Source: wechat official account: Daily Yijian has been authorized
On June 16, the Federal Reserve announced a 75 basis point increase in interest rates, a record since 1994.
Why so hard? Because inflation in the United States rose instead of falling in May, reaching 8.6%, a new record since 1981.
So, Americans took strong medicine. Since inflation has hit a 40 year record, I will use another record – the largest interest rate hike in 24 years to put it out.
Unexpectedly, things backfired. Yesterday, the CPI data of the United States in June came out, which became 9.1%, setting a new historical record in the past 40 years.
The last refresh was last month…
When trump was in office, he set a historical record.
There is a joke like this: “there are only four US stock circuit breakers in world history. The last one dates back to March 16, 2020. Looking back on the last US stock circuit breaker, my memory is still fresh, as if it was yesterday.”
According to the speculation of time, this paragraph should have been circulated on March 17, 2020. People who said this paragraph would certainly not expect that one day later, on March 18, the U.S. stock market broke again. Even Buffett, then 89, said that he had lived a lifetime and had never seen such a scene.
From 2020 to April, U.S. stocks were blown four times. The time of fusing is March 9, March 12, March 16 and March 18 respectively.
Within ten days, the US stock market has blown four times.
This is the U.S. economic record created by trump, but I didn’t expect Biden to be weak.
You trump tossing the stock market, right? OK, then I don’t have much to do. Is it all right to toss about inflation?
As a result, in March this year, the US inflation rate was 8.5%, which was already hyperinflation and would cause many social contradictions.
In April, inflation was 8.3%.
In May, it was 8.6%, setting a new record.
By June, I was no longer satisfied with jumping at the beginning of the 8 character, and directly rushed up to 9.1%.
Seeing this data, I believe everyone, like me, has a sentence in his mind: American pills! Sooner or later, pills!
But as financial we media, we have to analyze in detail why this situation is caused.
First of all, the core CPI of the United States in June was 5.9% year-on-year, 6% lower than the previous value and 5.7% higher than the expected value. It has fallen for three consecutive months, but CPI-U has reached a new high.
Here is a popular science. CPI-U refers to the urban consumer price index, while core CPI refers to the consumer price index of residents after excluding the prices of products that are greatly affected by climate and seasonal factors. What products are greatly affected by climate and seasonal factors? It generally refers to the CPI index excluding the impact of food and oil prices.
The continuous decline of core CPI shows that the main factors leading to the rise in prices are energy and food, and the price rise of other categories is limited.
The rise in energy prices is mainly due to the insufficient capacity of opec+ to increase production and the obstruction of Russia’s oil exports under the conflict between Russia and Ukraine, which makes it impossible for energy prices to fall in the short term.
In this regard, the Americans have to bite the bullet and continue to impose sanctions on Russian crude oil. I really don’t know which tendon Biden is wrong.
After he came to power, he first stopped the exploitation of shale oil in the United States, and then turned around and turned against Russia, leading to a sharp rise in energy prices in the United States.
It’s the first time I’ve seen this trick of “I’ll slap myself in the face, and you’re not afraid”.
In fact, Biden’s doing this is very simple. The exploitation of shale oil is the policy of Trump’s period. After he came to power, of course, he should completely deny his predecessor, so as to show his wisdom and magic as expected by the public!
In addition to energy prices, let’s look at food prices in the United States. The rise this time is mainly due to the high temperature, little rain and drought in the Midwest of the United States, and the expectation of poor harvest of agricultural products this year is high.
Coincidentally, Russia and Ukraine happen to be the world’s two famous grain export ports.
Ukraine is the granary of Europe. How can we continue to cultivate land after war? Russia is also a major grain exporter. Because of sanctions, grain cannot be exported.
You know, the exports of these two countries together account for 30% of the world’s wheat, 20% of corn and 75% of sunflower seed oil. As a result, the exports of these two evil countries have problems because of the war, while the Americans themselves have encountered high temperatures, droughts and poor harvests.
You say your food price doesn’t rise, who will?
It’s a classic saying: Americans once again lifted a rock and hit their own feet.
Therefore, according to the official CPI summary of the United States, fuel prices rose by 98.5% in June, which was the largest increase. The price of new cars rose by 11.4%, ranking second, and the price of food rose by 10.4%, ranking third. The growth rate of other varieties was less than 10%.
