The Central Bank Raises Interest Rates To Take State Capital Operations. In Fact, The Central Bank Has Hedging Means.

Many people think that in order to squeeze asset bubbles, it is impossible for the central bank to go mad to break the bubble and let the market collapse. The only reason for the central bank to do so is to let the genuine gold and silver enter the market and consolidate the foundation before the high leverage Ponzi scheme is out of control, so that the market can gradually return to the right track when the collapse risk of the stock market, the real estate market and the bond market can be controlled.

The central bank's disguised interest rate increase will not suppress the real economy.

Most of the real businesses could not get the cheap money from banks. Now a real estate company financing from the private sector, the final interest rate is at least 10%.

Raise 10 to 20 basis points to close these enterprises.

Since the second half of last year, the central bank has tightened money in disguised form by reverse repo, SLF and other measures. This is not to impact real estate and stock markets, but to prevent financial risks from breaking out, while allowing private capital to enter the market bottom.

On February 3rd, the first trading day after the Spring Festival, the central bank raised the open market operating interest rate. The 7 day, 14 day, and 28 day reverse repo rate rose 10 BP compared with the previous period.

According to Reuters, citing sources, the central bank also raised the rate of standing loan facility (SLF) on the same day. Overnight varieties raised 35BP to 3.1%, and SLF increased 10 BP to 3.35% and 3.70% respectively in 7 days and 1 months.

On the first day of the festival, the central bank did not celebrate the Spring Festival. "The earth does not explode, we do not have a holiday, the universe does not restart, we do not rest."

Before the holiday, it was not idle. In January 24th, the winning rates of MLF6 and 1 years in 22 financial institutions increased by 10 basis points over the previous period, the first increase since the establishment of MLF in 2014.

Only large enterprises, local governments that can borrow enough cheap money, and powerful and highly leveraged investors who have the power to get cheap money will be afraid of these dozens of basic points.

The bond bear market is a foregone conclusion. In February 3rd, black futures closed a collective drop, of which the main heat volume dropped by over 7%, while the screw fell by over 6%. Iron ore and coke fell more than 5%, coking coal fell over 4%, and rubber fell nearly 4%.

The rise in bond yields is bad for the government. The black line is plummeting, and resource companies are shouting.

However, the government has hedging means, and the drop in state debt can allow institutions to take up the market and maintain oil and coal prices by continuing to reduce production capacity.

In 2016, we went to production capacity and went stock for a small test. The price of coke and coking coal futures increased by more than 200% during the year. The price of steam coal and steel doubled, and the price of Chinese cabbage changed from the price of cabbage to the price of seafood.

The recent PMI index has proved that raw material companies are not unhappy, and the weak dollar policy of trump students has led to less serious outflow of funds.

It provides space.

The central bank tightens the money, which is forcing the radical commercial banks and dignitaries to be honest. These banks carry out short-term interbank borrowing on a large scale and are keen to make quick money. The money flows to the powerful financial bigwigs like floods. Now that the rules are changed, the less energy investors will step into the mud pit.

Of course, the tightening of the money is not conducive to the property market and stock market, but the central bank adopts the means of capital replacement for the stock market, so that the private banks can replace the real money and make the market stable.

Trading volume during the Spring Festival shows that the property market has entered a cold winter in some areas, but this is not the credit of the central bank, but the credit policy of last year's property market.

Mortgage loans rose and property market snowed.

By the end of 9 2016, the average interest rate of bank housing loans was 4.52%, and the interest rate of the 10 year government bonds was only 3.13%. According to the current 4.1% national debt interest rate, the reasonable mortgage interest rate should be around 5.5% from the historical data comparison, which is 100bp higher than the current level.

5.5%

If you can borrow more than ten years of money, you have to laugh at your dreams. Mortgage interest rate rises far more than the first pay ratio. Raising the down payment ratio directly cuts off the real estate engine.

From last year to this year, the property market policy is obviously maintaining stability, lowering the high price property market and supporting the unpopular city.

Without accident, this year real estate will keep pace with the stock market, the index is stable, and the market heat will drop.

On the one hand, the government relies on capacity and pension to support the market. On the other hand, it resolutely suppressed the leveraged bull market in the first half of 2015 and suppressed the stock market's empty handed white wolf. This year, it will also inhibit cash flow, mainly in order to make Ponzi fraud not out of control.

It is a dream to think that the central bank will raise interest rates in disguised form to make the stock market and property market crash.

While the market is stable, we should gradually change the rules of the game, reduce the leverage of financial institutions, and let the private wealth directly enter the capital and money market. This is the essence of this currency reform.

Don't forget that the central bank is not using the means of raising interest rates. Instead of depositors, it is the central bank. If the situation is out of control, the central bank will immediately use the means of increasing reverse repurchase and lowering interest rates.

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