On September 10, the land was thunderous. The State Administration of Foreign Affairs announced that, with the approval of the State Council, it decided to cancel the quota limit for qualified foreign institutional investors (QFII) and RMB qualified foreign institutional investors (RQFII). This is the largest period in China's opening up to the outside world.
According to media analysis, it is estimated that the proportion of foreign investment will eventually reach 20%-30%. At present, according to the data of the central bank, the proportion is still less than 2.5%. That is to say, there will be 8-12 times of upside in the future.
The opening of China's financial market is the outpost of the RMB corner overtaking.
We say that looking at the trend of investment, as long as you pay attention to the money of the rich people, you will know whether your judgment is correct. Hong Kong's large-scale quantitative investment private equity fund received the entrusted investment intentions of several large European and American family offices on the day when the relevant departments canceled the QFII and RQFII quota limits. This sensitivity is certainly not achieved overnight, but is a result of long-term accumulation.
These large European family offices have already learned about new investment opportunities since the 24th A share last year. A-shares and RMB bonds have been included in the international mainstream indexes such as MSCI, FTSE Russell, S&P Dow Jones, and Bloomberg Barclays, and have steadily increased their weight. For large capital, the attractiveness of A shares is much higher than that of US stocks.
The QFII and RQFII quota restrictions have been abolished, meaning that over one trillion foreign capital will enter the A-share and RMB bond markets, and subtle changes in the market are changing the direction of the tide.
In fact, overseas markets have a wealth of long-term RMB swap OTC transactions, which can be selected from 1 to 5 years. This means that these European and American family offices can first lock the exchange cost of RMB and US dollars abroad, and then use RQFII to enter the Chinese A-share market to carry out medium and long-term value investment.
So I mentioned in the article "What will happen to the digital currency in the next three months?" China's active depreciation is to give traditional financial capital a choice by pulling the renminbi into the deep waters of the global capital market. In exchange for global capital ebbs from the waves of the dollar, flowing to the renminbi. If even the smart money is constantly bargaining in the process of the renminbi's active decline, what reason do you have any confidence in the future of the renminbi?
I have been telling everyone that we have always seen that the movement of any event is not a single-point action. It must be a combination of punches, which is coherent and consistent. From the Belt and Road in the past year to the cancellation of qualified foreign institutional investors (QFII) and RMB qualified foreign institutional investors (RQFII) investment quotas, the process of RMB from release to receipt has been completed. The wisdom of Chinese tradition is the wisdom of Tai Chi. I have you in me, and you have me.
The Belt and Road Initiative takes the renminbi out and travels to various countries to help them retain their young people, build infrastructure, and complete industrial upgrading. China is a member of the All-China Federation of the Belt and Road through the power of state capital. I invest, you are born, and everyone shares the dividend of growth.
At this time, as long as the restrictions on foreign investment in the renminbi are relaxed, there will be a huge wealth effect. From the perspective of the secondary market, it is more likely that the future renminbi will be a process of gradual bottoming out, bottom volume, and rapid pull-up. This process will be accompanied by the global economic crisis triggered by the collapse of the US dollar and US stocks, thus completing the cornering of the RMB against the US dollar.
It is not enough to put the light from the release to the retreat. To form a closed loop and complete the curve overtaking, a key piece is needed. This piece must have several conditions: a mature market that traditional funds can rely on, which is in line with European and American trading habits; a large number of mature investors in global fixed income and currency transactions; and a post-trade financial service with the core of global asset transactions, such as liquidation and settlement. Infrastructure; it is also a mature currency sales channel.
Speaking is: there is a strong enough spot depth, a reliable futures contract, a mature OTC market, and a sufficiently broad monetary consensus group.
The answer is coming out: According to Xinhua News Agency, the Hong Kong Stock Exchange announced on September 11 that it has proposed to the board of directors of the London Stock Exchange Group to merge the HKEx with the London Stock Exchange.
According to the terms of the board of directors submitted by the Hong Kong Stock Exchange regarding the proposed transaction, this will reflect the value of the total issued and issued common stock of the Stock Exchange of approximately 29.6 billion pounds, reflecting its corporate value of 31.6 billion pounds. The HKEx plans to place the shares of the Hong Kong Stock Exchange on the second floor of the Stock Exchange when the proposed transaction is completed to show the confidence of the HKEx in the UK. The Hong Kong Stock Exchange said that the merger with the recommendations of the Stock Exchange is a major strategic opportunity for mutual benefit and win-win, and can build a leading global financial infrastructure.
At this time, I don't know if you will have a deeper understanding of the renminbi that I mentioned in my previous article will depreciate to 7.84. The Belt and Road Initiative was an important initiative proposed by the state in September 2013. The exchange rate between the RMB and the US dollar was only 5.9. Almost at the highest level of the renminbi, the capital was thrown out with the will of the state. At that time, there were still many voices that were not understood in China. The exchange rate slowly and steadily fluctuated in the following years The renminbi remained at 6.15 until the global economy entered a recession in 2017. This is almost the last happy time of Chinese real estate. In 2018, Trump triggered a Sino-US game, and the renminbi began to depreciate a round of depreciation until the exchange rate was lowered to 7.18 last month.
By opening QFII and RQFII to expand the channel for overseas capital to enter the renminbi, it will continue to fall for washing. Unwilling capital will be cleared out. Through the merger of the Hong Kong Stock Exchange and the Lunjiao Exchange, the depth of the global market of the RMB will be completed. After the whole process is completed, the final bottoming will be carried out, 7.84. This time is also the strongest wave of global financial tsunami.
