On March 11 last year, the World health Organization declared a “pandemic”, one year has passed, although the vaccine has been released, but the global Epidemic has not yet been fully controlled, international air transport is still not out of suspension, the economy has not seen a clear momentum of recovery, but the investment banks continue to boast, covering up the risk of reflation or even stagflation. Recently, the global stock market has been shaken, and the hot technology stocks have been “bear” everywhere.
A year has passed, and now the global public has probably gotten used to “living with the epidemic”, with widespread vaccination, when the epidemic is further controlled, the theme of the next season is believed to be how to fully restart the economy. To this end, the U.S. Congress passed a $1.9 trillion stimulus package, and the public was soon handed $1,400, creating a frenzy of speculation in the stock market again, which has left behind the fear of an early exit from the Federal Reserve and a sudden surge in Inflation caused by the rebound in debt rates, continuing the journey to the top of U.S. stocks, which is by no means worth cheering.
As for China, although the speed of economic recovery last year, but the progress of vaccination is less than the United States, A shares have also recently adjusted significantly, the lips of the Hong Kong stocks inevitably fell, many blue-chip stock prices since the high cumulative fall of more than 20%, the formation of a technical “bear market”, a lot of wealth was evaporated. The current global capital shift, one reflects the stock market funds from the high valuation of the new economy stocks, to benefit from the economic recovery of traditional economic stocks; the second is in the digestion of the U.S. economy in the same period last year, a low base and a huge release of water will be a significant rebound.
The reason why China is difficult to save the market with the United States, mainly because in the context of the financial war, to consider the U.S. stock bubble has been white-hot, once the financial markets collapse, emerging markets are particularly vulnerable, China’s financial stability is likely to be impacted, so not with the United States, but also to take the initiative to adjust the liquidity and stock market rhythm in a timely manner, to avoid overheating speculative wind, exacerbating the crisis. Must know that the times are different, in the employment downturn, there is no government can afford to lose people in the stock market.
As for the United States bold bailout, is emboldened by its position as the world’s largest economy, enough to influence the progress of recovery after the world epidemic, the Biden administration intends to significantly release water again, knowing that inflated currency necessary to pay the price, including the risk of further weakening the credit of the dollar and exacerbate the fiscal crisis, imagine like, when easing in the expected, but the fundamentals can not keep up, two legs walking, a fast and a slow consequence, is bound to servant straight!
Why still do so? It is well aware that the debt problem can not be solved, before soliciting speculation to give the people some money, if China follows the bailout, it is just what it wants, if not, is still dominated by the United States threatening the global economy “sharp edge”. Always the boundary of policy easing and asset bubble limit game has come to an end, the recent stock market turmoil is to show that the critical point must be alert to the approaching. The monstrous “flood” from the U.S. is not going to disappear because the epidemic has receded, and major central banks should try to build a good protection dike to prevent the problem before it happens.
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