2012: Year of Crisis

The shipping industry is expecting a "year of crisis" as the supply of ships is expected to increase dramatically again, during a time of excess supply already. To me, this represents another proof point that capital is not being allocated efficiently in the economy due to inexpensive financing and aggressive monetary policies. While the monetary policies may boost the prices of financial assets and commodities for a period, at some point the building inefficiencies likely overwhelm the ability of the central banks. Either that, or we start printing money and flirting with hyper-inflation. In short, Sagflation - volatile prices combined slow-to-negative real economic growth.