Recently, I've been wondering if inflation is coming in again
Let's take a look at the Mandarin Commodity Index, which has been following a trend since it peaked in September last year, with 3-4 times during the period, and the duration has been close to 5 months. From the point of view of time and space, I have reason to doubt this.
From a fundamental point of view, there are also some good stimulus factors, first of all, the domestic economy was very poor last year, and this year there are some counter-cyclical adjustment actions, and the economy may recover.
In addition, in 2023, the central bank's balance sheet will be expanded by 4 trillion yuan, of which claims on depository companies (about equal to unanchored) will increase by 42 trillion. In comparison, from 2014 to 2022, the central bank's balance sheet has expanded by 7 trillion yuan in 8 years, with an average annual expansion of less than 1 trillion yuan.
In addition, the dollar has entered a cycle of interest rate cuts, and all countries are still very good, and the balance sheets of households and enterprises are relatively healthy, especially in the United States, which is another year and continues to maintain an expansionary fiscal policy, which means that money has to be printed. In this case, the global economy is in a big cycle of interest rate cuts, and there is a possibility of returning to inflation.
From the perspective of inventory, in July 2023, the U.S. PPI bottomed out and rebounded, entering passive destocking, and the total inventory in December was 044%, the first time after a continuous decline in the past 17 months**, the previous value of 031%；Total sales in December were 220%, after a short fluctuation to maintain the upside, the previous value of -082%。The United States seems to have entered the stage of active replenishment.
The actual inventory of domestic industrial enterprises has been declining for a long time, and it has long entered the stage of destocking, and it is easy to enter the replenishment stage in the next stage, which will bring a round of excellence
The most important thing is that now except for some varieties, in fact, most varieties are either in a state of meager profits or in a state of loss.
For example, it has been about 1 year since pigs have been in the industry-wide loss, and lithium carbonate has also increased from a high of 600,000 yuan to about 100,000 yuan. The ** of agricultural products is also **, the ** of gasoline is also in a relatively low position, and the United States still has hundreds of millions of barrels of inventory that has not yet been replenished, and it is easy to **.
Recently, OPEC+ agreed to extend the current ** restrictions until the middle of this year to avoid overcapacity, according to unnamed representatives. On paper, the cut is about 2 million barrels per day.
Why is it important to lose money?Because long-term losses are unsustainable and no company can bear them, after the loss, there will be changes to reduce the situation, and then there will be a demand recovery. If everyone is still making money, there is no such thing as eliminating backward production capacity, after all, everyone will carry it.
So, is it necessarily a lot of turns? Not necessarily, there are many limiting factors. For example, the sequelae of domestic real estate are still relatively strong, and there are still some retained projects in infrastructure last year, and now the country is also aware of the problem of excessive infrastructure and has begun to restrict projects in this regard.
Overseas, the unfavorable factor is high interest rates, once inflation has a **, interest rates will form a serious constraint, therefore, domestic and foreign policies are relatively conservative, it may be difficult to have a large ** in the short term, and it is more likely to be structural**.
Some commodities that are still at a high level may usher in, while some commodities that are already relatively low may be. In short, in the short term, commodities may be more important than their own.
However, as far as the current market price is concerned, it is still necessary to start to change the way of thinking, the past 5 months are very good for the bears, but with the continuation of the **, the cost performance of most varieties of longs has exceeded the shorts.
Remember, don't go short on the low, don't go long on the high! There is no absolute long and short, only cost-effective!