Source: Kelvin Story , with cuts
In fact, this article should have been written for a long time, but I have been running around for years, but I haven't found time to write. On the other hand, all time is the right time, all places are the right places, and all people are the right people.
The events of the United States and Iran in the beginning of the year caused a huge sensation around the world. I believe everyone has eaten this melon for a long time. Many people even put forward the rhetoric of the Third World War. On the other hand, it is widely believed at home and abroad that Suleimanni's death will lead to major changes in the situation in the Middle East.
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Actually not. This is a speculation that many people do not understand Iran. Of course, today I say this is a bit of a hindrance. The events of January 2020 have just become a footnote in history. I hope that everyone will learn more about Iran and learn more about Iran in the future. In the coming decades, we will often see this country appear on international news.
In fact, during the Iran-Iraq war, Iran had completed its internal partisan cleansing struggle. At present, the country is actually highly identifiable with the system and ideology, and has basically not split pro-British Americans. The reason why it is able to intervene forcefully in Iraqi politics is not only the force of the military, but also the sediment of thousands of years of history.
With the ability of the United States, it is impossible not to know such a fact. But even so, why did Trump make a decision to assassinate Suleimani? There are two reasons:
First, the Iraqi parliament has decided to vote to end the US legal garrison, that is, to start expelling the US military. However, in the past so many years, the United States has placed such a large amount of human, material, and financial resources in Iraq, and now it is said to be driven away. Don't I Trump face? Anyway, the United States will be forced out of Iraq, so it is better to build a step and let itself step down.
Second, in the next two decades, the strategic focus of the United States will not be in the Middle East, but will return to the Asia-Pacific. For the time being, America's biggest competitor is not a Muslim country, but another ideology that has risen to hang off the dollar.
For Trump, war is often a better excuse to increase public opinion. The 1991 Gulf War raised Bush's popularity; the terrorist attacks of 9/11 and the subsequent bombing of Afghanistan by the US Army made Bush's approval rating a record in his term. And today, we know that Trump surpassed 50% approval for the first time in the polls of the next US president.
With the escalation of tensions between the United States and Iran, in the long run, the impact of this assassination on American politics will depend to a large extent on how Iran responds and the severity of the conflict that may follow. The withdrawal of U.S. forces from Iraq is inevitable, which means that the hawks in the United States will express stronger dissatisfaction, while the doves will be under pressure from economic uncertainty to populist social ideology.
In times of turmoil, although peace is the hope of most people, for capital and interests, only disaster can bring huge opportunities for shuffle. I mentioned in my article half a year ago that there will be a war in the world in 2020. This war will be extended to the situation in the Taiwan Straits due to the contradiction between China and the United States in continuing consultations.
This is also the core time point of the Iran incident. This is only a prelude, and it may be a historical drama that may last for decades. In order for the United States to prepare, it must shift its strategic focus from the Middle East back to Asia Pacific. There is not much time left for the United States. In the next few years, it will inevitably go all out to fight it out.
Actually, I don't want to talk too much about Iran today, but do you guys think that this scene seems familiar? Twenty years ago, the United States provoked another country in the same way, this country is China.
On May 8, 1999, the United States B-2 bomber dropped three precision-guided bombs in a bomber without the authorization of the United Nations, hitting the Chinese Embassy in Yugoslavia in Serbia. Xinhua News Agency reporter Shao Yunhuan and "Guangming Daily" reporter Xu Xinghu and Zhu Ying were killed on the spot, injuring dozens of people and causing serious damage to the embassy building.
In a statement on the same day, the Chinese government said: "This act of NATO is a gross violation of China's sovereignty," "a rare occurrence in the history of diplomacy," and "the Chinese government and people have expressed great indignation and severe condemnation of this barbaric atrocity. Strong protest. "
This has led to strong outrage among the people in the country, and large-scale protest protests broke out in many cities: in Beijing, protesters surrounded the U.S. embassy; in Shenyang, Shanghai and Hong Kong, protesters came to the U.S. consulate to demonstrate and protest NATO atrocities.
