Central Banks Cut Interest Rates More Frequently Since The Financial Crisis.

After the collapse of the 2008, the global economy has not increased its leverage but doubled its leverage. Since 2007, global debt has increased by 40%.

The growth rate of the global economy is decreasing, and the world bank has lowered its GDP growth rate from 3% to 2.5%, while emerging economies such as Brazil and China are struggling.

The total reserves of other countries except the United States have fallen by more than 1 trillion US dollars from the peak of 2014, mainly because central banks sold dollars to offset the adverse effects of capital outflows and commodity price declines.

Unlike the pre emptive central bank initiative, it means that although the market may still look healthy and volatility is still low, the central bank expects to take monetary measures to avoid future market collapse.

In the process of preemptive elimination of risks, decision makers rely on faster changes in market data instead of relying on slower basic economic data.

Despite good intentions, pre emptive initiatives have artificially suppressed volatility and encouraged the spread of moral risk in major markets to stimulate dangerous reflexivity.

The central bank changed the "unknown risk" to "unknown unknown risk", which caused the hidden danger of the dangerous feedback loop.

The last time the world economy experienced such a sharp decline in reserves was on the eve of the collapse of the economy in 2008.

Despite the upward trend in cross asset volatility over the past thirty years, the market is still proud of the expectation that "central banks will support asset prices".

As central banks around the world compete fiercely in the endless cycle of devaluation, the doomsday clock is closing in on the midnight bell.

Volatility system change and

The flames of the crisis ignited the simple expectation of a slight increase in US federal funds rate, but such an expectation will never come true.

The negative response of the global market to this symbolic reduction of liquidity is remarkable.

Central banks are afraid and unwilling to normalize monetary policy, but the artificial overvaluation of asset classes can not be maintained indefinitely in the absence of fundamental growth in the global economy.

In this way, the central banks are trapped in the cage of their own design, and the people of the world are also trapped.

When everyone realizes that he can trust his ability

These institutions are actually the source of these risks, and the next big crash will happen.

The truth is that the Central Bank of the world can not abolish the unusual monetary policy on the premise of not causing a complete collapse of the system, but the longer they wait, the more dangerous their credibility is, and the inevitable economic collapse will be more serious.

In the prisoner's dilemma, the central banks of the world have set up the most volatile pactions in history.

The preemptive war describes the elimination of violence before a perceived threat becomes a reality.

Since 2012, the Federal Reserve has been committed to combating the pre emptive war on financial risks.

They were forced to emulate the self strengthening cycle of the devalued currency and the crazy game of prisoner's dilemma.

This informal but easily observed policy will create an unconscious consequence of "risk socialization of personal gains" and bring deeper shadow risks to the global economy.

The preemptive central bank initiative is a completely different concept from the mainstream view of "central bank selling power".

The traditional concept of "central bank selling power" refers to the central bank's measures to deal with the crisis before it breaks out.

The reduction in interest rates in 1987, 1988 and 2007 to 2008 and the first and second round of quantitative easing are all responses to weak economic data, surging financial pressure, and continuous and substantial losses in credit and stock markets.