Chapter 61 The interrupted interest rate hike cycle
There are no secrets in a capitalist country.
It didn't take long.
The stock market of a certain country is once again in the green for the long term.
Many stocks that originally fell to the limit have risen to the limit again.
Big money has entered again.
This fluctuating stock price has directly killed a large number of leeks around the world.
Many investors who took advantage of leverage immediately liquidated their positions and queued up on the rooftop.
A certain country originally took advantage of the war between the big country and the two countries to exaggerate the crisis in the Europa continent, harvest the capital of Europe, and start an interest rate increase cycle.
On the surface, the purpose of a country's interest rate hike cycle is to curb high inflation.
That's what officials said at the time, with economic activity and employment indicators continuing to strengthen. Job growth has been strong in recent months and the unemployment rate has fallen sharply. Inflation remains high, reflecting supply and demand imbalances related to the BD pandemic, rising energy prices and
Wider price pressures.
The conflict between Mao and Mao has caused huge human and economic difficulties. The impact on a given country's economy is extremely uncertain, but in the short term, the duration of the conflict may put additional upward pressure on inflation and weigh on economic activity.
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As a result, a country hit its highest inflation level in 40 years.
Over the past year or so, strong growth in consumer demand and supply chain bottlenecks under special circumstances have pushed up inflation in a certain country.
Inflation has become so severe that even the [First Lady] complained about the price of meat.
Of course, from a later point of view, this statement is more of a show. Why does the [First Lady] need to buy groceries by herself?
However, inflation in various aspects of a certain country is indeed very serious, especially food inflation.
Meat, eggs, and milk are essential supplies in residents’ lives. At the end of October last year, the price of a certain type of beef in a certain country had risen to US$16.97 per pound (approximately RMB 237 per kilogram). Four months ago, this type of beef
The price of beef is only US$12 per pound (approximately RMB 166 per kilogram).
Not to mention the price of oil.
A certain country is a car-driven country, and residents are much more sensitive to oil prices than people in China.
After the conflict between the two countries, the price of energy, represented by oil, was like a wild horse, soaring upwards, further pushing up the level of inflation.
The price of crude oil in a certain country soared again to US$115.68 per barrel on March 4, local time, hitting the highest level in fourteen years.
For this reason, a certain country had to start an interest rate hike cycle.
Of course, this is an obvious reason.
In fact, when a certain country starts an interest rate hike cycle, it has another purpose, which is to harvest the world.
A certain country relies on the U.S. dollar, or in other words, U.S. dollar hegemony.
The US dollar is the world's most important reserve currency and settlement currency, and the spillover effect of a certain country's monetary policy is significant.
As they say, "The U.S. dollar is the currency of a certain country, but it is a trouble for the people of the world."
When a country implements quantitative easing monetary policy, a large amount of funds flow to emerging market countries. However, once the Federal Reserve raises interest rates, it will bring huge capital outflow pressure to developing economies, promote imported inflation, and squeeze the policy space of the country.
A certain country absorbs high-quality assets from emerging economies by raising interest rates, passes on its own crisis, and easily "shears sheep" and harvests the world.
The specific model is as follows:
In the first round of "harvest", when facing a major economic shock, large-scale borrowing and money printing were used to stimulate the economy by using the low financing cost of US dollars, while a large amount of US dollars flowed overseas, which was essentially forcibly borrowing money from other countries;
In the second round of "harvest", after excess US dollar liquidity and expectations of economic recovery led to global inflation, the Federal Reserve tightened monetary policy by raising interest rates and other means, objectively prompting the return of capital, and ultimately caused many countries to suffer from hyperinflation and capital outflows.
The double impact has even led to a tragic collapse in asset prices.
In the third round of "harvesting", when asset prices in other countries plummeted, a certain country printed a large amount of money to "buy the bottom" and harvested all other people's high-quality assets.
This has been the case over the years, over and over again.
Judging from historical experience, once the Federal Reserve starts to raise interest rates, the interest rate gap between a certain country and other countries will widen in the short term. The expected appreciation of the U.S. dollar and rising U.S. bond yields will attract international capital to return to a certain country, leading to global financial tensions and rising interest rates.
In this case, fragile economies usually face a dilemma - if the local currency appreciates along with the US dollar, the weak economy will continue to be under pressure due to the loss of export competitiveness; if the decoupling US dollar depreciates, capital outflows may occur.
Of course, a country cannot raise interest rates as much as it wants.
The Fed also needs to weigh the situation based on reality.
If interest rates are raised too sharply, it will seriously harm a country's economy that is in a state of recovery. It will cause enterprises to use capital costs to rise too much, suppress residents' consumption, and deeply harm a country's capital market within a certain period of time, thereby affecting the country's capital market.
The level of direct financing of enterprises.
The worst-case scenario is that instead of boosting the economies of other countries, it crashes its own domestic stock market. This will make other big countries on Blue Star laugh to death and start feasting happily, just like a certain country in
In the 1990s, they happily devoured the Soviet Union and created more than two decades of economic prosperity.
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The Federal Reserve is a seasoned hunter. It has extensive experience in raising interest rates and is better at managing expectations. Through various simulations of ambiguous situations, it blows wind to the market and keeps the stock market running smoothly.
It has been doing pretty well before.
But not anymore.
Why?
Because Wu Siyuan sent a [natural disaster warning] message, which caused the stock market of a certain country to collapse.
The stock market can keep falling or keep rising.
But it cannot suddenly plummet or rise sharply.
During this period, Wu Siyuan also followed the example of a certain country and went to [natural disaster expectation management], repeatedly exaggerating the atmosphere and making various remarks, making the stock market of a certain country feel like riding a roller coaster, extremely exciting.
So far, Wu Siyuan has made trouble in the global stock market through "Four-Armed King Kong", especially in a certain country's stock market, and has made nearly 400 billion US dollars. The price is that the stock market of a certain country has evaporated in a very short period of time.
With a total of five to six trillion US dollars, it is about to collapse.
Under such circumstances, how dare the central bank of a certain country, the Federal Reserve, dare to continue to raise interest rates. In addition, the domestic stock market and economy are directly collapsing, forcing it to enter the channel of interest rate cuts.
It's just that the interest rate hike cycle of a certain country has been interrupted. Now the interest rate is only a few points, and there is not much room for interest rate reduction.
Moreover, after interest rates are cut, capital will flow out and flow to value depressions around the world.
And where is the biggest value depression in the world now?
There is no doubt that China, where the [Chaoqun Group] is located, is the most attractive place.
As a result, China will usher in a new round of economic growth.
And a certain country will be much more passive.
The domestic thunder can no longer be completely suppressed, so it explodes directly.