Niu Wenxin'S Interpretation Of The Fed'S Error In Waiting For China

Will the Fed decide to raise interest rates at the meeting? I don't think so.

I have only one feeling: the Federal Reserve is waiting.

Wait for what? Wait for the US economy to be further restored?

I think the Fed is waiting for China to make mistakes.

What's wrong? China's policy has made a major mistake.

China's monetary policy must be formulated on the basis of the domestic economic situation and the principle of domestic demand pulling, and must not be abducted by the exchange rate. This is the core policy concept of China at the moment.

Otherwise, all fiscal means to boost the economy will be destroyed by the relatively tight monetary policy.

Obviously, if the Fed raises interest rates, the appreciation of the US dollar will inevitably lead to a corresponding depreciation of the renminbi.

Then, in what way does the renminbi depreciate? Is it stable or excessive? Or that is the key to the problem.

If it is a smooth pition, what will be the cost of China's foreign exchange reserves? If it is a vicious depreciation, then the United States will be happy.

Because it just buys China's depreciated assets with appreciation Currency.

Then the depreciation of the renminbi and the depreciation of RMB assets are another key issue.

We must analyse carefully.

If the renminbi is controlled steadily and depreciated slightly, the price of RMB assets should rise rather than fall.

This is often reversed by the Chinese economists, especially the securities circles.

Why RMB depreciation and RMB asset prices should rise? This is like inflation. The depreciation of the renminbi is due to the increase in the relative supply of RMB to the US dollar and external inflation.

If we regard assets as commodities, then should it be more expensive or cheaper to buy goods in Renminbi under the inflation background? Is it right? It is expensive at the time, so do not make a mistake. The depreciation of RMB should be a process of rising RMB assets, not a process of falling.

Then why do people worry about the depreciation of the renminbi and the fall in the price of RMB assets? Because people are worried that the RMB will have a vicious cycle of depreciation.

If there is a vicious downward spiral, everyone is worried that "the rise in the price of RMB assets will not be able to hedge the depreciation of the renminbi".

Therefore, we must realize that when the RMB is expected to depreciate slightly, that is, when China's monetary policy is relatively loose, the stock market should go up rather than fall.

But the rapid and significant depreciation of the renminbi is different.

When people think that asset prices can not keep up with the loss of currency depreciation, RMB assets will be sold off, and there will be excessive depreciation of the renminbi.

So we must be clear about what the renminbi is like.

China's advantages outweigh its disadvantages. What kind of devaluation will do more harm than good to China?

I firmly believe that the US hopes for a rapid and significant depreciation of the renminbi, rather than a slow and small depreciation.

Because the rapid and sharp fall of the renminbi is of great benefit to the United States.

This is precisely the key reason why the US interest rate hike needs to wait, because it hopes that its own interest rate increase can bring maximum benefits to itself.

What is the advantage of the huge, rapid and vicious downward trend of the RMB? He can take advantage of the appreciation of the US dollar, help the us to invest in the foreign currency, and acquire the real assets of China with a large amount of money that has been injected into the water. On the one hand, it controls China's economy in an all-round way, and on the other hand, it makes the water injection dollar more solid and eliminates the US dollar bubble.

This is precisely the key to winning the battle in the currency war.

What kind of policy is wrong in China? First, the excessive opening of China's capital account will create the necessary conditions for the US dollar to be injected into the water; second, the RMB can be freely convertible, which is the basic condition for all the people to sell the renminbi. Third, the RMB exchange rate is free floating. This is the basic condition that allows RMB to tumble under the condition of runaway. Fourth, in order to exchange RMB for SDR, the above conditions are exchanged.

Facts have proved that:

And the whole developed economies are more worried about a slight depreciation of the renminbi.

Some time ago, the central bank made a sudden devaluation of RMB by 3% through the reform of the intermediate price mechanism, which shocked the world.

I think this is a small depreciation within the controllable range.

Why do we disturb the world? Why did the US stock fall? Why did it even disturb the pace of the Fed's interest rate increase? I think this is precisely what the developed countries such as the US are worried about and do not want to see.

So, after that, we can see that they stabilize the domestic market on the one hand by "understanding or recognition is to push ahead with reform".

The currency, which created panic in China's stock market, and even wantonly released the public opinion about how the currency of developing countries was affected by it, I think, its purpose is to prevent China from allowing a small depreciation of the renminbi and preventing the correct choice of China's monetary policy.

The implementation also proves that it is unnecessary to say that capital account liberalization is the opening of regular accounts for more than 10 years. It has been mixed with a large number of "overseas arbitrage hot money" in China's foreign exchange reserves.

For example, the renminbi can hardly be depreciated. As long as there is a slight depreciation, the huge foreign exchange reserves have been cut down. Moreover, they have made a big public opinion: according to the rate of foreign exchange loss, the Chinese currency will persist for 10 months at most, and in order to create a panic in China's currency, and then kidnap China's currency policy, it can only be tightened, not loose, and exacerbate the downward pressure on China's economy.

You know, when China's PPI (enterprise commodity price) has a negative growth of 5.9%, even if the benchmark lending rate has dropped to 4.55%, the real interest rate of Chinese enterprises will be as high as 10%. How cruel is this interest rate?