The Euro Has No Bottom &Nbsp; What Needs To Be Adjusted Before It Rises?

Sunday, June 14th.

China's A share bull market has started since November 2008, and although the decline has continued since August last year, it does not mean that the Chinese economy is facing another recession (Double-Dip). It looks like the adjustment in the first phase of the bull market.

The government has adopted a series of regulatory policies to rectify excessive speculation in the mainland, resulting in a disaster.

The mainland property price has not fallen, and the A share market has undergone a major adjustment.

As an investor, in addition to joining the bull market, another entry point should be the first phase of the bull market adjustment period, estimated from May to July this year.

The euro exchange rate has not bottomed out.

Last year, the euro seemed to be replacing the US dollar. This year, the euro has become the most unpopular currency.

From the trend, the euro still has room for reduction, for example, see $1.16 (the euro rose from $1.1678 in January 2006).

The price of gold will form a double peak at 1250 US dollars, and the resistance will be very strong in the future. Although it does not exclude that it can rise to US $1300 in the future, it will also be in the twilight years.

Unlike in 1970s, inflation pressure was very high in that year. On the contrary, despite the government's spamming of banknotes in recent ten years, the global inflationary pressure is still small.

It is worth noting that in April this year, the share price of gold shares with the gold price trend, reflecting that this year's gold price rise is not due to inflation pressure, but because of the euro currency crisis. Once the euro crisis is over, be careful of the gold price adjustment.

The situation is like the rise in oil prices in the first half of 2008, but oil stocks fell, and oil prices finally fell.

This year, the Vietnamese shield has depreciated by 13%, the South Korean won down 17%, and the new Taiwan dollar also fell by 6%. Only the RMB remained against the US dollar in July 2008, unchanged.

Why do people still believe that the RMB can appreciate? The supply of cheap labor in China has entered the conclusion since 2007. After the Foxconn (2038) incident, it deteriorated even further. If the labor cost could not be pferred to represent the mainland manufacturing industry, it would enter a profit or loss period. If it could be passed on, representing the end of the depreciation period of the light industry products, the price of the US companies that relied on China to provide cheap products would be greatly reduced, for example, the P&G would be a big drop.

Through printing money, market prices often deviate from the "normal trajectory", no longer reflect the actual value, the distortion is increasing, so that the price from one extreme to the other extreme.

In other words, the initiator of the bubble is the government, and the government is the one who stabbed the bubble later.

Since the US dollar was decoupled from gold in 1971, the minimum restrictions on currency printing have also been lost.

As a seasoned investor, it will benefit from knowing when to join and when to quit.

The trend is rising, falling or wandering. The driving force behind this is investor sentiment and capital flow rather than basic factors.

The above is why the trend investment law gradually replaced the value investment act since 1971.

As for the trend, it can provide some help, but the trend is different.

For example, since 2000, the upward trend of gold prices is a trend. As for short-term gold prices rising or falling, we can take advantage of trend analysis to catch them.

Since November last year, the trend of the US dollar has been upward, and the trend of short-term rise and fall has been captured.

In the first quarter of last year, when the US stocks began to pick up, many Hong Kong stocks could even bring about double or more returns, such as Jiangxi copper (358), CNOOC (883) and PetroChina (857).

In the first quarter of this year, my old Cao Zhihui had been unable to find projects that would double the opportunity. The stock market had no fairy tale. In May, friends were groaning, and by June their friends were still weak.

Officials who believe in Keynes theory last year urged governments to intervene in an unreal recovery.

You may forget that the allocation of productive forces under the guidance of the government does not meet the needs of the society, and the cost will eventually be borne by the people.

The experience of China's founding in 1949 to 1978, or the situation in Japan since 1990, has already been proved.

For immediate interests, people continue to support the government's involvement in the economy, resulting in one after another bubble and crisis.

For the Hongkong economy, the rise in the US dollar is a factor of interest.

For example, since 1995, the US dollar index has rebounded to the end of 2002, causing Hongkong property prices to fall from August 1997 to September 2003.

The revaluation of the US dollar at the end of 2002 led to a revival of Hongkong's economy since 2003.

Since December 2008, the US dollar has gone down and rebounded. Since March last year, the US dollar has dropped again. By the end of January, the US dollar will rise again. Will the Hongkong economy slow down again this year? As an investor, it is advisable to sell weak stocks in the first quarter of this year, leaving only strong stocks and increasing the proportion of cash on hand.

