The Federal Reserve announced the interest rate decision, announced a 25 basis point rate cut, and the interest rate range fell to 1.75% to 2%.
As early as September 12, the European Central Bank has announced interest rate resolutions, announced that the deposit rate will be lowered by 10 basis points from -0.4% to -0.5%, while maintaining the main loan interest rate unchanged at 0%, maintaining the marginal lending rate at 0.25% unchanged. In addition, the European Central Bank decided to change the interest rate policy guidelines and announced the restart of QE.
The day before yesterday, the Federal Reserve released a message to cool the money market, inject tens of billions of dollars in liquidity to reduce short-term interest rates, and said it will continue to invest $75 billion. How ironic it was this behavior since the subprime mortgage crisis in 2008.
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The crisis 12 years ago is still vivid today. The crisis is not without warning. Capital has evaded supervision for the benefit of the false prosperity in the US mortgage market. The financial innovation of subprime mortgages has blown the bubble. From August 9, 2007, BNP Paribas announced that it has frozen three subprime investment funds and announced the subprime crisis. On September 15, 2008, Lehman Brothers bankrupted to detonate the global financial tsunami, and then on May 7, 2009. The Fed’s stress test on 19 financial institutions and the most difficult time to declare the US banking industry have passed, in total, taking 640 days.
When we look back at the story of the beginning of the crisis in 2007, it is always very easy to see the coincidence of history.
On August 9, 2007, BNP Paribas suddenly disclosed its huge losses in US subprime mortgage securities and announced the freezing of its three investment funds in the US subprime market. London interbank lending rates soared and the European peer market collapsed.
Worse, the conservative European Central Bank announced that it would lend to any bank in need at an discounted price. This is an unprecedented move to inject liquidity into the banking system. This news instantly induced market panic as investors began to realize:
The so-called subprime loans and structured credit products with extremely high ratings are subject to significant losses.
On August 10th, the Federal Open Market Committee (FOMC) held an emergency video conference. The Federal Reserve announced that it would inject $24 billion into the financial market to increase liquidity and said it would continue to invest in the US dollar. On September 19, 2007, Bernanke, then chairman of the Federal Reserve, announced a rate cut. On the day of the announcement, the remarks of the market were released: "The US economy does not seem to be heading for a recession. We estimate that the economy does indeed slow down growth, but there will be positive growth next year."
In October 2007, the market returned to calm, and house prices also rebounded slightly. Everyone thought that this was a short episode and there was no so-called financial crisis. In the third quarter, the growth rate of US economic output was still close to 4%, and the unemployment rate remained at a low level. Bernanke once again said that "the impact of the problems in the subprime mortgage market on the broader economic and financial markets seems likely to be brought under control."
You said that it is a coincidence that the Fed, which just announced the injection of liquidity into the market the day before yesterday, may also publish the same remarks as in 2007, and then announce a rate cut. It’s like what Powell said on September 6th: “The most promising prospects are still a moderately growing economy, a strong labor market and inflation that continues to rise.” Then from October to the end of the year, the market may have returned to calm, and everyone will pay attention again. Force to turn to the risk market.
We will return to 2007, and in December, the Fed lowered the rediscount rate and the federal funds rate by 25 basis points, respectively, and cut interest rates for the first time since the crisis. After the Fed cut interest rates frequently in the winter in 2008, there was an unexpected drop in house prices, which led to more losses on mortgage-backed securities, and financial stocks slumped.
On March 7th, Paulson stood on the podium of the National Press Club. The reporter who faced the indefatigence of a room explained the cause of the crisis: the direct fuse was a low-quality sub-loan, market participants and regulators. They all turn a blind eye to various risks. At the end of the speech, I got a message: "Bellsden has a liquidity problem." Paulson knows that Bear Stearns is dead. Once the liquidity problem has spread, there will be a lot of divestment of Bear Stearns.
This is the cruel law of Wall Street: When a financial giant is going to fall, they will die faster than you think.
