World Trade Under Maximum Stress

Most folks in most countries have felt at least some of the brunt of the world financial slow down. It has not been a pretty sight at all. Trade between nations has literally come to a standstill, its causing problems everywhere. It’s a crisis of epic proportions and it’s a lot worse outside the United States than it is within our borders.

Regarding World Trade; cars are overfilling lots at the ports and cargo containers are stacking up around the globe. Retail Sales without a stimulus to consumers will mean many more box store retailers and anchor tenants will leave shopping centers. The 2008 Christmas Retail Season was a disaster and the International Association of Retailers predicts the closing of at least 73,000 stores in 2009.

Retailers were looking to “gift cards” and loyalty cards to help sell more during Christmas, along with online sales, but changes in accounting rules on “gift cards” and future regulations on escrow accounts came into play as consumer groups demand legislation, in case of bankruptcies. Same with Airline Miles, as credit card companies that guarantee consumers that they can re-book on other airlines, but may choose not to.

Meanwhile consumers are still charging up against their card balance limits and credit card companies are cutting people off. Retail employs the second most number of people, next to the service industry. Much more than manufacturing which is under 10% now. A large department box store might employ 250 or more people.

More job losses mean more foreclosures, and did you know that with all foreclosures in the US, that crime is also on the rise? Crime increases as foreclosures increase, and they have a direct relationship. When foreclosures increase 1% it causes a 2.8% in crime rates. With things tough in the US with the middle class, they have stopped buying.

Thus, all those products they normally buy that are made all over the world are not needed, so, we see trade flows grinding to a halt, hurting all the trading partners of the world. As this is a Global Economy and we are all inter-connected now. Think on this.

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