It was the first time in the history of this incident that the people of the whole country were united together unprecedentedly, and China's sense of social democracy was awakened. Among them, Song Wenfu, the new resident chief correspondent in Belgrade in 1999, was a witness to NATO ’s bombing of Yugoslavia. He pointed out: The bombing incident has greatly awakened the confidence and determination of the Chinese people to become self-reliant and work hard to master the core technology and develop the national defense industry.
Back then, the country ’s response to the incident from today looks exactly like the pattern of a top power. Rather than expanding the impact of the bombing hall incident and raising it to a full-scale diplomatic conflict, we are immersed in building and doing our own business well, with a long-term vision. If we fought against the United States without any guarantee at that time, there would be no China today.
To wear its crown, it must bear its weight. We have prepared this battle for 20 years.
Looking back at history today, we can find that after the reform and opening up, there were really three times when China's historical process was really changed: one was the US bombing of the Chinese Embassy in Yugoslavia in 1999, the other was China ’s accession to the WTO in 2001, and the last one was In 2008 China hosted the Olympic Games.
If there were no events in 1999, China would not have such a strong sense of urgency. Strengthening technological innovation, national defense technology, and infrastructure investment from the construction of an independent industrial innovation system. The past 20 years have been the greatest achievements since the founding of New China. 20 years. Without accession to the WTO in 2001, China would be isolated by the world, and the original capital accumulation of state capital-type socialism would not be completed quickly. Without the 2008 Olympic Games, the world ’s misunderstanding of China would be far beyond imagination, and it would have a far-reaching impact on China ’s “Belt and Road” and the internationalization of the RMB.
Today, we have seen the Iranian people who have been united as a result of the assassination. From the past, all the middle-aged and elderly people have moved to young college students and the new generation of forces. We have also seen the large-scale anti-government caused by accidentally hurting airliners. protest. No matter which direction the current situation is headed, I believe that it will lead Iran to the awakening of social democracy.
The butterfly effect will eventually emerge in the future. Iran today is China yesterday. As the world's largest state-state-religion unity, it will profoundly affect the world decades later. History will remember that it all started on January 3, 2020.
2020 is destined to be a year of global turmoil and long and short strikes. In addition to the Iran incident, in the early hours of the night, Medvedev led the Russian government to resign collectively. The reason is that Putin hopes to amend the constitution and cancel the president's "two consecutive terms" requirement. The whole process is not like a coup or civil strife, but closer to the procedures of western democratic politics. In the future, we will see more and more turmoil and change in government.
Today, everyone not only sees the new year started by the war, but also notices the surge in US stocks such as Tesla and Apple.
Just a while ago, many people told me that the number of employed people in the United States was far better than expected. The last two months were the lowest unemployment rate in the history of the United States in recent years, proving that the US economy is improving. I already expressed this point in my article at the time: When the unemployment rate was already low, it means that it is not far from retaliatory rise.
Just a few days ago, non-agricultural data in the United States were far below market expectations, while another indicator, the number of people who continue to apply for unemployment benefits, is increasing. In December, the PMI manufacturing index in the United States fell again. The latest Deloitte CFO report shows that the expectations of market executives of various companies have continued to decline from 18 years ago. Today, they have fallen below the equilibrium baseline.
The expected rapid decline in the market and the rise of US stocks have formed a sharp inverse ratio, indicating that 2020 will be the last madness.
Since October 15, the Federal Reserve has injected a lot of liquidity into the market through reverse repurchase, which is invisible quantitative easing, and has purchased 60 billion US dollars of Treasury bills every month to ease liquidity tension. As mentioned in my previous article, this money has flowed into US stocks to drive the market up.
There is not much new under the sky. Let's take a closer look at some of the macro profiles that occurred before the tech stock bubble burst in 2000.
After the soft landing of the economy in July 1995, the Fed lowered the target rate of the federal funds by 25 basis points in order to prevent the rise in the inflation rate and the real interest rate of the federal funds, and maintained a relatively loose monetary policy in the following four years. , To keep the average real interest rate around 3%.
