Author: Kafka is very busy Source: Outlander’s Perspective (ID: hooyar_380097485)
I remember talking to a certain big V about interest rates five or six years ago, when he was advocating for wealth freedom. I said that wealth cannot be free. If you value wealth spiritually, then you cannot be free. Desire has bound your hands and feet. From a material perspective, your so-called deposit interest rate will definitely approach zero infinitely in the future.
At that time, deposit interest rates could still exceed 4%. Is there still such a product now?
Actually, before discussing the deposit interest rate, you need to understand why a deposit requires interest.
Essentially, the deposit interest rate is a reward for deposit behavior.
Why does the Federal Reserve raise interest rates? It is to encourage the return of global dollars to the United States, so that the world can trigger a financial crisis due to a shortage of dollars, and countries can sell assets, making it easier for American capital to cut leeks.
Why has the Federal Reserve’s interest rate hike always been useful, but its power has greatly diminished this time?
Because as countries engage in local currency trading, they find that the demand for the US dollar is not as high, and even the US dollar interest rate hike provides them with an excuse to use the US dollar less. As a result, the US dollar dare not flee back to the United States as crazily as before. In addition, various thunderstorms from domestic banks in the United States, as well as the chaotic operations played by the US government, have caused the US dollar, which should have returned to the United States, to start running away again.
So the Fed’s interest rate hikes are no longer as effective, and the failure of incentive measures also means that the Fed’s position as a global central bank has gradually diminished.
When people don’t believe that you will fulfill the contract, how much interest you can offer will not attract deposits, just like P2P, where people dare to promise a high return of more than 10%. Do you dare to give it money?
In the era of the Gold standard, precious metals as money were absolutely scarce resources, and also easy to keep. It was appropriate for rich people to dig a big hole at home and bury jars of gold and silver.
So by prolonging the timeline, the downside of using precious metals as currency is too great, and it is destined to lead to deflation. Therefore, private lending of 5 cents interest to you is really helpful. Gold and silver are too scarce, and high interest rates are necessary to get someone else’s savings.
Think about it, when did our country start to significantly lower deposit interest rates?
I still remember that in 2010, when the market was short of funds, the interest rate of Banker’s acceptance of city commercial banks could soar to more than 20%. It was stimulating to think about it. Now, the commercial bills that dare to give this interest rate basically mean that the enterprise intends to run away. How many years have passed?
So since when has our capital cost decreased so much?
In fact, upon careful consideration, this is not unrelated to the large-scale popularization of mobile payments.
When precious metals are used as currency by the whole population, currency is very scarce, so it is prone to comprehensive deflation.
When the whole population uses paper money, money is not so scarce, and interest rates are easy to control as a means of control. However, due to the issuance of paper money, it is actually difficult for the central government to grasp the stock of cash. Therefore, it is still necessary to use some means to encourage the people to save money into the system, rather than putting it tightly under their own mattresses.
As currency evolves into a fully electronic era, from mobile payments to digital currencies, the circulation of paper money is gradually decreasing, which means that there are fewer and fewer currencies in a free state, all of which are included in the management system. Is it so important for the central government at the top to store or not?
From this perspective, do you think the future banking system will still provide you with such high risk-free returns?
Why have Japan and Europe engaged in Zero interest-rate policy negative interest rate for so many years? On the one hand, the society has developed to a certain extent, and there is less and less money floating in the financial system, so it is unnecessary to give you such high interest rate. On the other hand, this is the financial system that seems to be very awesome in Japan and Europe, but actually there is not much financial autonomy.
Sovereignty belongs to the Federal Reserve.
The Japanese yen has been known as a safe haven currency for many years, and the Japanese financial market has always been the main lending target for global power. Look at Buffett, he can borrow a large amount of yen at almost zero cost and buy cheap Japanese stocks. Do you think he earns information difference? No, no, no, there’s not much difference in cognitive ability between you and Buffett. What’s worse is that you don’t have Buffett’s power, which has actually been endorsed by the US government. Therefore, he can borrow a large amount of low-priced money without pressure to buy stocks of the top five companies with high returns, perfect arbitrage.
Essentially, the financial system of Japan and Europe has been a cheap blood transfusion tool for Wall Street for so many years.
If there are no decent returns in the bond markets of Japan and Europe, how can you prevent someone from lending their local currency to exchange for dollars for arbitrage?
It’s very interesting that in the past, the management didn’t dare to let the US and China interest rates hang upside down for such a long time. That cliff meant a large amount of “smart money” fled from the RMB and went to the US dollar for arbitrage. Now that we have been hanging upside down with the US dollar interest rates for so long, our monetary policy can still maintain a neutral to loose level, which indicates that the central bank’s ability to manage the RMB has taken another step forward.
The US is still releasing expectations of Canada’s speculation on interest rate hikes, and we dare to lower the return on funds, indicating that the patch for fund flight has been fixed.
Is it necessary to give extra rewards to currency that is well handled?
There’s no need, of course, to lower the deposit interest rate.
A long time ago, some people pointed to the so-called financial returns of a certain treasure, happily calculating how much money can be saved to make oneself lie down and eat interest. Now, how high can you get the interest rate?
Bank wealth management is no longer willing to promise to guarantee principal and return, even so, the predicted yield is still very low, but the balance of residents’ deposits and wealth management is still climbing.
To put it bluntly, even if the Zero interest-rate policy does not hinder the enthusiasm of most people to save money, there is no need to give you a high interest rate.
Many people say that lowering interest rates is unfair to the entire society.
I’m laughing to death, don’t you take a look now? Who is bearing the burden of high interest rates and moving forward? How much savings do ordinary people have? Can the savings cover the mortgage interest on buying a house?
Why did everyone envy financial elites before? Because high interest rates correspond to high spreads, and the market’s thirst for funds is suppressed. Therefore, whoever has the best control over the allocation of these funds has the right to become an “elite”.
A large amount of money has been taken away by the profit eating class, who is suffering?
Some people curse Japan and Europe for their low interest rates, which have caused social development to stagnate. This is a huge joke. Why can’t Japan develop? The money is either taken away from the global allocation by the local plutocrats at a low price, or taken away by the American magnates such as Soros Buffett to play arbitrage and harvest. When the local bottom is short of money, they can only borrow Usury.
In terms of high-end industries, both Japan and Europe are dominated by the United States. There are good companies in Europe, and some American companies are able to acquire them at low prices. Japan is engaged in technology, and it is not bad luck that can make mistakes every time. However, the United States will definitely not let you succeed in the direction you choose, and development will be blocked. Of course, there is no development in society,
The fundamental issue is not the high or low interest rates, but rather the lack of financial and economic autonomy.
What’s even funnier is that some people think that lowering deposit interest rates will inevitably result in a large amount of funds coming to the stock market. Laughing to death, they are here to make money. Do you think A has a profit making effect? Recently, there has been a loss effect everywhere, and people have gone to deposit money in banks. To put it bluntly, they are afraid of risks. Why do you think a little interest can make them suddenly love taking risks?
I actually quite understand the psychology of leeks. In this bottom region, the market is so weak that it is despairing. On the one hand, I am afraid of any bad news to worsen the situation, and on the other hand, I love to deceive myself. If there is a slight disturbance, I want to be a good seller and hope that the market can immediately pull up.
However, that’s all thinking too much. The index is grinding the bottom, and it’s also grinding people. There’s no other way but to endure.
There is only one last trading day left this week, and we hope everyone can continue to remain calm.