Without landing, the after-effects are terrifying.
If there are not many cruel words, the Americans definitely are.
We're having a holiday, and here in the U.S., we've released the CPI for January, and we've said before that this time the data is all sorts of better-than-expected.
What does that mean? Just look at the recent fluctuations in various types of overseas assets** to see clearly.
This means that everyone is once again speculating about the Fed's determination to fight inflation, that is, to keep the dollar strong and interest rates high for longer.
There is no possibility of a rate cut in March, so let's wait for June.
Therefore, after the holiday, our domestic financial environment is actually more helpless, which must be seen forward-looking.
Why do we emphasize that there is a lot of moisture in this?
Because, in 1983, the Federal Reserve adjusted the statistical method of CPI.
Prior to 1983, the largest CPI weighting of rentals (almost half of the weight) was based on the actual rental ** index. As a result, the higher the federal interest rate, the higher the rent and the higher the CPI.
That is, judging from the data at that time, the more interest rates are raised to fight inflation, the higher the inflation, is this worth it? So, it has to be adjusted.
This is done by using sample interviews and asking those landlords how much they expect their rents to increase. This subjective data is then used as the main statistical value of the largest weight of housing rents in the US CPI.
You see, objective data becomes subjective data, and data obtained in the form of questions and answers. You only need to change the way you ask, the tone, the guide a little bit, and the data you get will be completely different. Although everything seems so scientific, the CPI in the United States can be manipulated.
If the moisture of CPI is a key lower limit in this round of sniping China's financial war, then Wall Street here provides another upper limit, embarrassingly blowing that the United States has entered a new era of scientific and technological innovation.
Today, the most fierce rise in the U.S. stock market is the "Seven Sisters", the ** of seven technology companies. Other U.S. stocks are generally weak, but these seven companies are terrible.
By boasting about the future of reshoring manufacturing, the AI revolution, and technological innovation, we will convince funds around the world that they can reap huge returns in the future by handing over their money to the United States.
As for the stubborn, then use the conflict of geography to force you to comply.
Therefore, the routine of this round of financial warfare is very clear:
CPI manipulation.
Geopolitical conflicts. Forcing you to hand over your money to the United States.
Scientific and technological innovation publicity.
Tech stocks skyrocketed.
Guide you to give the money to the United States.
Guys, did you suddenly find out that this thing is the same as how many places used to sell health care products to the elderly?!
If you don't buy it, what should you do if you have health problems in the future?
If you buy it, there are all kinds of benefits, and the little brothers are saying that it is the latest high-tech research and development products.
The high-end leek bureau often has the same underlying logic as the pig killing plate, the difference is that this layer of skin can really blind many people's eyes.
The main driving force behind this round of US CPI increases is the sharp rise in rents, and we mentioned the manipulable space in this above.
In fact, there is another reason, that is, the Democratic Party's financial fathers and entrepreneurs want to bring in more illegal immigrants to drive down labor costs. However, these people also have to find a house to live in after entering the United States?! Therefore, it is also an indisputable fact that illegal immigrants have raised the rent of houses.
As a result, the US politicians we see today are constantly trying to solve the problem of the sustainability of Treasury financing. However, the battle between these initiatives is very serious.
First of all, in order to ensure that the wealthy chaebol can continue to obtain high returns, it is necessary to give some benefits to citizens to avoid citizens from making trouble, which raises the labor cost of local citizens.
Second, the labor cost is too high, so it is necessary to bring in illegal immigrants to hedge, but this makes the rent of the house supportive, and it is difficult to resist inflation.
Thirdly, high inflation can be used to keep interest rates high, and it can also harvest China externally, and it can also circle the world's money to fill the hole in the national debt. However, the global economy has entered an era of confusion, and it is not easy for everyone to live. At this time, the ** of other countries will be serious, so it will be necessary to increase the budget to strengthen global domination, and even strengthen decoupling from China.