In 1999, the United States-led NATO began to promote local wars against the Yugoslav Union caused by ethnic conflicts in Kosovo. Its duration was from March 1999 to June 10, 1999, including the bombing of the Chinese ambassador to Yugoslavia on May 8. Pavilion.
In the same month, the Federal Reserve began a comprehensive shift to austerity policies, gradually raising the federal funds target rate from 4.75% to 5.75% in June 2000. On the surface, it wants to cool down the market, but actually does not want the US stocks to pull back. Greenspan, then the chairman of the Federal Reserve, had already made his calculations, and vowed at the time that hot money would not enter the stock market. In December, the U.S. unemployment rate fell to its lowest level in 29 years—4.1%.
The fact is that in October, the Federal Reserve opened a reverse market repurchase, and all liquidity entered the US stocks. The stock rose 80% in just 5 months, and peaked in March 2000. Why is this time?
Because just two weeks before the Fed announced the end of the reverse repurchase, the giants chose to leave the market and began to sell a lot of stocks.
The Nasdaq fell sharply after hitting 5,048 points in March, and only then reached the bottom of 1114 points in October 2002, a drop of 78%. The Chunjiang Plumbing Duck Prophet, only beasts can smell the smell of blood. Data show that now US stocks have been completely overbought, while bearish funds have reached their lowest point in two years.
According to the Federal Reserve's repurchase operation plan announced on October 11, the $ 110 billion repo operation will help increase the reserve scale by 7%, and the mid-October $ 60 billion bond purchase plan that will continue until the second quarter of 2020 will be beneficial The reserve scale increased by 4%, and the combined increase of the reserve scale by 11% and the Fed's asset scale by 4.3%.
Overnight and regular repo operations will be extended to January 2020, with each operation scale not less than $ 75 billion; regular repo operations will be implemented twice a week, with each operation size not less than $ 35 billion. As of June 2020, a total of US $ 540 billion in debt purchase plans will increase the Fed's assets by 14%.
Will reverse repurchase and bond purchases continue after June? After all, 2020 will accompany the Iran incident, the Taiwan Strait issue and Trump's re-election.
U.S. stocks and the U.S. economy form a frame of reference for each other. The strong rise in U.S. stocks in the next half of the year means that the GDP of the United States in the next two quarters will be driven to form a "false indicator" of rapid rise. But we need to know that rising US stocks have never benefited everyone.
The top 10% of the rich have more than 70% of their wealth, and the bottom 90% of the middle and poor have only 30% of their wealth. The key point is that the top 10% of households have more than 90% of US stock assets, and the latter 90% not only did not enjoy the benefits brought by the rise in US stocks, but carried a lot of loans. In other words, in the United States, 90% of people are paying for 10% of people, which has promoted the development of the US stock market and GDP.
Extreme polarization between rich and poor will peak in 2020, and ideological splits and upheavals within the United States will accelerate. This is likely to strengthen Trump politics, after all, he is a typical representative of American populism. If the Iranian incident at the beginning of 2020 can increase Trump's approval rating, then in the coming year, there will be even more incentive to continue to find the next target to launch an attack as an accelerator before being re-elected. This point in time is likely to occur in the second half of the year.
If we look back at the macro events before the 2008 subprime mortgage crisis, we will find that the Iraq war began in March 2003 and ended in December 2011. The core reason is that Saddam promoted the Arab League and excluded the United States from the Middle East. Influence, invasion of Kuwait. Iraq is one of the major oil-producing countries. If Iraq abandons the U.S. dollar and uses the euro for settlement, then the petro-dollar building will be drawn away from an important pillar. If more and more oil-producing nations join the ranks, petrol dollars will collapse.
So the United States launched the Iraq war, and its core turning point was that on December 30, 2006, Saddam was sentenced to death. From this moment, the United States has completed its mission in Iraq and sought to withdraw.
It was precisely from the beginning of the Iraq war that the United States stopped cutting interest rates. From June 2004 to the end of 2006, the Fed began to raise interest rates 17 times in a frenzy, and the interest rate was raised from 1% to 5.25%. In the same year, housing mortgage loans were in arrears of more than 5 million, almost 10% of the total, and the real estate bubble burst.
