies, definitely can make any economy worse, and often have. And, we often seem to be governed by idiots, who will likely test that "bad policy" premise with an evil "gubmint" shutdown in October, further destabilizing world markets, for pure political theater, in order to pander to their respective fringes, but for no real or rational economic reason.
Now for the good news, oil and gas prices are at what appears to be a bottom, after testing these new lows, and though energy prices are also not going to rise much very soon (bad for the fracking belt, RR fracking oil and sand, or coal production), that will be good for almost all consumers from you and me, to RR's, resulting in more purchasing power (2-3 dollar range gas is like a $100 billion dollar "tax refund" going almost equally to every American consumer, and it will reduce energy related costs to businesses (cheaper freight costs, to lower sales travel expenses) raising long run profits.
Remember, the only money (an "abstract" used to measure of relative value of goods) that is actually worth anything, is the money you've already spent, on real stuff......
Is the glass half empty? I the glass half full? Or, as any good engineer can tell you, in actual fact, isn't the glass really twice as big as it needs to be? Where you stand often has a lot to do with your perspective......
So take your gasoline costs savings and go ride a train.....it's good for you and the economy.