The Stock Market Two Way Battle Market Looks Very Strong.

After the embarrassment of fusing yesterday's first trading day, this morning, according to Bloomberg news, the national team went to the bottom of the stock market.

Today, the offshore exchange rate of the RMB against the US dollar has rebounded sharply after hitting 6.63 below the intraday rate, and the temperature has rebounded after the fall of the offshore renminbi, which is now trading below 6.5.

We can see that both the stock market and the foreign exchange market are facing great downward pressure. Under such circumstances, the government must not use funds to intervene.

The stock market is trading on both sides of the market. So does your family know that?

The essence of the so-called bailout in China is to counter the trend and distort the market.

It is a common sense that all financial people know about market trend.

The result of sailing against the current is not that we do not advance or retreat, but that we are destroyed by ships.

Whether in the mystical national team in the stock market or in the Central Bank of the foreign exchange market, the funds used will eventually be government funds.

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In China, the government has been in a state of massive bleeding because of the need for Renminbi.

The size of the central bank's foreign exchange holdings decreased by 315 billion 800 million yuan in November, which was close to the highest historical decline of 318 billion 300 million yuan in August.

Over the same period, the foreign exchange quota of financial institutions was reduced by 221 billion 300 million yuan.

Foreign exchange reserves stood at US $3 trillion and 690 billion at the beginning of the year to US $3 trillion and 430 billion today.

Today, the stock market is once again halting, and the national team has intervened.

Last year, the national team spent 2 trillion yuan on the stock market disaster rescue battle.

Although this market crash is not as bad as the stock market crash of June last year, the more frequent the intervention of the national team and the greater the proportion of the national team's capital, the smaller the stock market's future driving force will be.

(no one will be foolishly helping others to raise their share price).

At present, China's financial situation is not optimistic.

At the end of last year, even experts and think-tank scholars suggested that the government increase its debt financing to support financial expenditure.

According to the Ministry of finance data, by the end of November last year, China's accumulated budget revenue was 139935 billion yuan, while the cumulative fiscal expenditure was 150223 billion yuan.

Over 1 trillion of the deficit has already put great pressure on the government.

Moreover, the direction of future policy is mainly based on fiscal expenditure to support economic growth.

The financial strength accumulated over the years is being gradually weakened.

In fact, excessive intervention in the market is not only a permanent solution, but also a heavy burden on itself.

From the foreign exchange market,

It is difficult to avoid the fate of depreciation whether from fundamental considerations or policy considerations.

I have mentioned in the China gold net that the Fed's interest rate increase has been opened, and that the US dollar will be sought after by the market will be an inevitable trend in the future.

Today, the dollar shortage in Africa, South America and other places is a harbinger.

The downward pressure on China's domestic economy is obvious. No matter whether the pain is caused by economic pformation or its own unsustainable economic mode, the downward trend is inevitable.

PMI and PPI continue negative growth, overcapacity can not be resolved, unemployment is going to break out, banks' non-performing loans are rising and debt default is frequent.

Fundamentals do not support the strength of the renminbi at all.

The policy aspect is even more worrying.

The central bank's call for a cut in interest rates will be bigger and bigger. Easing policy will also be the future regulatory policy.

And landing capacity will further suppress economic growth.

The 15 year protection period of WTO will expire this year, and the government will be forced to reform and continue to relax its policy.

From the stock market, if we want to study the intrinsic value of the stock market, the price of the stock market in China is already an Arabian tale.

In 2013, China's stock market also hovered around 2000 fish.

The economic situation at that time was not healthy, but it was much better than before.

This round of stock market rise is entirely due to favorable policy support, conceptual speculation and leverage bubbles.

It can be said that the current stock market price itself is not normal.

In order to maintain market confidence, the national team contributed to support this distorted price.

This was originally a violation of the law of market development.

Without saying that the outcome will succeed, if it is an investor who firmly believes in value investing theory, it will understand that this unhealthy trend will only lead to even more painful tragedies.