Have you done it yet?

Mainland housing prices rise again after adjustment

In 1950, if you invest $1000 in the S & P Five hundred index, it will rise to six hundred and twelve times in December 2007 to 613013 US dollars.

However, if you miss thirty of the biggest months of the month, you will have only 35404 dollars.

However, if you can avoid thirty worst months, your $1000 investment can be turned into $9509094! So you can see how important timing is.

The advantage of not making profits is that you can automatically avoid big losses and let profits run forward. You can achieve a dream of turning 1000 dollars into 9 million 500 thousand dollars in sixty years.

The interest rate of RMB ten - year bonds dropped from 3.7 points a few months ago to 3.3 weeks ago, representing the smallest chance of raising interest rates for the renminbi in the future.

China's GDP growth rate may be reduced from 11.9% in the first quarter to about 10% in the second quarter.

In order to suppress real estate, the government of Beijing has raised the reserve requirement ratio of banks. The result is that property prices haven't fallen, and the Shanghai Composite Index has fallen by 23% this year.

From the perspective of western economic development, urbanization will inevitably lead to rising housing prices. With the advent of the industrial revolution era, the city has become a concentrated place for population, wealth and culture. People continue to flow from the countryside to the cities.

China's urbanization rate in 1978 was only 17.9%, and in 2009, it had reached 46.6%, an average annual increase of 0.92%. The average price of property in China rose from 411.4 yuan per square metre in 1987 to 3800 yuan per square metre in 2008, an average annual increase of 11.2%.

From 2009, the urbanization rate of Japan is 66.3%, which represents the further urbanization of China.

In other words, the price of property in China's first tier cities has a downward pressure in the short term (such as two or three years), and in the long term (ten years and eight years) there is continuing upward pressure.

In 1997, China's urbanization rate just reached the 30% level and then entered an accelerated period.

At present, Japan has a total population of 66.3% in the city, 81.2% in South Korea and 69.6% in Malaysia.

From 1997 onwards, there will be a large influx of population into cities in the next thirty years.

Take Beijing as an example. The first five months of this year accounted for 50% of the total number of buyers in Beijing, indicating that urbanization has made the demand for real estate strong in big cities. This trend is unlikely to be reversed before 2025.

Urbanization has become a tool to drive China's economic growth and pursue the rise of GDP. Real estate has become one of the most important pillars of the economy. It directly and indirectly leads to the development of many related industries.

At present, there are as many as more than 60 kinds of products that are directly related to real estate, and more indirect ones, such as decoration, furniture, household appliances, automobiles, etc.

Of the total consumption of 12 trillion yuan last year, 46.6% came from real estate.

Deutsche Bank Peter Hopker disagreed with China's real estate bubble, but agreed that property prices in the mainland had to be adjusted for several quarters.

In May 31st, the central government announced the State Council's approval of the NDRC's "notice on deepening the reform of the economic system in 2010" - the gradual promotion of property tax reform. At present, Shanghai and Chongqing responded to other cities' wait-and-see expectations, while the once heavily reduced housing market entered a gradual rise in June.

In 1990, Japan began to levy property taxes, and property prices collapsed immediately. Twenty years later, they did not get up again; on the contrary, the United States and Britain always had property taxes, but did not affect local housing prices.

The impact of levying property tax is unclear.

As early as October 1986, China had already passed the right to collect property tax. At that time, for the purpose of operating housing, residents' housing was temporarily denied.

This time, the Shanghai government intends to levy a 6% tax on the property of "Seventy square meters or more". Another non Shanghai household resident who can not pay taxes for more than three years should also be taxed.

For China, the result of property tax is Japan's response or the Anglo American reaction?

Some people worry that similar to Japan, because China is just like Japan, there is no taxation in the past, once the levy is very influential, on the contrary, the British and American governments have always been taxed, and people are already used to it.

In addition, the guidance on speeding up the development of public rental housing jointly formulated by the seven departments, such as housing, urban and rural construction, was officially released in June 12th, mainly aiming at housing difficulties such as low income families in the city (commonly referred to as "sandwich level") because of their inability to rent or buy houses through the market, and become victims of rapid urbanization.

