At yesterday’s interest rate meeting, Powell ignored the rise in inflation and was too lazy to follow the fake GDP data. He directly announced that there would be no interest rate hike in November.
You will rest and want to take a nap. People are suppressed by physiological limits, but capital never sleeps. Once the Federal Reserve announces a pause in this round of interest rate hike cycles, the liquidity curbed by the collapse of bonds will come back. If you choose to hedge against prices, CPI will skyrocket, and the Federal Reserve will Another interest rate hike is required.
This time the U.S. national power is greatly weakened, and the financial plutocrats have no courage to launch another subprime mortgage crisis. They have already fallen into the dangerous situation of a three-front war. If the price of U.S. assets collapses, they will have no way to clean up the mess.
Looking at the 2008 subprime mortgage crisis from a macro perspective, it was a crazy harvest of world wealth by American chaebols. Before the harvest, Europe was trampled to death, the East was unable to resist, and troops were directly stationed in the Middle East in the name of anti-terrorism public opinion. , the United States wants to start printing money, and China has 4 trillion to cooperate with increasing productivity to curb prices. Therefore, after QE, inflation did not rise, but prices fell because of China’s massive output of manufacturing.
Although the subprime mortgage crisis has caused the gap between the rich and the poor in the United States to widen and class conflicts to intensify, so what?
Without the rise of the great Eastern powers, nothing would be a problem.
The over-issued currency can be injected into the mobile Internet bubble with almost unlimited capital demand. It is nothing more than a redistribution of global wealth. The United States originally had absolute say and control in the communications and digital fields. Unfortunately, its expansion path was blocked by the big Eastern countries. It was hammered to death. We have just opened a new dungeon. The world is only that big. The expansion momentum of the US empire has reached its peak. If it triggers a financial crisis at this time, it will be difficult to end it.
Logically speaking, the Fed’s interest rate hike cycle that started in 2015 should be accompanied by the global financial crisis. In fact, in 2018, the US stock market was already planning to explode. Do you still remember the scary Christmas Eve that Mr. Sichuan had? Finally, the Federal Reserve ended its tightening cycle early, and President Trump passed new financial regulatory laws to encourage greater leverage.
When the COVID-19 epidemic broke out in 2020, the Federal Reserve once again stepped up its measures. This wave was covered by the epidemic, and the world acquiesced to harming each other. Problems in the global supply chain caused money printing, and inflation rose.
The United States can trigger a financial crisis to resolve the inflation problem, but no one is willing to be a victim.
As a result, the Federal Reserve launched superficial tightening, the U.S. fiscal department stepped up its efforts to release funds, and various helicopters dropped money, which allowed U.S. stocks and U.S. assets to sustain a downward trend.
There are no good things in the world that are both wanted and wanted. US assets will inevitably be unable to hold on until the CPI collapses.
The Eastern powers launched an attack on the US imperialism in the monetary field. What if the so-called US dollar transactions were only denominated in US dollars and eventually settled in their own currencies? Does this mean the world doesn’t need as many dollars? If part of the local currency can be used to fill the space of the US dollar, then many countries will not need to fall into crisis due to a shortage of US dollars and be forced to sell assets at a low price?
This wave of aggressive U.S. dollar interest rate hikes is comparable to the Volcker era in the 1980s.
Volcker caused devastating damage to the global economy, and the U.S. manufacturing industry was completely crippled as a result. However, this wave of Fed interest rate hikes did not cause large-scale negative consequences.
It’s very simple. As the U.S. dollar tightens and de-dollarized trade expands, no one needs so many U.S. dollars. With less demand, tightening supply will not cause serious consequences. The extra U.S. dollars will just flow back to the United States, which will hold up. Inflation and U.S. asset prices.
But the hot money in the world is limited, and the asset black hole caused by interest rate hikes needs to be filled with a huge amount of liquidity.
It’s very simple. The U.S. debt originally worth $100 is now $60. To keep the book looking good, do we have to invest $40 in it?
