Chapter 61 The Interrupted Interest Rate Hike Cycle

Chapter 759 The interrupted interest rate hike cycle

There are no secrets in a capitalist country.

It didn't take long.

The stock market of a certain country is once again in the green for the long term.

Many stocks that originally fell to the limit have risen to the limit again.

Big money has entered again.

This fluctuating stock price has directly killed a large number of leeks around the world.

Many investors who took advantage of leverage immediately liquidated their positions and queued up on the rooftop.

A certain country originally took advantage of the war between the big country and the two countries to exaggerate the crisis in the Europa continent, harvest the capital of Europe, and start an interest rate increase cycle.

On the surface, the purpose of a certain country's interest rate hike cycle is to curb high inflation.

Officials said at the time that economic activity and employment indicators continued to strengthen. Job growth has been strong in recent months and the unemployment rate has fallen sharply. Inflation remains elevated, reflecting pandemic-related supply and demand imbalances, rising energy prices and broader price pressures.

The conflict between the two countries caused huge human and economic difficulties. The impact on a given country's economy is extremely uncertain, but in the short term, conflict-related timing could put additional upward pressure on inflation and weigh on economic activity.

As a result, a country hit its highest inflation level in 40 years.

Over the past year or so, strong growth in consumer demand and supply chain bottlenecks under special circumstances have pushed up inflation in a certain country.

Inflation has become so severe that even the [First Lady] complains that meat is expensive.

Of course, looking back, this statement is more of a show. Why does the [First Lady] need to buy groceries by herself?

However, inflation in various aspects of a certain country is indeed very serious, especially food inflation.

Meat, eggs, and milk are essential supplies in residents’ lives. At the end of October last year, the price of a certain type of beef in a certain country had risen to US$97 per pound (approximately 237 yuan per kilogram). Four months ago, this type of beef was The price of beef is only US$12 per pound (approximately RMB 166 per kilogram).

Not to mention the price of gas.

A certain country is a car-driven country, and residents are much more sensitive to oil prices than people in China.

After the conflict between the two countries, the price of energy, represented by oil, was like a wild horse, soaring upwards, further pushing up the level of inflation.

The price of crude oil in a certain country soared again to US$68 per barrel on March 4, local time, reaching the highest level in fourteen years.

For this reason, a certain country had to start an interest rate hike cycle.

Of course, this is the obvious reason.

In fact, when a certain country starts an interest rate hike cycle, it has another purpose, which is to harvest the world.

A certain country relies on the U.S. dollar, or in other words, U.S. dollar hegemony.

The US dollar is the world's most important reserve currency and settlement currency, and the spillover effect of a certain country's monetary policy is significant.

As they say, "The U.S. dollar is the currency of a certain country, but it is the trouble for the people of the world."

When a country implements quantitative easing monetary policy, a large amount of funds flow to emerging market countries. However, once the Federal Reserve raises interest rates, it will bring huge capital outflow pressure to developing economies, promote imported inflation, and squeeze their policy space.

It is through raising interest rates that a certain country absorbs high-quality assets from emerging economies, passes on its own crisis, and easily "shears sheep" and harvests the world.

The specific model is as follows:

In the first round of "harvest", when faced with a major economic shock, large-scale borrowing and money printing were used to stimulate the economy by using the low financing cost of the US dollar, while a large amount of US dollars flowed overseas, which was essentially forcibly borrowing money from other countries;

In the second round of "harvest", after excess U.S. dollar liquidity and expectations of economic recovery led to global inflation, the Federal Reserve tightened monetary policy by raising interest rates and other means, which objectively promoted the return of capital, ultimately causing many countries to suffer hyperinflation and capital outflows. The double impact has even led to a tragic collapse in asset prices.

In the third round of "harvesting", when asset prices in other countries plummeted, a certain country printed a large amount of money to "buy the bottom" and harvested other people's high-quality assets.

It's been this way over the years, over and over again.

Judging from historical experience, once the Federal Reserve starts to raise interest rates, the interest rate gap between a certain country and other countries will widen in the short term. The expected appreciation of the U.S. dollar and rising U.S. bond yields will attract international capital to return to a certain country, leading to global financial tensions and rising interest rates.

In this case, fragile economies usually face a dilemma - if the local currency appreciates along with the US dollar, the weak economy will continue to be under pressure due to the loss of competitiveness of exports; if the decoupled US dollar depreciates, capital outflows may occur.

Of course, a country cannot raise interest rates as much as it wants.

The Fed also needs to weigh the situation based on reality.

If interest rates are raised too sharply, it will seriously harm a country's economy that is in a state of recovery. It will cause enterprises to use capital costs to rise too much, suppress residents' consumption, and deeply harm a country's capital market within a certain period of time, thereby affecting the country's capital market. The level of direct financing of enterprises.

The worst-case scenario is that instead of boosting the economies of other countries, it crashes its own domestic stock market. This will make other big countries on the Blue Star laugh to death and start feasting happily, just like a certain country in In the 1990s, it happily devoured the Soviet Union, thus creating more than two decades of economic prosperity.

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The Federal Reserve is a seasoned hunter. It has extensive experience in raising interest rates and is better at managing expectations. It uses various simulated dilemmas to blow wind to the market and keep the stock market running smoothly.

It had been doing pretty well before.

But not anymore.

Why?

Because Wu Siyuan sent a [natural disaster warning] message, which caused the stock market of a certain country to collapse.

The stock market can keep falling or rising.

But it cannot suddenly plummet or rise sharply.

During this period, Wu Siyuan also followed the example of a certain country and went to [natural disaster expectation management], repeatedly exaggerating the atmosphere and making various remarks, which made the stock market of a certain country feel like riding a roller coaster, extremely exciting.

So far, Wu Siyuan has made trouble in the global stock market through "Four-Armed King Kong", especially in a certain country's stock market, and has made nearly 400 billion U.S. dollars. The price is that the stock market of a certain country has evaporated in a very short period of time. With a total of five to six trillion US dollars, it is about to collapse.

Under such circumstances, the Federal Reserve, the central bank of a certain country, dares to continue raising interest rates. In addition, the domestic stock market and economy are directly collapsing, forcing it to enter the channel of interest rate cuts.

It’s just that the interest rate hike cycle of a certain country has been interrupted. Now the interest rate is only a few points, and there is not much room for interest rate reduction.

Moreover, after interest rates are cut, capital will flow out to value depressions around the world.

And where is the biggest value depression in the world now?

There is no doubt that China, where the [Chaoqun Group] is located, is the most attractive place.

As a result, China will usher in a new round of economic growth.

And a certain country will be much more passive.

The domestic thunder can no longer be completely suppressed, so it explodes.