Exceeding the expected rate cut and the next rate cut are the reasons for the continued rise in US stocks from September 18 to October 11, 2007. On October 11, 2007, U.S. stocks peaked at 14,279 points. The essence is that the sub-prime mortgage has begun to erode the US financial system and the real economic background, the inertia of the US stock market at the end of the inertia: the last lure of giant crocodiles.
If time goes backwards, at what point will you choose to play? The answer should be exactly two weeks from the beginning of September to the 18th. The point at this time was 13,560, after which US stocks bottomed in March 2009, reaching 6,440. Although it lost about 5% of the profit compared to the highest point of sales, it avoided quilts for up to one and a half years and a loss of up to 54%.
At this point, the Fed tells you openly that the game is over. The time to leave is an opportunity that every ordinary person can seize.
Back to 2020, the Federal Reserve cut interest rates three times last year. The United States recorded a seasonally adjusted CPI rate of 2.3% in December, the highest level since October 2018. This may be an excuse for the Fed to keep the benchmark interest rate unchanged at current levels by the end of this year.
U.S. inflation data is critical because it is one of the key reference indicators for Fed policy. Federal Reserve Bank of New York President Williams said the Fed's ability to maintain and meet its 2% inflation target is vital, even if global low interest rates are likely to continue.
"There is a difficult process of adapting to low and neutral interest rates. These factors are basically the problems we will solve in the next five to ten years. If inflation continues to fall below our target like this, then the downward trend in inflation expectations will be It may continue, and inflation expectations will be well below target levels. "
In 2020, the United States is more likely to enter a situation where the political hawks led by Trump and the economic doves led by Powell resonate. This means that because of war and unrest, the Fed is likely to continue to support reverse repurchases and debt purchases. And only a vicious rise in inflation is likely to prompt the Fed to end interest rate cuts, thereby initiating a rate hike cycle.
When the rate hike cycle started, the US stock market crashed.
The 2008 subprime mortgage crisis has maintained the benchmark interest rate since the end of June 2006, and the first interest rate cut did not occur until September 2007, with a median duration of 1 year and 2 months. Since the Federal Reserve began to cut interest rates at the end of October 2019, Powell has also issued expectations that interest rates will remain unchanged.
Is it possible for the Fed to end its reverse repurchase and buy bonds at the end of June? It is more likely that there will be continued anti-repurchase and constant interest rate expectations until the end of the year. Do you have any concerns about the core war turning point of the U.S. bombing of the Chinese Embassy in Yugoslavia just 10 months from the peak of the U.S. stock market crash in 2000, and the core war turning point of Saddam ’s execution from the U.S. stock market crash in 2007? month. I'm not saying that this is directly related, but rather represent another key logic:
At the heart of every round of war is the petro-dollar, and the inflection point of the war means the end of a strong dollar.
Going back to the beginning of this article, the Iranian incident on January 3, 2020 will finally herald the decline of the strong dollar this year. This means that the time of the US stock market crash is likely to appear in October. On the other hand, the US election will start on November 3, 2020. If Powell hopes to maintain a decent, rather than the scapegoat for the largest crash in human history in nearly 100 years, then it is likely that the Fed will start raising interest rates early in October. After all, at this time, the election war came to an end, and Trump did not have time and energy to interfere too much.
If Powell hopes to continue to maintain the image of a strong dollar, the limits of the stock market will also erupt around Christmas 2020. After all, this time is the junk time for U.S. stock trading, and it is also the time when traders are most lazy. The Fed launched at this time Raising interest rates is the least stressful. The market may fall into the final inertia in January and then collapse.
This means that the last madness of the global economy will most likely occur between October and January of the following year. The core sign will be the Federal Reserve's interest rate hike cycle, which will be the last chance to escape.
If the Fed stops reverse repurchase and buying bonds in June, then it is likely to have a first top and then fall rapidly in the two weeks before the stop. After that, the Fed keeps the benchmark interest rate unchanged and implies the expectation of a rate hike, and the market is picking up again. It began to rise until the confirmation of the rate hike cycle before and after the US election at the end of the year, which will be the last temptation for the giants. Form a double top in the market and become the last chance to escape.
