The New York Fed Has Given All The Details.

"The most sure thing is (the Federal Reserve) shrinking the scale."

On 7 12, at the summer strategy meeting held by Shen Wan Hongyuan securities in Qingdao, Xu Xiaoqing, chief economist of Tuen & amp; Asset Management Limited, said that the certainty of scale reduction is even higher than that of raising interest rates. It needs to gradually restore the unreasonable state to a reasonable level and reduce the number of assets to the table.

Xu Xiaoqing said, in fact, the New York Fed has given all the details of shrinking the table, including how much it shrinks every year, how much it comes from treasury bonds, and how much it comes from MBS. In short, the United States needs to reduce its balance sheet by 1/3 for three years, from 4 trillion and 500 billion yuan to 3 trillion yuan (US dollars), and the details are very clear.

This year, the market is concerned about the beginning of the contraction of the global central bank.

In this regard, Xu Xiaoqing said, after 2014, whether China or the United States, the two central banks' assets and liabilities have not increased again, the main growth is Japan and Europe, but the ECB's balance sheet is due to a sharp decline in 2012 to 2013, now higher than the original recovery level.

Xu Xiaoqing pointed out that in the past two to three years, in fact, there has not been any significant change in terms of total size, but asset prices are still rising.

Is the balance sheet of the global central bank so important? The central bank's balance sheet is the concept of basic currency. To a certain extent, the balance sheet of the central bank is reverse to the monetary growth.

Only when money does not grow can the central bank expand its list.

The central bank will only shrink when growth grows.

He further said that in the past two to three years,

The ability of self credit expansion has been gradually restored.

M2 growth in the US is picking up, and M2 in Europe is picking up, even Japan.

So in 2014, when the Federal Reserve began to stop the expansion of the debt table, the US currency continued to grow, and the US stock market was still rising, and it was not affected by the expansion of the balance sheet.

Xu Xiaoqing pointed out that if the Fed continues to tighten, every tightening will bring about a major crisis.

For example, you will believe that the "Curse" of the ten year cycle and the "7" are unlucky. In 1937, 1997, 2007 and 1987, there were not any stock disasters.

The continued tightening of the currency has triggered concerns about the crisis.

Xu Xiaoqing said, if the crisis can be predicted, will the Fed continue to tighten? The Fed can continue to deflate. It must be that it does not think there is a crisis. It must tighten up until there is a crisis.

Will the tightening of global liquidity lead to a crisis?

From 1937 to 1970, this is a long cycle of raising interest rates. It took 30 years to come to a crisis.

"If we talk about tightening every year, there will be a crisis. I'm sorry, you have missed most of your investment."

He said, shrinking the table and

It's two different things.

The interest rate increase is based on inflation. In the case of full employment at that time, the core issue of whether the United States could raise interest rates, or the core issue of the great divergence of the Federal Reserve, is whether the inflation that the US now expects less than is expected to be temporary or persistent is the essence of the problem.

Historically, the United States has never been raising interest rates without inflation.

Therefore, raising interest rates must correspond to the performance of the real economy.

Xu Xiaoqing believes that shrinking the table does not look at inflation.

At present, the certainty of shrinkage is higher than the certainty of raising interest rate. It should gradually restore the unreasonable state to a reasonable level.

At present, the most decisive is to shrink the table. The most uncertain thing is whether the ECB will retire.

The difference is that the US dollar goes from the upstream cycle to the downlink cycle, while the US economic cycle has entered the second half of the recovery, and China has entered the tail of the downlink cycle.

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