Everyone knows the story, and the dominoes begin to fall one by one. Today, we can vaguely see that the same history will repeat itself. In the previous article, I have repeatedly stressed that the core of this global financial crisis will be the collapse of the US dollar. The support behind the US dollar is the oil dollar. When the US stock market and the US dollar are going to fall, how to maintain the value of the dollar?
At this time, we saw the news on September 14: two oil facilities in Saudi Arabia were attacked by drones. US Secretary of State Pompeo accused Iran of being responsible for this, and Tehran immediately made a strong counterattack. This day, it was called a chaos. You see, the Saudi oil facility was attacked, and the inevitable result was a sharp drop in global oil reserves. The price of bulk crude oil skyrocketed, and the Yemeni rebels armed with Hussein admitted that they had launched an attack, and the United States simply ignored the recognition and directed the finger at Iran. China and the European Union mediate mediation, and Russia does not rush to reach a conclusion.
This outing is just like watching a movie, and it has a lot of doorways. We know who is most beneficial to the occurrence of the event and know that there may be a game behind this thing. A former French intelligence chief who asked for anonymity told AFP that there must be a superb air defense system to deal with the attacks on Saudi Arabia. Only the United States has this system.
So interesting things are coming. In the past few years, Saudi Arabia has spent huge sums of money on the purchase of ground-to-air defense systems, such as the US-made Patriot missile defense system, and the ultra-modern radar produced in the United States. According to the International Centre for Strategic and Peace Research in Stockholm, the country spent $65 billion in 2018 to purchase these sophisticated weapons. But the United States still does not have its own core defense system.
Oil dollars, oil dollars, when the oil skyrocketing, the dollar will not stabilize.
There is no conspiracy theory in it, and a simple deduction can reveal the clues. Then we look at Bitcoin in turn, isn’t it always said that Bitcoin is a safe haven? From September 14th to today, Bitcoin has closed slightly.
Then the question is coming. In the end, is gold considered a safe-haven asset? Count, everyone will answer it immediately. Why? Because history tells us that gold is a safe haven. Ok, then I tell you, this phenomenon is called collective amnesia. There is no such thing as a natural consequence of the fact that gold is a safe-haven asset. Gold is a safe-haven asset just a "social representation", but it does not reflect its essence. The essence of gold is the reverse description of the dollar.
In the past few decades, the news reports that everyone has seen are: global risk events have frequently exacerbated global market volatility, and gold prices have increased their focus as safe-haven assets. But what about the truth?
From the historical data, the price of gold is only affected by the risk event in the short-term, and there is no significant relationship between the risk-averse indicator and the long-term gold price.
The VIX Panic Index is a good indicator of what is expected of the market's future risk. If gold is really a safe-haven asset, the VIX index should have a very positive positive correlation with gold. But from the data of the past 30 years, the VIX and gold price curves are completely two types of curves, and no correlation can be found.
Since 1975, from the perspective of war or mass riots, there has been no positive correlation between gold prices. The most funny thing is that in the Iran-Iraq war that took place in 1980, the price of gold was actually the highest point in the past five years. After the war started, it began to fall all the way until it reached the stage bottom in 1985. And we have often heard about a series of famous historical memories such as the Gulf War, the Bosnian War, the Chechen War, the Kosovo War, etc., although gold is in a downward trend.
The terrorist attacks have no obvious impact on gold. Except for the September 11th incident, any terrorist attack in the past two decades has not affected the wide-ranging rise of gold. There was even a gold plunge on the day of the Boston Marathon bombings.
Will gold be more resistant to inflation? Since the beginning of 1975, the price of gold has been negatively correlated with inflation for some time periods. So is gold going to be a premium because of the scarcity of supply? It turns out that in the past 20 years, the correlation was only -0.036, which is almost negligible.
This conclusion is very "because of listening." Gold has no hedging function at all, so what is gold related to?
