• Global shipping company Maersk is warning that shipping volume is low because warehouse inventories are high.  The goods are unsold.
  • (Reuters) – […] CEO Vincent Clerc said he saw no sign that the destocking which has curbed global trade activity would end this year.
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  • USPS DATA – First-Class Mail revenue increased $221 million, or 4.0 percent, on a volume decline of 678 million pieces, or 5.9 percent, compared to the same quarter last year. Shipping and Packages revenue remained relatively flat while volume declined 41 million pieces, or 2.4 percent, compared to the same quarter last year.
  • Marketing Mail revenue decreased $333 million, or 8.8 percent, on a volume decline of 2.6 billion pieces, or 16.0 percent, compared to the same quarter last year. The Marketing Mail decreases were driven by the continued decline in advertising spending due to economic pressures experienced throughout most of the fiscal year, a higher inflationary environment affecting print media production costs. (link)
  • So, let’s put it all together….
  • Consumers did not buy stuff.  As a result, spring inventories were high.  Purchasing managers forecast weak sales. Summer purchase orders were very low.  Shipping companies reflect declines in shipping because the purchase orders were low. Advertising and marketing budgets were cut to meet the decrease in consumer spending.  Consumers are not forecast to spend this holiday season.
  • Keep in mind, this is all intentional.  This is all part of the outcome from “managing the transition” to a new energy economy.
  • As you are well aware the various western nation central banks including the U.S. Federal Reserve, are raising interest rates into a global economic contraction, a drop in demand.  Raising interest rates into a contracting economy is counterintuitive, it runs against the expressed interest of government to grow economic conditions.  However, there is a purposeful design to the contradiction.  [A TLDR Version Here]
  • Economic contraction is the lowering of economic activity.  Raise interest rates -in a general sense- and businesses invest less, borrowers borrow less, consumers purchase less, employers expand less, and the economy overall slows down. When the economy turns negative, meaning less products and services are produced, we enter a recession. Some businesses and employers do not survive a recession and subsequently unemployment rises.
  • During recessionary periods people buy less stuff, people have less income stability, and economic activity drops.   Recessions are bad for middle-class and working-class people.
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Source: theconservativetreehouse.com