Zero Hedge always looks into the structure of commerce, deeper than the financial sector where so many economists stop. It is the flow of goods and the production structures that cause it that matter. Zero Hedge looks at the latest decline in rail road shipments, from an annual decline of 17.1% to 19.8%, computed monthly.
This can be explained with our deflation inflation cycle. At the crash, store closings went faster than goods flow, so we had an excess of inventory in the remaining stores. Now goods flow is adjusting, catching up, to the crash. Basically the dominate factor is the declining dallar and reduction in foreign trade. This catching up helps explains the recent change in price changes from -2.1% to -1.7%. Inventory reductions are occurring in the now shortened consumer supply lines.
The job of the consumer sector is to defeat the energy constraint in the last mile of delivery so that it can again expand.
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