The Global Economy Is Slowing Down And Debt Is Rising.

Global liabilities rose and foreign exchange reserves decreased. Recently, some emerging market central banks have played a small trick by borrowing money into the US dollar to support the exchange rate in the form of long-term market intervention in foreign exchange. Recently, a research report published by Goldman Sachs showed changes in foreign exchange reserves in the emerging market. The research report was included in the exchange rate adjustment and forward exchange rate swap accounts. The change in foreign exchange reserve was shocking. For example, Malaysia lost 43% of its foreign exchange reserves. Thailand, Singapore and South Korea lost 15% ~17%, Indonesia nearly 10%, but China lost the smallest, only 4%. Thailand has dropped by 17%, Singapore has dropped 16%, Korea has dropped 15%, Indonesia has 10%.

Not only that, the debt rate of countries continues to rise, emerging market countries are rapidly growing to the developed countries, and the world is entering the peak of debt. Countries do not have the guts to really tighten money in this case, which means that the debt leverage is broken.

The real economy is frustrating. As of September this year, emerging economies, financial markets, foreign exchange markets, and the political risks of various countries themselves. Because of the economic slowdown, corruption and politics in some emerging market economies.

As the two largest economy, the market's expectations for China's economic growth have been reduced, and GDP stays at 6% to 7%. The US economic data are mixed and far from good. In the week ending October 9th, the number of initial jobless claims in the United States and the average weekly initial attendance dropped to the lowest level in 42 years. When the number of unemployed people fell to the lowest level in 2000, the employment data may have covered the decline in the employment rate. The classified index of the state of New York and the Philadelphia Federal Reserve released on the 16 day showed that the manufacturing industry in the United States deteriorated, new orders were at a low level for many years, and New York was -18.91, the lowest level since November 2010. Philadelphia is -10.60, the lowest level since June 2012. Number of employees Decline and deteriorate, New York is -8.49, the lowest level since December 2012. Philadelphia is -1.70, the lowest level since January of this year.

The rising price did not dispel panic. The deflated index of the black swan index launched by the Chicago Options Exchange (CBOE) showed that the fear of the black swan event reached an unprecedented level in the current market. The deflected index has risen by more than 30% since the end of September, the highest since 1990.

　　 Investor Although the enthusiasm is high, the chill will take place in the fire. However, there will be a big withdrawal of funds when there is a stir. The fuse may be the Fed's rate hike expectations. It may be the collapse of the Chinese stock market. It may be the Middle East refugee tide. The panic of investors is correct, and there is a long and clear expectation of prices without capital products.

This is the case with the US dollar. A clear downward trend in the US dollar did not occur, and the US dollar fluctuated in the inter region. Since June of last year, the US dollar has been rising, until the 4 month of June this year, the US dollar index suffered a shock, and then the dollar shock rose to around 98. Since then, the US dollar has continued to fluctuate in the range so far, and we have been exploring the 100 downward trend in March this year, which has fluctuated between 94 and 99. From September 25th to October 14th, the US dollar went downhill. The famous financial blog Zerohedge pointed out that since the September 2013, the US dollar index has shown a "dead crossing" for the first time. When the past four 50 day moving average fell below the 200 day moving average, three times the US dollar index fell sharply, but this time, the index failed.

The market is busy, killing in a moment. RMB Short time, kill the dollar for a long time, around the U. S. dollar interest rate forecast caused a series of shocks in the global market. Until September, the Global Forecast of the Fed's interest rate increase resulted in large fluctuations in emerging market currencies.

The Fed did not raise interest rates, the market reversed, and the emerging markets rebounded. The fundamentals are not strong, but prices are rising. The only reason is capital. Global quantitative easing makes the US dollar, euro, Renminbi, yen and so on become arbitrage currencies.

When quantitative easing is difficult to sustain and credit is difficult to maintain, a partial debt crisis will break out. In theory, a highly indebted country like Japan will be the first Domino to fall, depending on whether international investors continue to believe in the yen and maintain quantitative easing in Japan. As emerging market countries are now using foreign exchange to maintain stability, if the economy can not improve, credit is relatively weak, will become the most vulnerable part of the chain.

The best way is to keep the status quo until the debt is bursting and find the buyer, so that no policymaker will take the blame for the debt crisis. As a result, market black swans and volatility will become normal. We may call it a new global normal. This is what we see at the moment.