However, the supplementary budget means that the expansion of the national debt will be doubled, and the decoupling of China will mean stubborn inflation in the United States. Obviously, this is the decline in internal governance ability, which will affect the eating and drinking of wealthy families. To ensure that the wealthy can eat the monopoly rent for a long time, in addition to maintaining the skyrocketing price, it is also necessary to erect an imaginary enemy to the outside world. However, you also said that you want to give benefits to citizens, and you can't just say that there are bad people out there.
As a result, we continue to see that the above logical chain is constantly strengthened, and it cannot be stopped.
Everything is based on the continuous expansion of U.S. bonds as the carrier and bottom line, but U.S. stocks are the cornerstone of guiding all parties to join U.S. bonds.
The issuance of the U.S. dollar is anchored to U.S. bonds, and the reason why people in other countries want to buy U.S. bonds and the U.S. dollar is because U.S. stocks are rising. Only when the U.S. stock rises, everyone is willing to hold the dollar, and they are willing to increase the excess idle funds to a part of the U.S. bonds.
Thus, we see a huge "consensus" of the American economy:
U.S. stocks must rise, and the "Seven Sisters" must rise.
If it doesn't rise, then the consensus will collapse, which will affect the entire game, and even the stability of the United States and American society.
U.S. equities provide excess returns, U.S. Treasuries provide the safest asset, and the strong dollar in anticipation of Fed rate hikes connects the two to form a closed loop.
As for how can U.S. scientific and technological innovation really lead the global economy to prosperity again? It doesn't matter, as long as global money believes it right now.
It is clear that the current US financial signal light has failed.
Everyone knows that if the scientific and technological revolution had already appeared, the US national debt would not be like Ponzi ** like it is now, and even the interest would have to be repaid by borrowing new debt.
The best example is that the high inflation and high debt of Bush Sr. were all solved in the wave of the Internet revolution after Clinton took office. Moreover, for the first time, a fiscal surplus was achieved.
AI may be the economic growth point in the future, but it is far from this at the moment, and the difference is too far.
With 5The 5% deposit interest rate has exploded the economy of a large eastern country; Use the Russia-Ukraine conflict to hit the euro. These are all crucial!
Outside of the United States, the eurozone and the Chinese economy are the most bullish.
If neither of these economies can work, and neither will their currencies, and the United States can directly order the control of the Bank of Japan, then a strong dollar will be easily achieved.
This has nothing to do with economic laws and financial signals, and the main focus is "coercion and inducement".
At this time, U.S. technology stocks skyrocketed, which is the most important pillar of faith in financial warfare.
Therefore, there is a high probability that the Fed will choose "no landing" in this round, rather than a soft landing or a hard landing.
If you don't land, it is to maintain high inflation, high growth, hot consumption, and hot employment.
In our economic history, this is called "overheating", and the entire 40 years of reform and opening up have been a stage of economic development that we have been very careful to face. Because, once it continues to "overheat" and the bubble really bursts, it is not a joke.
However, the United States has decided that the big guy only looks at the short term, and the father of the money behind the big guy only looks at the short term.
In fact, after the outbreak of the Southeast Asian crisis, under Clinton's hint, it was clear that the United States should also control the technology bubble at that time, and Greenspan, then chairman of the Federal Reserve, was deliberately letting it go too far.
As a result, everyone saw that the bursting of the Internet bubble in March 2000 forced George W. Bush, who had just come to power, to encourage everyone to speculate in real estate. The real estate speculation laid the foundation for the subprime mortgage crisis in 2008. To a large extent, the financial chaos we are seeing today is a bitter legacy of the subprime mortgage crisis.
So, what about this time?
Since the beginning of the 80s, the US financial market has generally had a wave of ** within 7 to 10 years, and then gradually come out of the predicament.
However, after the subprime mortgage crisis, the bigwigs in the United States tried every means to break this restriction.
Even if the U.S. stock market circuit breaker in 2020, the bigwigs in the United States will have to make all kinds of things to delay this time.
Therefore, after the subprime mortgage crisis, the financial risks that really caused more harm were wrapped in a larger bubble in a very short period of time.
Think about it, wouldn't it be scary if this thing had three long and two short, and various risk bubbles that had accumulated in it for more than 30 years?
We'll see.