Global Policies Join Forces &Nbsp; Commodity Bull Market Illusion Will Be Shattered.

2011/5/12 10:59:00 48

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Global Policies Work Together To Enter Commodity Bull Market

In May 11th, the National Bureau of statistics released the April macro.

Economics

Data, the most noticeable April CPI rose 5.3%, up 0.1%, PPI rose 6.8% compared to the same period, the ring rose 0.5%.

In this context, what we must consider is whether the trend of economic risk is the "active turning" that is popular, or is it the "hard landing" that doctorate has put up at the end of the day?

Besides, how will the commodity market still be in the bull market illusion?

First of all, from a global perspective, the main contradiction between the world economy and governments is still the same.

inflation

。

From a broad macro level, the current global economic map is at the critical stage of incubation from the locality, regional growth to comprehensive and symbiotic growth. It is also the most vulnerable pition period. Therefore, any risk infection can be triggered.

In other words, the current inflation problem may be a cold for the global economy, but because the 2011-2012 year is the overlap of the global political cycle and the economic pition period in time series, therefore, if we can not get the timing and combing and treatment, it is likely to induce much greater risk than we can imagine.

Secondly, for China's economy, there seems to be a problem behind the inflation problem.

I believe that it is in the government that "stabilizing prices" has achieved initial results.

Results

At the same time, a more complicated problem has emerged, namely, the contradiction between total control and structural imbalances, and this contradiction is further aggravating and gradually spreading in the field of entities.

Looking back over the past two years, under the dual driving of ultra loose monetary credit environment and strong economic recovery, domestic enterprises have gone through a rare golden development period, while operating scale and capacity expansion, capital leverages and capital and liabilities structure have also risen sharply. However, after the large scale of the business, they suddenly encountered severe tightening and regulation by the state. The capital chain tension caused by the excessive capital leverage of the enterprise was rapidly pmitted to the upstream and downstream of the industrial chain, and then there were slow sales, inventory backlog and rapid expansion of accounts receivable. This is also the inducement of the large scale operating cash flow disclosed by the listed company's annual report in 2010.

The author believes that under the background of stabilizing prices, the economy may be trapped in a vicious circle of "monetary tightening - structural imbalance, -PPI high - monetary tightening", which indicates that the severity of the inflation situation (that is, the dual dimension of CPI and PPI) has not slowed down, but has become more complicated.

Moreover, does the circulation of vicious circle indicate the possible loosening of macro policy in the future?

The author thinks that the probability is not great. By borrowing the rapid development of the Chinese economy in the past ten years, especially in response to the international financial crisis, the Chinese government has fully accumulated and has the macroeconomic decision-making power of economic governance and regulation. In other words, the government's diagnosis of the macroeconomic operation is "spectrum", but it is somewhat weak for the treatment of local trauma or structural chronic diseases, and the experience and prescription of economic structural adjustment need to be tested in time.

On the contrary, under the condition that price stability and real estate regulation have not achieved significant results, if the policy is really loose, though it will moderate the pain of "monetary tightening - structural imbalance, -PPI high monetary tightening", but it will lead to more negative effects. Not only will the steady results of the price decrease, but even more serious is that the real estate asset bubble will come back again, which is totally contrary to the credibility of the policy and the macro Prudential Management Framework against the cycle, and the consequences are unthinkable.

Therefore, structural adjustment is bound to go through the throes, aiming at the right problems, and the sudden turn of policy in the second half of 2010 will hurt the economy and people's livelihood.

On the outside, CME's policy signal to raise the margin release of crude oil futures shows that the last policy body of the world's largest economy and the tacit attitude towards inflation has begun to express real concerns and negative views on the continued rise in oil prices. In other words, the joint efforts of the whole ball policy have come into force, or the bull market illusion of crude goods, such as crude oil, copper and gold, has been declared shattered.