The above also applies to Bitcoin.
For a long time in the past, I often talked to my friends about the demographic dividend. Many people don't really understand why Bitcoin has increased 5 million times in the past 10 years, and they don't understand why they can make money by buying Bitcoin themselves. In fact, we think carefully about the two bull markets that have appeared in the past decade.
At the end of 2013, Bitcoin's first bull market high reached 1.5 million people worldwide who participated in digital currency investments. This number, at its lowest point in September 2015, was only 500,000 when Bitcoin was worth 900 yuan. In other words, 1 million people worldwide were washed out by a 86% drop in the market.
This number did not return to 1.5 million until the end of December 2016. Are the 1.5 million people at the end of 2013 the same as the 1.5 million people at the end of 2016?
In June 2017, the number of participants worldwide reached 5 million. After 9.4, in December 2017, when the highest point of Bitcoin was 19891, the number of participants worldwide reached 15 million. In February of the following year, after the highest point of Ethereum, this number reached 20 million.
Bitcoin dropped all the way until it bottomed out in mid-December 2018. The rebound started in early 19, with more than 30 million market participants. By early 2020, there were more than 40 million participants worldwide.
Going back to the question just now, the 1.5 million people at the end of 2013 were not the 1.5 million people at the end of 2016. Because even in the 2013 bull market, more than 1,000 digital currencies appeared in the world. As of today, no more than 5 species have survived. In 2013, 1.5 million people's funds were distributed among 1,000 digital currencies led by Bitcoin. By the end of 2016, the funds of 1.5 million people had only entered into digital currencies such as Bitcoin, Litecoin, and Ethereum.
Is it an exaggeration to increase 5 million times in 10 years? From Satoshi Nakamoto alone to 40 million participants worldwide, this number is not excessive. But today's 40 million people have clearly surpassed the 20 million people at the beginning of 2018. Why is the altcoin in your hands still no improvement or even zero.
The core reason is that consensus has returned to mainstream digital currencies and digital currencies that may become mainstream currencies. This is the consensus "siphon effect". Each round of bear and bull conversion is completed by consensus returning to the mainstream and then gradually starting altcoin to rise.
Why by the beginning of 2018, after the number of participants around the world reached between 20 million and 30 million, the digital currency began to show a large-scale collapse? Because of the world's largest Ponzi scheme MMM, the actual participants are only 20 million. Although 250 million data can often be seen online, it is roughly exaggerated by 10 times. Compared with MMM, another verifiable fraud scam coin, only 3 million participants worldwide.
I know a lot of people, and when they talked to me about Bitcoin, they said they had contacted or heard about it very early, but they didn't participate in the early stage. why? Because you heard that Bitcoin is a scam. Even in 2015, including Litecoin and some mainstream currencies, it was still listed as the most famous scam of the year in CCTV news.
But it is precisely the organization MMM that has brought Bitcoin to all parts of the world, because the government's drive to make them the only chip they can exchange is Bitcoin, which brought early circulation and exchange. So why did you buy bitcoin before 2018 to make money? Because there is a group of "mysterious forces" that you don't know are pushing the development of Bitcoin.
It is precisely because of the end of this power that Bitcoin ushered in the intervention of governments and capitals of various countries in June-August 2018, and began a new journey at the end of 2018. Various regulated bitcoin futures exchanges in the United States also began to open in the second half of 19 to early 2020.
Returning to the subject of this article, 2020 will be a year of long and short double kills. The opening of the Bitcoin halving cycle on May 13 coincided with the time when the Fed initially decided to end its reverse repurchase and buy bonds. At this time, it is likely that the first high point will be formed, and the position is around 16000.
It then formed a resonance with the same period of the US stocks, and fell in sync. And waiting for a signal from the Fed to raise interest rates, it is beginning to rise again. In the second half of 2020, it is likely that a double-top situation will not be formed, but an overshoot will occur, exceeding the 2017 high and reaching 22,000 points at the end of 2020. The final rate hike was established and the top appeared.