The driving factor for the rise in new car prices is the shortage of upstream chips. Excluding new cars and food prices, the main factor is energy. If the United States does not solve the energy problem, then the CPI in July will definitely be in a mess.
The Biden administration wants to solve the problem of energy, which is both difficult and simple. There are only two ways.
First, continue to vigorously promote the development of shale oil.
But doing so is tantamount to following Trump’s old path. You know, trump made a public speech at a rally in Las Vegas a few days ago, criticizing the weak behavior of the Biden government, which led to the soaring crime rate in the United States.
He also put forward the classic slogan of understanding Wang: “make America safe again.”
The reason why trump jumped out at this time and publicly criticized the Biden administration is that the mid-term election is coming soon, and he wants to canvass for Republican lawmakers.
Can Biden relax at this critical moment? He must bite his teeth and hold on.
If, at this time, the shale oil project is restarted.
The political influence can be imagined.
Trump is expected to come out again and make a speech: “cough, no one knows more about oil than me! Biden, you just can’t do it. I will return strong in 2024 and defeat you!”
Therefore, Biden cannot go this way.
Then, there is only the second way left, that is, to find a way to reconcile with Russia, negotiate as soon as possible, and resolve the conflict between Russia and Ukraine as soon as possible.
But doing so also has a negative impact.
Because Congress came out and questioned him, “Mr. President, we have assisted Ukraine by tens of billions. What is the effect? Don’t you say that Russia is our biggest enemy and reconcile with the enemy? What do you mean, treason?”
Therefore, this road must not be taken.
What if domestic shale oil cannot be dug and foreign countries cannot reconcile with Russia?
So Biden went to Israel today to begin his first visit to the Middle East.
It’s easy to go to the Middle East. We mainly look for those oil producing countries to increase production.
Then why should we go to Israel first?
First, Israel is the closest ally of the United States.
Second, Israel and Arab countries have fought several wars in the Middle East, and the water and fire are very incompatible. Biden actually went to the countries in the Middle East to ask for help this time, and his attitude will be very low, of course, he will offer many benefits, so Israel is certainly not willing.
Biden, of course, had to appease his little brother first: “brother, I’ve encountered difficulties recently. I need to talk to those oil traffickers. Oh, give me a face. Stop the air strikes in the Gaza Strip in recent days, OK?”
In addition to finding ways to solve the energy problem.
What will the Federal Reserve do in the face of such record hyperinflation in China?
Hehe, what can I do? If there is more water, add noodles, add water, and harden your scalp to continue raising interest rates.
Now, the possibility of the Federal Reserve raising interest rates by 100 basis points in July has increased to 75%.
I found a thing of special interest.
On March 17, the interest rate was increased by 25 basis points.
On May 5, the interest rate was increased by 50 basis points.
On June 16, 75 basis points.
As a result, in July, 100 basis points.
If it can be achieved, it will be very interesting.
25?50?75?100?
It can play the interest rate increase into an arithmetic series.
The Federal Reserve is the only one in the world…
So we still can’t hold down inflation. How much will we add next time, 125?
In a few days, the boot of the Fed’s interest rate hike will fall to the ground, and we will wait and see.
However, the market has already responded.
First, the day before yesterday, there was a historic moment: the exchange rate between the US dollar and the euro fell below 1, and now it is 0.9996. What does it mean? In other words, the dollar is now more expensive than the euro, and one dollar can be exchanged for 0.9996 euros.
I remember that when I just went to school, one dollar could be exchanged for 8 yuan, and one euro could be exchanged for 10 yuan. At that time, the euro was much more valuable than the dollar.
Unexpectedly, after so many years, the dollar is even more valuable than the euro.
If this trend continues, Europe will really decline.
Not only the euro, according to the latest news: the dollar hit 139 against the yen, a new high since September 1998.
In other words, the dollar has also appreciated strongly against the yen, and it is the kind of skyrocketing.
Why did this happen?
Quite simply, the US inflation has exploded, and it is widely predicted that the Federal Reserve will raise interest rates.
Raise and reduce interest rates again.
Raising and reducing interest rates are common monetary policies of the Federal Reserve and important means of regulating the economy.
Cutting interest rates will lead to the release of a large number of dollars from the Federal Reserve, with the United States as the source, flooding the world. This kind of behavior is also called “throwing money” among the people. In the United States, many social contradictions will be solved and many economic problems will be wiped out because of a large number of new currencies.