At this moment, only the willingness of overseas capital will survive the quilt stage, and the most intelligent large overseas capital will be copied from the bottom. At the same time, the Hong Kong dollar as an offshore renminbi completed the docking with the renminbi, and the merger of the Hong Kong Stock Exchange and the Stock Exchange completed the docking of offshore renminbi and global capital.
When the RMB has a bottom volume and a rapid rebound, the left-hand trader of overseas capital has completed the process of establishing a consensus from uncertainty to certainty. And the right traders began to move from caution to consensus. Faith is born.
The Hong Kong incident mentioned in "On the Way Out between China and the United States and Bitcoin" is a microcosm of overseas capital watching the game between the renminbi and the US dollar. When the signal appeared, the smart gambler had already started betting.
Looking back at the other side of the globe, just last weekend, a momentum indicator tracked by JP Morgan Chase showed that the same indicator of the S&P 500 index reached its maximum positive value on the same day that the price momentum indicator of the US stock market reached its maximum negative value. That is to say, the performance gap between small and medium-sized companies and large companies in the US stock market has set a record.
This divergence indicator has only appeared twice in the history of US stocks, one on the day before the US stock market crash in 1973, and the other on the eve of the February 1999 tech stock burst. The current low beta coefficient (low volatility) has become one of the most crowded deals in the United States due to its high valuation and high macro risk exposure.
Will the US stock market collapse immediately? I tend not to. Time has not arrived yet. The uncertainty of US stocks and the accelerated inflow of overseas capital into RMB, A-shares and RMB bonds will strengthen the risk sentiment preference of global financial markets in the next three months.
That is to say, there may be a short-term decline in safe-haven assets, and risk assets such as China's A-shares will continue to rise.
Bitcoin and gold will deviate again.
In my article "Your Question: Why Bitcoin Plunged", I stated my point: Bitcoin is a safe-haven asset in the digital currency market, but it is far from being a safe-haven asset in traditional financial markets. That is to say, in the next three months, Bitcoin will have a risk appetite preference in traditional financial markets, especially after the opening of the Bakkt exchange.
This undertakes the logic in the article "On the Way Out between China and the United States and Bitcoin": The renminbi will complete the overtaking of the dollar in the human stock money market, and the capitalist of Wall Street is precisely when the two giants of the human world have no time to take care of it. , homeopathic growth of the machine network.
In the last article, I proposed that the Digital Gold Reserve Act, which may appear in the United States in 2023, caused a huge controversy. Many people wondered how such a possibility might arise. Some friends are asking why they don’t re-mark the gold? When we re-recover the entire development process of gold 90 years ago, it is indistinguishable to discover the essence.
The United States' eight major chaebols, the president, first demanded that gold be nationalized, and that it would be strongly absorbed at the bottom of the gold price through administrative means. After that, gold doubled in the next year, that is, the dollar depreciated by half against gold. By the end of 1934, the US gold reserve had more than doubled in 1933. The “consensus” brought about by violent pulls is always the fastest, because the nature of human beings cannot be changed.
Afterwards, an agreement was reached through the war to bring large amounts of gold from other countries to the United States for storage. In fact, it is the completion of the soft lock in disguise. At this time, you can slap the emperor to make the princes, and in turn violently raise the dollar. And when this process, which lasted for decades, has come to an end, the important reason why it cannot be maintained is that countries around the world have become increasingly reluctant to trust the US economy and have to withdraw gold and return it to their homes.
After nearly a hundred years, gold has become an increasingly fragmented market and it is difficult to be controlled. The other most important reason is that the number of gold produced by large US mining companies around the world is getting smaller and smaller. This is a reason with Bitcoin, the mining company is the power pool. The earlier it is, the more control it has for gold and digital gold, and the lack of control over the later stages.
Bitcoin is the most fair game currency in the digital currency market, but there is still a large amount of information recognition in traditional financial markets. The most important thing is that the US government has the largest amount of bitcoin. The purpose of the Bakkt exchange to hedge the futures is that the bitcoin bookmakers on Wall Street have to squander the bitcoin into the US trading pool.
The total amount of Bitcoin 21 million is deducted from the early disappearance of the inability to be taken out and lost in the history. It is estimated that there is no more than 16 million available for trading and circulation, and the amount that has not been produced after 4 years of halving period is deducted. It is estimated that the real available for trading is around 13 million. Do you think that 4 million bitcoins can complete the control?
The US government has more than 1 million in hand, and the Bakkt exchange has washed 1 million in the next one to two years. The two colluded, and the digital gold reserve bill doubled the total number. Just 4 million bitcoins. In the traditional stock market, 30% of the heads with sufficient depth of the headline can be controlled without the dew, not to mention the bitcoin market.
A subject that can reach the consensus of the whole world, with stories that last for hundreds of years, can make humans produce "hope". There is very little room for choice. So if I were the last big crocodile of the eight major Wall Street consortiums, I would have heard the sound of money ringing and once again washing the voice of global capital.
Only this time, the process of the story has joined a new protagonist, called the renminbi. The machine network does not exist for a certain individual or a certain country. It does not need to obey human beings, but completes the self-evolution of the network through human beings. Soon, we will hear the horn of the war.
There is only one point to be skeptical: any drop in Bitcoin is a great opportunity to change your destiny, not to fall before dawn.