When we accurately predicted that the Federal Reserve would cut interest rates by 50 basis points, I thought, our analysis of the impact of future Federal Reserve rate cuts on the global economy has gained a certain degree of accuracy and credibility.

The initiation of this rate-cutting cycle objectively occurs in a historical phase that the global economy has never experienced before, and the situations and situations faced by all economies in the world are not completely explainable by past experience.

In this century's transformation, how much impact does this rate-cutting cycle have, how should we understand and face it, and there is a necessity to discuss with all comrades.

So today, let's talk a little about our views and analysis on this.

This issue of the video is relatively hard-core, the rhythm is fast, but the content is also more dry goods, it is recommended that everyone collect and watch repeatedly and verify.

First of all, let's summarize the conclusion.

This rate-cutting cycle, it is difficult for the United States itself to say whether it can avoid the old things of 2001 and 2008, and ultimately cause a fire to burn itself, triggering its own financial crisis.

Advertisement

Due to this trend, capital, which was originally sensitive to the global market and the core market of the United States, will evolve into a "re-flow" of capital.

That is to say, the situation that was originally in for a while and then flowed out, and did not stay in the core market of the United States, is likely to become more staying outside in the future, such as staying in the East, and then occasionally entering the core market of the United States to make trouble.

The surging capital, on the one hand, will bring a certain vitality to the global economy, some economic sectors will feel relieved, especially in the financial field, but at the same time, it will also intensify the polarization between the rich and the poor and intensify social contradictions on a global scale; on the other hand, it will force each economy to face greater pressure from economic bubbles.

In fact, the latter will also be used by hegemony to transfer its own crisis.

On a global scale, only China has the opportunity to reduce the accumulation of bubbles on the one hand through dredging methods, on the other hand, to let capital settle on the real industry through macro-control methods, and on the other hand, to complete the output of production capacity and the construction of a new diversified economic pattern through global layout.

So the hegemony that has already stepped into the Thucydides trap, when it sees that other economies actually affect its own hegemonic pattern, its suppression and struggle will inevitably be more crazy, and if it causes a fire to burn itself and triggers its own financial crisis, then a deeper global turmoil will be expected because the hegemony does everything it can to maintain itself.

So we have to pay more attention to various things other than the economic side, especially our country's three seas and one side are the key.

In the past "interest rate increase - interest rate cut" cycle of the United States, we can see some common laws, although these laws may not be applicable now, but they are still very valuable for reference.

First of all, the "interest rate increase - interest rate cut" of the Federal Reserve, on the one hand, forms a dollar tide and harvests the world, on the other hand, it is actually the most fundamental reason for it to harvest the world, that is, the United States can no longer resist the decline through its own national strength, so it needs to suck blood from the world to continue its life.

But even so, it cannot completely offset its decline.

Therefore, we can all see that from the oil crisis in the 1970s to the Volcker moment in the 1980s, to the beginning of the millennium, and then the famous 2008 tsunami, and now the global epidemic that started in 2019, every time the Federal Reserve has raised interest rates significantly, the interest rate cut is actually accompanied by the decline of the United States.

For this reason, Yuyuantan Tian made a chart, we borrow it, which very intuitively explains the problem.

This time, the United States' interest rate cut is also impossible to jump out of it, because the situation faced by the United States is more severe now, not only the manufacturing industry of the United States cannot be compared with decades ago, but also because the dollar tide has become ineffective due to our construction of a community with a shared future for mankind.

This is also what we have been saying before, no matter how good the data of the United States is, it cannot get rid of the reason for falling into the risk of decline.

Secondly, looking at the United States' past so many "interest rate increase - interest rate cut" cycles, we can see a very obvious feature, that is, either harm others or harm oneself and then harm others.

For example, from 1980 to 1982, the famous Volcker moment, when the United States raised interest rates to 20% in 1980, and cut interest rates in 1982, the Latin American debt crisis broke out.

In 1988, the United States raised interest rates to 9.75% again, and cut interest rates the next year, in conjunction with the content of the Plaza Agreement, Japan entered the lost decades in 1990.

In 1994, the United States raised interest rates to 6%, and from the middle of 1995 to 1996 was the interest rate cut cycle, the following year, the famous 1997 Asian financial storm knocked out South Korea's independence and turned Southeast Asia into a pure leek field, and also cultivated the Philippines that is now crazy in the South China Sea.

In 1999, interest rates were raised to 6.5%, and the IT bubble burst in 2000, and in January 2001, the interest rate cut, the entire interest rate cut cycle became a process of the United States' IT bubble bursting and the industry moving out.

By 2004, the United States had raised interest rates to 5.5%, and in 2007, it started to cut interest rates, flooding the market, and our stock market also soared to 6124 points, and then fell all the way to 1664 points, and the same year, the 08 financial crisis that has had an impact on the world so far broke out in the United States.

Next, it's time for this "interest rate increase - interest rate cut" cycle.

From a relatively rough time period, we can find that before and after the end of the US-Soviet Cold War, the United States' ability to transfer its own crisis is extremely strong, basically all crises can be pushed away from the mainland and transferred to its own economic colonies or so-called allies.

However, after the millennium, this ability to transfer crises has become weaker and weaker with the United States becoming a unipolar hegemony and the objectively increased global governance costs, so that the IT bubble and the 08 financial crisis both started in the United States before spreading to the world to achieve global crisis transfer.