Raising interest rates, on the contrary, will lead to the flow of dollars from the private sector to the Federal Reserve. Because of the increase in interest rates, people will tend to repay U.S. debt in advance or deposit money in banks. In this way, the total amount of dollars in the world will be reduced. Of course, this will significantly reduce inflation, but it will also lead to an increase in social contradictions, which may seriously lead to economic recession.
Therefore, when the United States is in economic difficulties, it will cut interest rates and spread money. When its economy is good, it will choose to raise interest rates to avoid inflation.
Cutting and raising interest rates have become very useful monetary means to balance the economic cycle.
However, because of the existence of the hegemony of the United States, all countries need to use dollars for international trade. Therefore, every time the U.S. interest rate hike leads to the return of dollars, these countries will have an economic crisis.
Every time these countries fall, the beneficiary is, of course, the United States.
Europe and Japan, as the two closest partners of the United States, now the United States is in trouble, and of course you have to share it.
Isn’t there a good saying that if you are in trouble, you are willing to do anything for your brother.
It’s good for Americans. If they have difficulties, they should stab their brothers first…
So, having said so much, what impact will the explosion of inflation in the United States have on China?
Of course, I got this news again.
On July 12, according to Reuters, Democratic lawmakers asked U.S. customs officials on Tuesday to explain why the import ban list would be removed for the three Chinese solar energy enterprises Longji, Jinke energy and Xinte energy. According to the Xinjiang related Act (uflpa) issued by the United States last month, the products of these three Chinese photovoltaic enterprises should be banned.
This news should be read in reverse.
This means that the import ban of Longji, Jinke energy and Xinte energy has been lifted by the U.S. Customs and is no longer restricted by the import investigation of the U.S. Xinjiang related act.
Why did the United States suddenly do this?
Because the United States previously announced a ban on the import of photovoltaic products from Chinese enterprises, but because in 2020, 96% of the global silicon wafer production was made in China, Chinese photovoltaic enterprises ate the global market.
Therefore, Americans talk tough and say they want to ban it. In fact, they secretly go to Southeast Asia to import.
Is there a photovoltaic industry in Southeast China? Of course not. Those are all exported from China. After a tour in Southeast Asia, like hairy crabs, after taking a bath, they are not Chinese goods.
Then, Americans imported it again. Although it cost a little more money, after all, their face was saved.
I shouted that I would ban your Chinese products, but in fact, my body is more honest than anyone else. Well, Chinese products are fragrant.
That’s what I’m talking about.
Now, why don’t Americans even want face and import directly from China?
It’s very simple. I really can’t stand it. Inflation is so high and prices are so expensive. Do you still play showering photovoltaic? Forget it, is face important or inside important? Americans finally figured it out.
Therefore, the import ban on China’s photovoltaic products was lifted.
Of course, this is good news. I believe that in the near future, more and more Chinese products will lift the ban, abolish unequal tariffs, and re-enter the U.S. market.
It is good for Americans to buy cheap and high-quality Chinese goods.
For the U.S. government, inflation has at least fallen a bit, which is also a political achievement.
For us Chinese, money has also been made, face has also been taken back, and the tariff war has finally won. It is a reflection of our own strength and a very glorious thing to let the bull roaring Americans bow to us.
However, some U.S. lawmakers, with high wages and high benefits, also used a posture of not eating human fireworks to question the customs about why they want to lift the ban on Chinese products.
I don’t know whether he really loves America or wants to destroy it.
There was such a record in the book of Jin ยท Huidi Ji:
The emperor tasted the sound of toads in Hualin garden and said, “is this person official or private?”
Or say, “it’s official in official land and private in private land.”
And the world was in chaos, and the people starved to death. The emperor said, “why not eat minced meat?”
Sima Zhong, the emperor of Jin Hui, once played in the Hualin garden. When he heard the croaking of toads, he said to his attendants, “is it official or private?” The attendants said, “this calling thing is official in official land and private in private land.”
At the age of famine in the world, the people starved to death. Sima Zhong even asked, “why don’t they eat meat porridge?”
“People have no corn to satisfy their hunger, why not eat minced meat?”
Yes, well, why should the United States lift the photovoltaic ban? You can also generate electricity for love.