When interest rates are raised, liquidity problems in the U.S. financial system will arise. Everyone is short of money and has no money to buy U.S. Treasury bonds. As a result, U.S. Treasury bond yields have skyrocketed, which means that the U.S. Treasury Department needs to pay more interest to borrow money. Money keeps the country running.
Then the problem comes again. You have to pay higher interest, but fiscal revenue is declining, so you can only borrow more money to maintain cash flow, so the yield on U.S. debt becomes higher.
The solution to this vicious cycle is simple: end the interest rate hike cycle.
Now the problem comes again. The 40 US dollars that were returned from the world were used to fill the hole, but now they are no longer needed. This means that there are 40 more US dollars in the market. Inflation was already severe, and then inflation will be even more difficult to control. ?
Hyperinflation directly leads to the collapse of credit currency. Everyone knows this truth. How did the gold yuan coupons collapse? After the gold yuan coupons collapsed, Principal Chang had no choice but to become the island owner.
In the 1970s, the United States might have dared to play the trick of bankrupting the U.S. dollar credit and resurrecting itself from the ashes. Does the United States dare to do this now?
When I wrote an article before, I said that the end of each interest rate hike cycle is the beginning of the stock market crash. The reason is very simple. The stock market crash must be used to consume the extra $40 in the market and curb inflation.
But this time the United States does not dare to initiate the triple kill on stocks, bonds, and exchanges. After killing it, it can hang up. When the debt is sky-high, who dares to kill assets?
But there is no solution. Just find a direction and absorb the extra $40.
There is a chance for summit talks” that the United States has only one way to maintain moderate inflation without bursting its own bubble.
Oil prices have been very restrained in the past few days and have not surged up. This is thanks to the goodwill released by the big Eastern countries. Otherwise, China, Russia and Iran would join forces to control oil prices. In addition, due to the consequences of Israel’s outrage in the Middle East, oil prices would have exceeded 100. In a matter of minutes, oil prices will really rise, and there will be basically no solution to inflation in Europe and the United States, waiting for the economy to collapse.
Of course, if this happens, we will be forced to bear the consequences. High oil prices will curb demand in Europe and the United States, or new demand will form in resource countries. However, between the disintegration of the old structure and the birth of a new one, it will have an impact on China’s manufacturing industry. , which is what we are unwilling to face.
But no one will be as stupid as Mr. Nanguo. If you really lead the US empire out of the crisis, they will beat you up as soon as they recover. After all, there are irreconcilable conflicts between China and the United States, unless the United States is willing to give up. Global hegemony, is this possible?
So you see, every time the Americans come over to express their friendship, they will resort to various ways to commit suicide. The United States also has elites, and the elites also know that sticking to the big Eastern countries can solve the current problems, but it will make the problems more serious in the future. .
For the development of wretchedness, we have to look at the fundamentals of both parties.
I have written an article before about China’s infrastructure. Liquidity is water, and infrastructure is digging pools. Whoever has a bigger pool can accommodate more liquidity. When it comes to financialization, what else can the United States sell? ?
So you see, why I have always been so optimistic about digital infrastructure and the digital economy. This is digging a new pool. The old real estate market can no longer drive the economy. Of course there will be pain between the old and the new, but the direction has not been pointed out to you. ?
November is basically the last chance for the Federal Reserve to raise interest rates. If we don’t do so this time, we won’t have to wait for flooding of liquidity in the future.
The opportunity in November is the summit meeting. This is not a matter of a few days or a single topic. If the United States wants to solve the most difficult problem at present, how to get the money to open the government, it must come to discuss cooperation.
I still remember what international money brokers did before the last round of real estate boom. Why did Panjiayuan and his wife make a fortune? How do you think China’s real estate industry soared? What arrangements did international funds make before the rise?
Don’t be ignorant of the real world.
As I said, all the cooperation details have been finalized before the top boss decides to interview.
The United States has surrendered this time. It is more dignified to find a way out than to be kicked down.
Use my favorite Sichuan Bao as a cover, V him 50.