On the early morning of September 19th, the United States unexpectedly announced a rate cut of 50 basis points.

This time, our judgment was wrong, but the overall analytical approach to the G2 financial war is correct.

In this round of the financial war, our side won, holding on until complete victory!

The 50 basis point rate cut is not only the United States raising the "white flag," but also doing so on its knees.

No matter how they use words to soothe, indicating that the United States shows no signs of recession, the Federal Reserve overwhelmingly agreed to a 50 basis point rate cut.

Facts speak louder than words; it is the United States that first could not withstand the tremendous pressure.

If the United States does not cut interest rates, it is highly likely that high blood pressure could lead to a "burst blood vessel."

This also indirectly indicates that the economic situation in the United States may be more serious than they claim on the surface.

This round of the G2 financial war was also very difficult for us, but fortunately, we ultimately won.

So how did we win this financial war?

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Why did the United States lose?

What are the impacts on us after the US dollar interest rate cut?

Let's answer these questions one by one.

01 First, let's review the process of this round of the most powerful financial game between the two major economies in history, perhaps we can find the reasons why the United States inevitably failed.

During Trump's term, he first initiated a trade war.

The trade war lasted a long time and did not achieve the desired effect.

However, during the latter half of his term, the global mask event broke out, causing the U.S. economy to also be unable to hold on.

Trump, for votes, exerted tremendous pressure on the Federal Reserve, against the dollar cycle adjustment, not only did not raise interest rates to collect "water," but also madly cut interest rates and unlimited QE to save the economy and increase votes.

However, things did not go as planned, Trump was removed from office, and Sleepy Joe came to power.

When Sleepy Joe took office, he was left with a mess.

On the one hand, there was the disunity between Europe and the United States in his own camp, on the other hand, there was Russia's strong attack, and there were also the huge economic losses and huge economic hidden dangers caused by Trump's trade war, etc.

Faced with this series of problems, the United States had to use the weapon of interest rate hikes to harvest other economies to resolve its own economic problems.

Therefore, Sleepy Joe's team planned the three-pronged conflict between Russia and Ukraine.

First, after the outbreak of war, the United States and Europe were once again tied to a war chariot and stood together; second, it effectively hit and suppressed the development of Russia, and its future prospects became even more uncertain; third, it drove a large amount of European capital to flow into the United States for risk avoidance.

On this basis, the United States also wanted to use interest rate hikes to absorb dollars from around the world, and also wanted to absorb the capital outflow from our country, thereby triggering the real estate and foreign exchange markets.

The United States' move was not to be underestimated, Europe was indeed at the mercy of the United States, and Russia was also trapped in the quagmire of war and could not make a move, but our country saw the move and took it apart, a series of divine operations, and actually dragged the United States in the financial game until the United States had to raise the "white flag" to cut interest rates!

02 So how did our country do it specifically?

In fact, in response to the United States' plans, our country also noticed.

As early as before the United States raised interest rates in March 2022, our country realized the problems behind the "crazy" house, and drew a "three red lines" for real estate companies, consciously controlling the scale of housing risks.

When the United States wanted to use interest rate hikes to detonate the "fuse" of real estate companies' dollar bonds, our country took timely action, strongly managed risks and directed blood transfusion, saving the big summer from falling, and effectively resolved the crisis, extinguishing the "fuse" to detonate the economy.

After the dollar's crazy interest rate hike, when our country faced the inevitable situation of capital outflow, on the one hand, capital control, this is a "blocking" means; on the other hand, it is to support the bond market as a reservoir, this is a "draining" and "retaining" means, that is, silently allowing bond fund pools to gather together to raise interest rate levels, narrowing the interest rate difference with the United States, easing the pressure of capital outflow, and defending the exchange rate line.

In addition, due to the conflict between Russia and Ukraine, many European risk-avoiding funds also chose to flow into our country, thereby reducing the pressure of capital outflow caused by the dollar interest rate hike in our country.

In the situation of attack and defense, the G2 financial war quickly entered a strategic stalemate, and it was a matter of who could not bear the pressure first and raised the white flag first.

When the time pointer came to the spring of 2023, the U.S. banking industry had a wave of closures due to interest rate hikes, and its scale even exceeded the subprime crisis of 2008.

