Seeing this title, some people may say that it is sensational; while spreading rumors to shake the hearts of the so-called democratic countries, while giving blood to the comrades struggling on the front against hegemony, it may cause people to misjudgment the current situation and influence decision makers to make wrong choices; then, please patiently read the following analysis before drawing a conclusion.
On the one hand, the Russian-Ukrainian conflict almost brought the entire Western side to an unprecedented crisis.
On the surface, the one who suffered the most losses in the Russian-Ukrainian conflict was Europe, including Russia and Ukraine. After all, the war took place in this region; however, don’t think that the United States, which seems to make a lot of profits in the short term, will laugh to the end, in fact, the real crisis in the United States has just begun.
In fact, despite the European geocrisis and the hike of interest rates in the US, international capital is accelerating its return to the United States; however, due to the various hybrid wars ongoing, the energy and materials needed by Europe and the entire American society are still in short supply. (If China hadn't been working hard to ensure production and supply, the global economy might have collapsed long ago...)
Under this circumstance, capital is still increasing, and through the stock market, bond market and real estate market, it tends to be concentrated in the hands of a small number of people in Europe and the United States.
It can be foreseen that due to the original accumulation of wealth, this small group of people has not reduced their ability to obtain energy and materials in a chaotic situation. They can still use higher prices to strive for the best quality of life as possible; and for the lower-class people in European and American countries, the gradually rising prices will eventually crush the last straw of life and force them to take to the streets to make claims or even grab the materials occupied by the rich.
Just the week before, Federal announced the third consecutive rate hike of 75 basis points, raising the target range of the federal funds rate to 3%-3.25%, setting the largest intensive rate hike since 1981. Such interest rate hikes have caused the dollar index to soar by nearly 3%, hitting a new high in the past 20 years.
At the same time, U.S. bond yields rose, pushing U.S. bond prices to the lowest in 11 years, with 10-year close to 3.9% and 2-year yields exceeding 4.3%; yield curve inversion is generally regarded as an important recession warning signal ; this means that U.S. bond may be the largest year since 1949; U.S. Treasury bonds suffered the worst selling wave in decades.
Some people will think that isn’t it a good thing to soar the US dollar index and rise in US Treasury yields? You continue to look at: The revised data released by the US Department of Commerce on September 29 showed that the final value of the annualized GDP of the US quarter in the second quarter was negative 0.6%, which did not change compared with the initial value of the correction. This indicates that the US economy is in a technical recession.
Federal Chairman Powell's attitude on the recession has further softened and has not emphasized confidence in soft landings as before. "We must control inflation . I hope there is a painless way to do this, but it doesn't."
Let's take a look at US stock . In the week before National Day, the total market value of the entire US stock market evaporated by more than US$2.8 trillion (about RMB 20 trillion). On Monday, September 26, Eastern Time, a "big dive" was staged during the session. The three major U.S. stock indexes fell for the fifth consecutive trading day, , which means that all the three major U.S. indexes fell into the bear market range (the market believes that a short-term loss of more than 20% is a bear market). Data from Bespoke Investment Group, a research company, shows that the "Russell 3000 Index" tracking 3,000 large-cap stocks in the United States has fallen 24% this year, with a market value of $13 trillion , and the prices of several stocks that once soared have fallen by more than 60% from their 52-week highs.
Some analysts believe that the current pessimism among U.S. stock investors has soared to the highest point since the global financial crisis in 2008.
Economic data show that US business activity is slowing down, and interest rate hikes have also allowed the real estate market to continue to cool down. Market participants are worried that the US economy may fall into recession because the Fed may go too far in the currency tightening cycle.
We have seen that the Fed's move is seriously affecting one of the economic areas that is real estate, as mortgage rates doubled a year ago, rising to 6.29%, the highest in 14 years (the last time this figure came in before the breakdown of the high valuation of U.S. real estate in 2008).
The largest real estate information website in the United States Zillow tracking data shows that among the 50 largest cities in the United States, the proportion of housing price cuts in the second quarter of this year reached 14.2%, which accounted for 90% of the sales volume of the US real estate market. Among them, the total sales in July and August unexpectedly fell again, and it was the seventh consecutive month, down about 20% from a year ago, and it hit a new low in more than two years.
As demand for the US property market suddenly cools down, mortgage loan businesses including Citi and Bank of America have begun to lay off employees, and has stimulated bank executives to warn of the decline in revenue in the mortgage loan business.
Starwood Capital founder Stern Licht said, "The Federal Reserve is about to cause an unprecedented collapse of US real estate." "In the fourth quarter of this year, cracks will be seen everywhere in the US real estate market."
According to data released by the National Association of Real Estate Brokers on September 15, house prices in 183 areas including Phoenix City and Boise may soon fall by 20%, which will exceed the Fed's tolerance.
At the same time, as the U.S. property market continues to face headwinds, a wave of downward housing prices began to spread, and when borrowing costs soared to the height of the subprime mortgage crisis in the property market before 2008, a large number of sellers, including Chinese investors, were selling their homes at a lower price to facilitate transactions.
Not only did Chinese buyers begin to withdraw from the US property market, but the data also showed that as of July, the number of foreign buyers buying second-hand houses in the United States also decreased by 32% to 46 billion compared with the same period last year, and the number of foreign buyers in the US property market fell by 35% to 125,000.
