An economic recovery cannot occur without a significant rebound in global trade. Global trade cannot be revived without a recovery. The difficulty in this relationship goes far beyond semantics. Governments have been pumping gigantic amounts of money to revive global economic activity, and businesses are responding as liquidated inventories need to be restocked, and industries must restart producing some goods. But how long can they keep producing if trade itself cannot be revived somehow? And can government intervention, and similar artificial means substitute for the absence of real private demand in an economy? These are the questions that the drivers of the supposed bull market, and heralds of the new age of economic resurgence must answer.

Last year's collapse in shipping and trade volumes was nothing short of catastrophic. Machines that were hauling tens of thousands of tones of cargo were suddenly kept busy with hundreds. Shipping rates suffered falls close to an unlikely hundred percent in some cases. This year has seen trade volumes hold their ground a lot better, and overall activity by value has not changed much between January and today. Government intervention in export credit and insurance business ensured that the sudden shock of September-December did not translate to a global meltdown of the financial system, and that much is good and desirable. However, while the symptoms of the global economic malaise were thus successfully dealt with, the dynamics that created the large shock for trade have not been addressed, and they must remain a major source of concern for bulls and politicians alike.

During the past two decades we have seen China rise from being a closed, poor third world country to becoming a major, and powerful player on a global scale. It is very well known that the excesses which fueled the subprime crisis in the U.S., (which in turn created today's global economic slump) were financed by Chinese money acquired from export activity as part of the global trade boom. At its worst, there was a vicious circle where the Chinese sold to the American consumer to lend back to them, so that they could sell more. That was how we got oil to $150, the stock market to $15000, while waging wars in Iraq and Afghanistan and avoiding inflation at home. Today the Chinese can't sell to American consumers, who are saving up to 5 percent of their income each year to ensure against unemployment and economic shocks. If the Chinese can't sell to America, who will purchase their goods? If trade doesn't grow, who will finance the new future bubbles that global governments want to create to save their hindquarters from angry voters? If bubbles can't be blown, who will sustain today's bull market?

Yes, markets are rallying for now, and people are more optimistic. But let's not be blinded by our emotions. Six-eight months is not a long time period for economic events. Recessions and slumps do not last forever, but they do last until the forces that created them are eliminated, or new factors emerge to revive economic activity. We're afraid that until someone finds a way to address the problems created by the evaporation of the illusory wealth of the American consumer, a real recovery, and a real, sustained bull market are but sweet fantasies of emotional people.