Gold has a significant negative correlation with the US dollar, and the shorter the time, the more obvious the negative correlation.
After 1973, the Bretton Woods system was disintegrated and gold was not monetized. This time actually formed a triangular relationship between gold, the dollar and other currencies. The dollar depreciated and the price of gold dollar rose. The dollar has appreciated and the price of gold has fallen. Since 1975, the correlation coefficient between gold price and US dollar index is -0.46, and the correlation coefficient between gold price and US dollar index since 2016 is as high as -0.71.
You said that the United States has no idea as a stakeholder in the biggest changes in oil and gold prices. I don't believe it. Everything in the world is a bureau. How much you can understand depends on your cognition and understanding. Understand this game, investment will naturally make money. So if gold can be an important player in the game, why not bitcoin?
To this day, we know that this triangular relationship has become a game between Bitcoin, the renminbi and the US dollar as "digital gold."
In other countries, there is only the problem of standing in the currency. This led to things returning to the "掰cake" problem mentioned in "On the Way Out between China and the United States and Bitcoin." why? It is impossible to see the two major powers directly, and the actual conditions are not allowed. It must be based on a typical partial global situation. This typical partial future is the Taiwan Strait, now Hong Kong.
Hong Kong is not only the focus of Eastern and Western ideology, but also the best breakthrough for the Sino-US currency game. Both financial warfare and ideology warfare have excellent practical significance. So these two days, we have seen such news: Soros once again planted Hong Kong: 200,000 empty orders were squandered and lost 2.4 billion.
We should pay attention to the news, who said this, how to say it, why. It must be the local media in Hong Kong, such as Ta Kung Pao, which was sent out and then reprinted by domestic financial media. But what is interesting? Foreign media have almost never reported relevant news. This is very "because of blowing".
Is it because Soros really feels too shameful, and he spends money on all the media in the world, don't report this thing? Not necessarily. First of all, this thing must have happened, but we look at the 1997 financial crisis, the country is categorically not so obvious to tell everyone about this process.
Today, the renminbi has gradually stood up. To become a strong currency, China will kill the dollar and its series of naive thoughts in the cradle.
The foreign media did not publicize, and the Chinese media reported that it was necessary to get the commanding heights of the discourse. Pave the way for the exchange rate of RMB depreciation to Hong Kong dollar. If there is a vicious financial incident in Hong Kong, the Hong Kong dollar is equal to the offshore renminbi. Shorting the Hong Kong dollar is equal to shorting the renminbi. This is almost impossible for the 51% attack on Bitcoin.
Western ideology is like boxing, hoping to directly knock down each other. Soros also expressed the attitude that "the interest in defeating China exceeds the demand for American interests" is too simple. But the ideology of the East is Tai Chi. There is no need for direct conflict. A slight turn can be used to resolve the crisis. This is not smart, it is wisdom.
You see, the HKEx has not learned a standard action from the digital currency exchange, called "plugging the network cable." Soros has shorted Hong Kong for a long time, and is preparing to sell a large number of empty orders. The HKEx electronic trading system "failed" and suspended trading in the derivatives market from 2 pm on the 4th. After the transaction resumed on the 5th, Hong Kong stocks rose sharply, and Soros was "closed to the dog" and had no temper.
On the other hand, looking at the digital currency market, almost 100% verified the logic of the articles I had in the past few weeks. Ethereum and several mainstream currencies began to rise relative to Bitcoin. And many friends have been concerned about the bitcoin will not plummet, I actually want to emphasize is. Everyone needs to see long-term trends, not to be trapped by short-term fears.
In fact, from the weekly MA20 moving average of the past two months, the low point of Bitcoin has been raised. The sound of the Fed’s interest rate cuts again, and Bitcoin’s Wall Street predators will clearly see the signals sent by the market and act. This time I tend to be before this weekend. The next three months may be the last breath of the dollar, and the yuan has a firm look.
Bitcoin sees the glimmer of human hope in the next hundred years.