Shi Hanbing: The Fed Is Waiting For China'S Big Bubble.

To promote a stronger economic recovery and help ensure that inflation reaches the target level as time goes by, the board will maintain the federal funds rate unchanged in the 0-0.25% range and continue to anticipate that the federal funds rate will remain at an ultra-low level at least until 2013, under the influence of a low resource utilization rate, a downward trend in inflation trend and a stable pre inflation period. The Commission will maintain the existing policy of reinvesting funds in maturity securities. The committee will review its holdings regularly. Negotiable securities The size and composition are ready to make adjustments at the appropriate time.

The analysis by Goldman Sachs, chief economist of Goldman Sachs, is: Federal Reserve This guidance to the economic outlook is a "mild surprise". We believe that if the economy continues to deteriorate, the Federal Reserve is ready to implement QE3. Goldman Sachs pointed out that although the committee had 3 dissidents, the most vocal opposition since 1992, the Fed still adopted a more lenient monetary policy than expected. First, the Fed will clearly maintain the 0-0.25% low interest policy until mid 2013; secondly, the Fed said it had discussed the possible monetary instruments to stimulate economic recovery, which Goldman Sachs thought was leaving room for QE3.

IHS Global Insight, chief economist, said that the time limit for the US Federal Reserve to limit ultra-low interest rates to mid 2013 is to maintain the future short-term debt interest rate at an ultra-low level and reduce the long-term debt interest rate, while QE3 will wait for the opportunity to come out.

The combination of re investment and extended low interest rates is essentially a quantitative easing monetary policy, not just QE3, but a compromise version QE2.5. In fact, for the United States, the role of extending the ultra-low interest rate to the middle of 2013, and the docking of QE2.5 with the US state and municipal debt, coupled with the recovery of the US real economy, made the necessity of QE3 launched less than before, unless there was a new serious crisis.

Then, how large is the QE2.5 scale? According to the current federal reserve assets Liabilities According to the table, the total amount of treasury bonds, federal agency debt and mortgage backed bonds held by the Federal Reserve is more than 2 trillion and 600 billion US dollars. Besides, it also holds assets such as ABS (asset backed securities) and MBS (mortgage-backed securities) and so on. The estimated assets and interest rates of these assets are estimated to be about 45 billion dollars per month.

This scale is not small.

It is inevitable for the Federal Reserve to make this choice, because it must achieve "Trinity" docking with the US debt. In my analysis of "avenue to Jane Fifteen: finding the source, step by step in-depth analysis":

The United States should accomplish the three levels of debt crisis satisfactorily and achieve the "Trinity". At the same time, QE2.5 should be launched at the same time. It should be connected with the local debts such as state governments and municipal governments that are most needed at present. If the other conditions are met simultaneously, QE3 must be launched. These two results, no matter which form, is introduced when the conditions are satisfied, and any result is achieved with the United States. debt Horizontal and all directional docking

What is America waiting for?

In the latest August 9th Bowen debt crisis, bubble and fate war, my view is: "now, the United States is waiting for a time node to wait for the froth of China. This is a complete logical chain. The United States needs China's bubble, and it is a big bubble. Only by means of this bubble can the wealth grow faster, and only with the help of this bubble can the whole body retire. This game will undoubtedly change China's national destiny. So, can China refuse bubbles, or be vigilant and no longer exceed the currency, but take the rich people's route and take the people's livelihood as the core, so that the economy will step into a healthy development track and disrupt the deployment of the United States? If not, what does this bubble mean for investors? What does it mean for China's future? It is self-evident. I just want to remind you that when investors smile in the future, they should always pay close attention to the fate of the country. "

The Wall Street forced the palace, or the Wall Street and the Federal Reserve's double play were successful. Put on stage After that, the Federal Reserve's quantitative easing monetary policy has been further extended.

Under such circumstances, what should China do? I think it is the only choice to prevent the further accumulation of the bubble and the foundation of China's economy. At least, I can't see a better choice than my ability.

The question is whether China can make plans and implement them in accordance with the plan.

On the evening of August 9th, Chinese media reported: in August 9th, Premier Wen Jiabao chaired a State Council executive meeting to analyze the current international financial situation and its impact, and to formulate countermeasures. The meeting pointed out that the current international financial market has seen rapid turmoil, and the uncertainty and instability of the world economic recovery has increased. We should observe calmly, calm down and prepare for risk prevention. We will continue to take comprehensive measures to safeguard China's economic and financial security.

China should be on the alert that once the Chinese bubble is synchronized with the beat of Wall Street, the consequences will be unthinkable.

I expressed this concern in "avenue to Jane fourteen: from the decisive factor to the logical chain": "the ruthless hand of Wall Street, which has lost patience, has made the two man-made landscape of the global economy reappear (the first time in September 2008) and has become more eye-catching. Can China's short-term thinking led policies see through the big chess game behind man-made landscapes and come up with better coping strategies?"

China should be careful to be led by the artificial landscape of Wall Street.

But what is more sad is that if there is no accident, the analysis of "road to Jane twelve: walking in front of the policy" and "road to Jane thirteen: nodes in advance and postpone" will become a reality. Once again, Wall Street will be ready, and the Chinese bubble will blow again.