The U.S. economy was on the brink of a cliff, but the United States did not cut interest rates, and it was hard to support, thinking that our country would not be able to bear it first and collapsed.

Therefore, the United States has been hard to support, and it has been supported until it cannot bear it and has to choose to cut interest rates.

That is, in the early morning of September 19th this year, it was the last resort for the United States.

Therefore, he also cut very fiercely, cutting 50 basis points at a time, indicating that the situation is not optimistic.

Now, the United States wants to achieve a soft landing of the economy, and the difficulty is unprecedented.

Because he has missed the best time to cut interest rates for too long, and the long-term accumulated problems are not to be underestimated.

In the industry, it is believed that July last year was the last suitable time window for interest rate cuts, but the United States has been hard to support until August, waiting for our country to break out of the Evergrande crisis.

But unfortunately, our country has effectively resolved this crisis, and it has not caused too much of a storm.

This can be said to be a strategic misjudgment of the United States, even if it has used both public opinion warfare and financial warfare, it is also useless.

Therefore, we see that in the key negotiations in November 2023, the two sides did not reach an agreement, and the financial war continued.

In the time of the eagle, our country did not relax, but continuously strengthened the construction of the fortress.

For example, the major rectification of the financial industry, the emergence of new housing reform measures, the smooth convening of important meetings, etc.

As time goes by, our country is still holding on, and the United States is getting more and more burdened due to its own problems.

Therefore, we see that high-level officials such as Grandma Yellen and Assistant Secretary Sanders of the United States have requested to come to our country for consultation.

Our attitude towards these matters is that if we can talk, we will talk, and if we can't talk, we will endure until you can't bear it.

Overall, in this round of the financial war, the Sleepy Joe team can be said to have failed, raising the white flag and cutting interest rates by 50 basis points.

03 Why did the United States lose in this round of financial games?

The main reason is that our country withstood the dollar tide offensive of the United States, and the United States did not harvest our country.

At the same time, our country used a huge amount of dollar foreign exchange reserves, lending to other economies to repay dollar debts, helping them avoid being harvested by the dollar tide.

Therefore, in this round of financial warfare, the way of the dollar tide harvesting global assets that has been tried a hundred times before has failed.

During this period, the international influence of the RMB has been greatly enhanced, and the trend of de-dollarization has risen, and the hegemonic position of the dollar has also been greatly shaken.

Now that the dollar has cut interest rates, is the world economy safe and sound?

Can the United States solve the problems accumulated by raising interest rates?

It is highly unlikely.

Historically, every time the United States cuts interest rates, it is almost accompanied by the shadow of an economic crisis.

When interest rates were cut in the 1970s, an oil crisis broke out; when interest rates were cut in the 1980s, a savings and loan crisis broke out; at the end of the 20th century and the beginning of the 21st century, when the dollar cut interest rates, the Internet bubble burst; after the subprime crisis swept the world in 2008; shortly after the interest rate cut in 2019, the global mask event broke out.

The above are not simple coincidences.

Therefore, there is reason to believe that the dollar interest rate cut is the beginning of the crisis, not the end of the crisis.

Moreover, this time, it is not that the United States is cutting interest rates by 50 basis points beyond expectations, but that the United States cannot bear it and chooses to compensate for a total of 50 basis points of interest rate cuts.

Although it is a case of closing the stable door after the horse has bolted, it is too late, and the accumulated problems are difficult to return.

The United States has missed the appropriate time window for interest rate cuts, and the economy is difficult to achieve a soft landing, and it is highly likely that an economic crisis will break out.

Only when the crisis breaks out, the economic disease is cleared, and a new technological revolution appears to produce a new cycle, can the world economy possibly move towards a new prosperity.

Therefore, after the dollar cuts interest rates, we need to have this awareness in order to better see the future trend.

Of course, there is no need to be too pessimistic.

Because that is the problem of the United States, not the problem of our country.

The dollar interest rate cut is actually beneficial to us.

Because the dollar interest rate cut opens up a larger space for our country's water release, which will have a positive impact on our country's housing, real economy, and RMB-priced assets.

So, even if the current economic body feels not very good, do not lose confidence, and believe that the future is bright.