So now, the institutional costs of the United States as a unipolar hegemony have become so high that even those who worship and believe in the United States as a god can only avoid talking about it, but cannot whitewash it anymore.

Its ability to transfer crises will be squeezed into what kind of situation, I'm afraid this round of interest rate hikes only let countries like Sri Lanka explode, and other economies are just uncomfortable, but they have not been able to achieve the harvest for the United States, which should clearly reflect this problem.

Let alone in the current global pattern, the new pluralistic pattern represented by BRICS countries is emerging as a new choice, and many countries have already had choices other than the old hegemonic system, which will inevitably make the United States' hegemonic global governance more powerless, and the ability to transfer crises will be further squeezed.

All this also points to an ending, that is, this crisis is likely to be unable to be pushed away from the mainland of the United States like in the 1980s and 1990s, and it is impossible to make the United States profitable by transferring the crisis like the two serious crises at the beginning of this century.

It will only break out on the mainland of the United States, and the scale and destructive power will exceed the global crisis of 08.

If the United States as a hegemony does not use more extreme methods to transfer the crisis, it is likely to bring consequences that the United States cannot bear.

At the same time, as a collection of financial capital hegemony, the inherent requirements of financial capital hegemony will inevitably push it towards fascism, and I think the various actions of Israel this year have already given me the best explanation.

So at this time, what way will the hegemony use to transfer the crisis, I'm afraid it is impossible to achieve the purpose of transferring on the economic and financial level, and geography has become its only choice.

If it were in the past, this geographical pressure would be very huge for us, and it would be impossible to deal with without the extraordinary talent of a teacher.

But history is rolling forward, and it has come to the present.

The United States, as an imperialist hegemony, has been deeply involved in the quagmire of Russia and the Middle East, which has effectively relieved us of huge pressure, and our own industrial capacity and production capacity are enough to make us relatively calm in dealing with these geographical challenges.

Of course, it's relative.

But also from this, we should see that some events that seem isolated but can actually find all kinds of grass snake gray line underlying reasons are happening.

Take Japan as an example, its non-interest rate hike, but willing to let China obtain the right to independently test its nuclear wastewater in exchange for the opportunity to discuss opening up import restrictions on seafood in the future, while the Chinese Internet has also started to ferment public opinion on a large scale based on the incident of a Japanese primary school student being stabbed in Shenzhen, and so on, in conjunction with the 1.6 billion US dollars of funds to smear China just announced by the United States, it is still possible to see that Japan is hesitant and hesitant to find a different position in the current game from the past, and hopes to find a position closer to the east.

This is likely to be a very important variable to pay attention to in the future geographical game.

At the same time, in the recent explosion of Lebanon's pager and walkie-talkie explosion incident, this once claimed in 2011 as "using a walkie-talkie to hold the heart of the FBI" Jin Apollo company, it seems to reflect some things under the water surface.

In the future, especially in the United States' interest rate cut cycle, the closer to the end of the interest rate cut cycle, the more we need to pay attention to these information.

In the economic aspect, due to this round of the United States' "interest rate increase - interest rate cut" cycle, a large amount of currency has been issued, making the base money of the Federal Reserve from 4.2 trillion before March 2020 to 9 trillion, and M1 also went from 4.2 trillion at that time to 20 trillion.Here is the translation of the provided text into English: These massive amounts of currency could previously be tied up in the U.S. market with high interest rates, but now that interest rates are being lowered, it's likely that a torrent of capital will surge out.

It's no wonder many people are once again pinning their hopes on these hot funds to bring a much-needed downpour to the long-parched real estate sector, turning it into a lucrative investment once again.

All I can say is that life is already good enough; let's not expect too much.

If it's really not working out, you might as well take a nap; dreams have everything.

Objectively speaking, after the interest rate cut, capital from various sources has become outflowing due to the change in the yield of the U.S. core market, and it seems irreversible now.

This means that indeed, economies around the world will bear a significant amount of hot money.

This is a double-edged sword; if utilized well, much can be accomplished.

However, if mishandled, the scars left behind may require a great cost to heal.

This indirectly demands that economies, especially China, must have a strong ability to deal with bubbles or call it a very sophisticated method of deflating bubbles.

At the same time, they must have very strong macroeconomic control capabilities to settle this liquidity into specific industries, guiding and managing well, and using this capital to serve the real economy, rather than relying solely on attracting capital and allowing it to take and give at will, leading to a situation of short-term high returns but long-term high costs.

This may be the second biggest challenge we face in the future, aside from geopolitical issues.

As for us ordinary people, objectively speaking, when hot money floods in, as long as we don't consider the future costs, just like in '08 and '15 when we didn't consider the difficult times everyone was facing, then it's actually a good thing.

At least many industries can breathe a little easier, and life will be a bit better.

Also, because hot money needs to land, it will create many opportunities that ordinary people can participate in, especially at the consumer level, which will improve.

However, if we look at the long term, what kind of costs and prices this situation will require, it comes back to the question mentioned earlier, how we will deal with this interest rate cut.

There's not much we can say about this, after all, even the platform has repeatedly reminded us out of goodwill to protect us to be cautious with our words, so I can only say that the real challenge is not external.