According to the relevant guidance, housing supply in the future can be provided to public rental housing through new construction, renovation and acquisition, and strictly controlled under sixty square meters. The term of the contract is generally three to five years.

Public rental housing can only be used for tenants to live on their own, not to lend, sublet or idle, nor to engage in other business activities.

If the lessee violates the regulations, he shall be ordered to withdraw.

In case of arrears of rent and other expenses, the unit can be directly deducted from wages.

The central government provides capital grants to local governments in appropriate ways, gives tax incentives to construction and operation, and encourages financial institutions to issue long-term loans, and supports eligible enterprises to raise funds through issuing medium and long-term bonds; and explores the use of insurance funds, credit funds and real estate trust investment funds to expand the financing channels for public rental housing; and implements "who invest and who owns", and investors' rights and interests can be pferred according to law.

The above is mainly handled by the provincial government and implemented by the municipal and County People's governments.

In other words, China is vigorously developing low rent housing.

Since the founding of new China, housing has been implemented as a non commodity policy.

The first housing turned into a commodity was the garden of Shenzhen East Lake in 1979, mainly due to the failure of the planned economy in 1949 and the implementation of the reform and opening up policy in 1978.

Over the past thirty years, China's policy has overemphasized efficiency and ignored fairness, which has gradually polarized the society towards polarization.

The so-called thirty years of Hedong and thirty years Hexi is a historical cycle.

This is not a turning back, but a correction of the past thirty years of overemphasizing efficiency and neglecting the principle of fairness.

In the future, housing land will be divided into two types: ordinary housing and luxury housing. The dividing line is sixty square meters. However, there are still no specific plans yet.

For example, what is the proportion? In Singapore, it is 85% to 15%, that is, 85% of residential land is used for development housing for Singaporeans to purchase; 15%, residential land is a luxury house, and anyone can buy it.

Hongkong is 50% to 50%. At present, three million of the public housing estates provide accommodation, and three hundred and fifty thousand other HOS flats live in one million places, while three million and eight hundred thousand live in about one million private residences. Private housing is mixed, some are old buildings before war, and some are super class houses.

Japan is 15% to 85%, about 15% live in low rent housing provided by the government, and the rest are private residential units.

Different governments have different housing policies and produce different effects. It is hard to say which policy is good or bad.

Each country's housing policy has advantages and disadvantages.

In the process of urbanization, what policies the local government adopts will have a great impact on future property prices.

For example, about 85% of Singaporeans live in the government provided Apartments (similar to the Hongkong HOS). Only 15% (most of the foreign population) rent or purchase private property, so that Singaporeans can only buy a one thousand sq ft flat with only HK $100 million. The first payment is 30% (available for MPF payment), and then the annual payment is completed before retirement.

Owing to the massive supply of government housing, the increase in property prices is only about 5% per year.

The Japanese government regards residential property as a commodity, and the price of the house is determined by the market.

In 1990, three generations of talented people were able to afford a seven hundred and fifty foot residential unit.

Subsequently, the government announced the property tax levy, and the Japanese property price has dropped by 70% since 1990.

On the other hand, in recent years, the Japanese government has provided similar "HOS flats" property to the Japanese for rent or purchase, so that property prices in Japan can not rise in recent years.

Hongkong has dual line traffic since 1953. It has both low rent housing and private housing, and has been added to HOS in 1976. It will be cancelled until 2003. The last batch of HOS will be sold this year.

The above policies led to the early development of the Hong Kong people. For example, from 1967 to 1997, the residential property prices in Hong Kong rose from tens of dollars to 12000 yuan. On the contrary, only 97 years ago, the property buyers still made no money.

In the future, will China's housing policy be a Singapore model? (85% of the population is in the government provided housing group) or the Japanese model (85% people live in the housing provided by the private real estate developer); or is the Hongkong model, that is, the low rent housing and HOS flats account for half of the population and the private property accounts for half of the population? Which model is good? Each has its own advantages and disadvantages.

For example, Singaporeans can live and work in peace and contentment, because most of the Singaporeans are still living frugally in the long run due to the limited increase in property prices.

On the contrary, when Hong Kong people are rising in property prices, their personal wealth is increasing and their lives are luxurious.

China will soon announce the next "Five Year Plan", and it will have a clearer direction in housing policy.