Let's cover the some of macroeconomic numbers, which Dawn Bennett has discussed are vital to the health of the economy, but have been indicating a negative trend in the markets and what they mean. First, we have the lowest U.S. oil rig count in years and this number has been nose diving for the past 14 weeks. This means we have oil companies losing money and workers at oil fields being put out of work. This is happening because of the drop in the price of a barrel of oil which is partly because of Saudi Arabia artificially lowering the price of their oil in order to eliminate competition. These jobs which we are losing are high paying and important for the U.S. economy. While the White House may be right when they say its bringing relief to people at the pump, the economic toll it is having on people's lives and their families is massive.
Another major number that is down is the inventory-to-sales ratio. It has reached record highs equal to the time of the Lehman Brothers collapse and this means retailers have an abundance of stock on hand which they're unable to sell. Next up is the Baltic Dry Index and this measures the cost of shipping on the world's largest cargo ships. Right now this index is also at a record low – it is down roughly 60% from last year. This means trading globally is down and this is causing losses in the billions for shippers and companies connected with them.
Bank of America Merrill Lynch is reporting that the U.S. dollar is continuing to strengthen, in fact it has just had its strongest quarter since 1992. While that may be good for imports and those looking to travel overseas it is bad for American exports. This time of continuous growing strength in the American dollar also often equates with major geopolitical and/or financial distress. Many other major economies around the world have been struggling over the last few years and have looked to shore up their investments with buying American dollars but this is creating an unstable and overbought dollar.
Dawn Bennett has been adroitly explaining these issues for some time now, and it appears more investors are finally beginning to realize the railroad fooled them and the train isn't one they want to be riding. The question now is can we repair the problems and avoid this economic storm or lessen it? And lastly, how can investors best prepare and invest knowing that all of this instability exists in the markets despite the stock market being an inaccurate reflection.
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About Dawn Bennett
Dawn Bennett is CEO and Founder of Bennett Group Financial Services. She hosts a national radio program called Financial Myth Busting http://www.financialmythbusting.com
She discusses educational topics and events in the financial news, along with her thoughts on the economy, financial markets, investments, and more with her live guests, who have included rock legend Ted Nugent, as well as Steve Forbes and Grover Norquist. Listeners can call 855-884-DAWN a as well as take podcasts on the road and forums for interaction.
She can be reached on Twitter @DawnBennettFMB or on Facebook Financial Myth Busting with Dawn Bennett or firstname.lastname@example.org