Is this number possible? At this time, let us revisit what happened in the Great Depression cycle of the previous economic cycle. The core inflection point of gold was the last round of the Great Depression.
On August 15, 1971, US President Nixon delivered a televised speech, closing the gold window and stopping governments or central banks from holding dollars to exchange for gold. The US dollar decouples from gold and floats freely in the foreign exchange market. In 1972, the price of gold in the London market rose to $ 46 an ounce and then to $ 64.
US stocks peaked in January 1973. In the same year, the price of gold broke through $ 100. From 1974 to 1977, the price of gold fluctuated between $ 130 and $ 180. In 1978, crude oil surged to $ 30 a barrel, and the price of gold rose to $ 244. In 1979, the price of gold rose to $ 500. In October, US inflation broke through 12%. In the first two trading days of January 1980, the price of gold reached $ 634. The US Treasury Secretary Miller announced that the Treasury Department will no longer sell gold, and the price of gold rose by $ 30 to $ 715 in less than 30 minutes. It was $ 850 on January 21 new highs.
In 1985, the gold price bottomed at 284 US dollars. From the historical high of 850 US dollars on January 20, 1980, the gold price of the US dollar has dropped 67%. In the decade from 1980 to 1990, the inflation rate in the United States increased by 90%, and Japan, known for its low inflation rate, was also at 20%.
The first bull market of gold corresponds to the last round of the Great Depression of the global economy from 1973 to 1982.
After gold bottomed at $ 255 from 2000 to 2001, it started a crazy 10 years and reached an all-time high of $ 1923 in September 2011. This time period corresponds to the current economic cycle from the peak of prosperity to the decline.
If you convert the price of bitcoin in 1919 to the second highest point of gold before the Great Depression, you will unexpectedly find that the two figures in the year before the Great Depression, which is 2020, correspond to $ 16,000 and $ 22,000.
The two years before the end of the Great Depression, which is the highest point of Bitcoin in 2028, can be calculated to be close to 300,000 US dollars. By the next round of the economic cycle from the peak of prosperity to recession, that is, the highest point reached in 2060 is exactly $ 600,000 a bitcoin, when the total market value of bitcoin will reach the same as the total market value of gold.
Why should the increase in bitcoin and gold be used as a reference since 19 years, because after 18 years, the involvement of global politics and large-scale fiat currencies officially opened the journey of bitcoin "digital gold".
There is no such thing as an eternity. The total market value of bitcoin may exceed that of gold, and it is more likely that it will reach $ 600,000 or even $ 1 million in 2028.
The course of history has never been faster, not slower . Compared with the eve of 1973, today the global high level of information fusion due to the evolution of the Internet will accelerate the growth of consensus; on the other hand, compared with 48 years ago, the global situation today is more similar to the eve of 1929. The Great Depression may reappear.
Taking history as a guide to know the rise and fall, the Great Depression cycle of the previous economic cycle has given us a good inspiration. One is that you can find gold as a reference for bitcoin, and the other is that you can understand the inevitability of economic laws. The last cycle of the Great Depression also peaked in January 1973, which was converted from the Year of the Rat to the Year of the Ox, and began to crash. It coincides with the latest point of the current crash. Will history repeat itself?
As a digression, in the past 100 years of history, the world will experience large-scale turbulence and chaos. Because in the past century, the world has formed a world economic system centered on the US dollar. From the perspective of feng shui, the Gengzi Nian happened to be in conflict with the United States. In history, every American president who took office in the Gengzi year was assassinated. In the 1900s, William McKinley was elected president of the United States and was assassinated the following year. In the 1960s, John F. Kennedy was elected president of the United States and was assassinated three years later.
In any case, in the coming year, we will all see the disintegration and reconstruction of human social order, and at the same time witness the new inflection point replacing the old, the decline of the West and the rise of the East. International populism prevails, and riots and wars will run through 2020. The human financial order will completely fall apart, giving way to the technological finance of machine networks. Primitive religions will give way to online fundamentalism. Consensus will appear in every corner of the world. A single spark can start a prairie fire.
2020 will be the first year of the rise of the Bitcoin god.