It is obvious that at present, the prices of US assets, including US bonds, US stocks and real estate, are experiencing a painful moment since the financial tsunami triggered by the subprime mortgage crisis in the United States in 2008.
The painful adjustment of US financial asset prices has not ended. With more evidence of a recession in the United States, coupled with the impact of longer and higher high interest rates, the will withdraw at least $31 trillion from the US stock market, bond market and real estate markets, and will not continue to flow into the US market as the market expects.
On the other hand, the return of the American first-hand directors to the Asia-Pacific region was not carried out according to the script.
From Trump announced a trade war with China, to Pelosi insisting on visiting Taiwan despite China's opposition, to Biden signed the chip bill and the inflation reduction bill successively. With the continuous implementation of various provocations such as the passing of aircraft carrier , fighter jets over and arms sales, the three American giants, who are in a good mood, are surprisingly consistent on the issue of returning to the Asia-Pacific to fight against China, but unexpectedly did not trigger China to take action against Taiwan like Russia, triggering a geopolitical crisis in the Asia-Pacific region.
Now, the two houses of the United States vote to pass the Taiwan Policy Act and hand it over to President Biden to sign and take effect. This move has not been used yet.
The United States' wishful thinking is to make China comply with the continuous pressure, and to change its fiscal measures and cooperate with the US dollar's interest rate hike, or to let China stand up and launch a military conflict. The ultimate goal is to make global capital, including the Asia-Pacific region, act in accordance with the US baton, and then help the United States resist the fundamental economic crisis that may shake its country this time.
Simply put, the United States has prepared for China with only two options, one is to sacrifice China's interests to save the US crisis, and the other is to interrupt China's development to feed the US body. For hunters who have reached the Jungle Law , they never thought that there was a third option, which was to achieve a shared destiny through complementary advantages. They were unwilling to lower their noble heads and discuss them well with us.
Some people may ask, is China also facing the crisis facing the stock market, bond market and real estate market, even more serious than the United States?
has some truth. In the global financial market, the United States is the weather vane of countries around the world. No one can think of it if the United States falls; the direction of the world situation is indeed going on. If this situation is put before, it would have been a long time since the uneven distribution of spoils in Europe and the United States.
However, unlike before, as Russia separated from the Western camp, the Middle East countries gradually realized the truth about hegemony . In addition, , the developing countries represented by China, are increasingly tending to join forces to keep warm, which makes the internal contradictions in developed countries never have the chance to erupt and form a full-scale war.
Of course, unless most capitalist countries reach an agreement to jointly plunder the wealth of developing countries by launching wars; but that is difficult to achieve, because in this world, only the weak will choose to join forces, and most of the strong will only bite each other. This is the essence of the law of the jungle.
The reason why China can become a stabilizing force for maintaining world order has the most direct relationship with the path we choose. Therefore, as long as China does not resolve internal problems through war like developed capitalist countries, the Asia-Pacific region will not be in chaos and the United States will not have the opportunity to achieve its intentions.
After the above analysis of the world situation, we can return to the title of this article to discuss it. "The end point of capital chasing with all its might is actually the starting point of the communist journey."
The end point of capital chasing with all its might is through the free competition of market economy to make everyone full of confidence in their future, and constantly strive to improve their living standards and happiness index for a better life, and the capital market that achieves this goal is the real estate market.
The end point that capital is pursuing is to make every company confident in its future through free competition in the market economy, and to create greater value, it continues to invest to improve its technical level and business capabilities. The capital market that achieves this goal is the stock market.
The end point that capital strives to pursue is to make every country full of confidence in its future through free competition in the market economy, and to realize its common aspirations, we insist on improving governance level and operational efficiency. The capital market that achieves this goal is the bond market.
Why does the phenomenon appear? The American media described that "31 trillion US dollars will be withdrawn from the US stock market, bond market and real estate market, and will not continue to flow into the US market as the market expects." The fundamental reason is that this country, this country's enterprises and this country's people have never had the courage to face up to and resolve their internal contradictions, and always tried to solve their own problems through external means. Therefore, they did not gain enough just "confidence" from their own country, and could not achieve that everyone and every company could create value and share wealth "fairly, fairly and openly".
Although we cannot 100% pat our chest to ensure that our country can achieve the above goals; however, the starting point of our journey is to make everyone and enterprises believe that for the better life of the people and the value creation of corporate organizations, the Party and the country are constantly working hard to improve governance and operational efficiency, thereby attracting social capital to continuously pour into the "housing market, stock market and bond market", expand the interest cake through a more open market economy, and achieve common prosperity through a fairer distribution mechanism.
What we the general public need to do is to always be full of confidence in this country and realize the value of life through continuous struggle and continuous investment; and promote and popularize these verified methods through our country, and strive to apply them to the practice of building a community with a shared future for mankind, reach a consensus with our competitors, and jointly build a more advanced form of civilization and a better future for human society.
Note: The author of this article is Wu Lifeng, a researcher at the "Qin'an Strategic Think Tank", and is an original work on this platform. In the new year, I wish everyone join hands, overcome the epidemic, curb hegemony, and move towards a better future together.
