In the past few days, we are reflecting on why the US dollar suddenly cut interest rates ahead of schedule in September? Behind the seemingly illogical operation, what are the hidden things that we haven't noticed?
Most of our attention has been focused on the United States, is there a recession in the United States? Has the internal struggle yielded results? However, will United States only stare at home? Of course not! So where will they focus their attention? Asia, of course!
So let's see, what's happened in the Asian financial markets lately?
The two most important countries in Asia are China and Japan. There is no need to talk about the torture of Japan's financial market this year.
What about us? The stock market has fallen in a mess, and a series of new policy measures have been introduced this year with little effect, and the Shanghai Composite Index has recently fallen below 2,800 points.
Other major Asian countries are also doing badly.
Singapore, Asia's financial center, has always been a model for the whole of Asia, and many people believe that Singapore's governance environment and financial market are far more perfect than other Asian countries.
But Singapore's stock market has also suffered.
Singapore's stock market is not weak, on September 13, Singapore's Straits Times Index rose to 3572.84 points, a new high since June 2018, and the cumulative increase for the year reached 10%.
So, what's wrong with Singapore's stock market?
In fact, the Singapore stock market is facing unprecedented challenges due to sluggish trading volumes, a decrease in the number of IPOs and a series of delisting events.
According to research by PwC, the exchange was at the lowest level in the world in terms of the number of IPOs and the amount of funds raised last year. In the first half of this year, the number of IPOs on the Singapore Exchange was only one.
On September 16, local time, Singapore announced a bailout, and its second minister of finance, Xu Fangda, announced that Singapore was ready to carry out bold reforms to the regulatory structure to revive the sluggish stock market.
The Korea stock market is also not good, and the Korea Composite Index has entered a three-year decline since hitting a high of 3316 in June 2021, and has now fallen to around 2600 points.
Korea has been bailing out the market since last year, and has even introduced strict regulations such as banning short trading.
Recently, Viet Nam also came to the rescue.
Since the beginning of this year, Viet Nam's stock market has been tepid, and even witnessed a strong selling wave from foreign investors.
Since the beginning of the year, foreign investors have sold a net of 62.4 trillion Viet Nam (about US$2.53 billion), exceeding the total net selling amount for the whole of 2021.
In order to boost the stock market and attract foreign capital inflows, the Ministry of Finance of Viet Nam officially issued a notice on the evening of September 18 local time, revising and supplementing some regulations related to stock trading system transactions, and the new regulations will take effect on November 2.
Singapore Korea Viet Nam bailed out one after another, and it is clear that Asian financial markets as a whole are in a downturn.
The US interest rate hike in the past two years has pushed Asian financial markets to the bottom, especially in the first half of this year, a wave of violent operations by United States has led to a wave of large-scale depreciation of major Asian currencies, further pulling down Asian asset prices.
This is a good opportunity for the dollar to buy the bottom! Perhaps the US dollar is cutting interest rates at this time, and it is eyeing the whole of Asia, which is the world's biggest fat!
Let's go back and see, is the problem serious in United States? It may seem serious, but these are not the most important things.
The dollar cut interest rates, and Harris welcomed the Fed's action as news to celebrate for United States, who are suffering from high prices.
Trump said the Fed's move to cut interest rates by 50 basis points shows that if they are not just playing politics, it is that the economy is in very bad shape to cut so much.
This is very close to our judgment that the dollar should not have cut interest rates, and now it is suddenly cut early, either because the United States economy is in very bad shape, or the result of the internal struggle in the United States.
Until there is no clear conclusion on these things, a rate cut is a risky move. As a result, the dollar suddenly cut interest rates, only to find out that we have all fallen for the Fed!
As a global financial hegemon, United States are born to focus on the world, of course, not limited to United States, even whether the United States economy is in recession, whether the internal struggle wins or loses, these are not the most important considerations.
The global capital market is the most important battlefield for United States financial predators! And it is they who control the dominance of the dollar's interest rate cuts.
If the United States can take advantage of this dollar tide to snatch back more wealth from the world, United States' domestic problems will naturally be cleaned up.
In fact, this question has always been the most important target for the US dollar to raise interest rates, and it was ignored by many at the last moment!
So, what is the most important place for United States? Asia, of course!
However, in the last month or so, Asian currencies and financial markets have shown signs of rebound, such as the appreciation of the yuan and the yen. If it drags on any longer, when the Asian financial market recovers, there will be no good chance to buy the bottom.
Therefore, in September, the dollar cut interest rates, and the United States are likely to take the whole of Asia. At this critical moment, it is in the common interest of the United States to unanimously communicate with the outside world, so they have temporarily compromised internally.
This may be a more plausible explanation for the US dollar's interest rate cut in September.
Next, the United States are coming, and we need to be vigilant and beware of a looting.