Since May this year, the renminbi and the assets related to Chinese concept stocks have fallen again and again, depreciating again and again, from 6.85 US dollars to 7.27 yuan in one go.
The magnitude and speed of this depreciation are unheard of in recent years, and during the same period, China's A-shares, Hong Kong stock markets also plummeted, making people lose a lot of money, and they couldn't help but ask the following questions:
Depreciated renminbi again and again
1. Whether there is still a rebound in this round of RMB depreciation, and where is the end of the fall!
2. Why did the RMB depreciate so quickly this year?
3. In our country, what the people do is the best response plan.
The opening clearly gives the answer
I will not spare the bend, first answer everyone's questions and then say why.
The first reason why the renminbi depreciated so quickly is that China and the United States broke out in a wrong conflict at the wrong time, and hurting each other and causing third-party profits, which is the main reason.
The second reason is that we have made some poor friends who have no money, generously lent them RMB, and cleverly cleverly avoided RMB control and selling pressure in the market.
The third reason is that the mainland's real estate bubble has finally burst or is about to burst, the domestic capital market cannot undertake such a large currency, and the rich people run fast and use various ways to moisten it, resulting in the remaining shareholders and civilians being smashed so badly.
Sino-US co-governance is the foundation of global stability
China and the United States are one of the world's leading countries, and if the two sides join hands to achieve common prosperity, the European Union, Japan, Russia, Southeast Asia, and South Asia combined will not be enough for the G2 to fight with one hand.
If China and the United States continue the harmonious mutual investment, purchase of more US bonds, and mutual access to science and technology at the beginning of the 21st century, there is no doubt that they will be further greater, and they can fully formulate economic treaties that are beneficial to themselves to harvest other developed and underdeveloped regions.
It is a pity that Trump and others in the United States have fallen into the evil spirit, and they must believe in the so-called Thucydides trap and do their best to consume their own political and economic resources in order to bring down China.
China cannot sit still, backhand the renminbi swap, want to shorten the dollar's status as the world currency, and then pull up a century-old change.
It is a pity that both sides are wrong, the two big ones still have some goods, and no one wins in the fight, but the overflowing wealth has raised the surrounding countries.
The Philippines is grabbing islands in the South China Sea, becoming more and more arrogant, not only not retreating, but advancing, and its voice is getting louder and louder.
Vietnam and India have undertaken China's emigration industry in recent years and made a lot of small fortunes.
And Mexico, which seems inconspicuous, has replaced China as the first trading nation of the United States by undertaking the supply chain of the United States.
Supply chains are fragmented, China has not benefited, and unemployment has risen.
The United States, too, has not solved the problem of disparity between the rich and the poor in their countries, but has further expanded the trend of India and Mexico rushing to grab services and outsource.
In time, in this new supply chain, the new immigrants create a deficit in the United States that is no worse than China's, and it is more difficult to control, is this a good thing?
Housing prices began to skyrocket in Vietnam
Not!
Therefore, it is a top priority for both sides to stop as soon as possible.
The second problem with devaluation is making a bunch of poor friends
Because the United States is not convinced, and also wants to avoid the accumulation of risks on the dollar, China has promoted the realization of RMB swap agreements with third world countries, thinking that it can get rid of the risk of US dollar US debt.
This idea is so wrong!
U.S. debt is increasing, and the dollar is under pressure.
But not afraid of becoming rotten, only afraid of even worse!
With a global reserve rate of more than 40% in the US dollar, compared to what Argentine dollar, Russian ruble, Brazilian lira, Indian rupee, I am afraid that the credibility is dozens of times better.
If the dollar depreciates by 10% against gold, these various yuan dare to depreciate by 90%.
The exchange of RMB with these various currencies is really wronged.
If you lend RMB with your left hand, people will exchange it for US dollars with their right hand, and then buy it back to you when the RMB exchange rate is lowered.
In addition, it is still good to be able to repay the yuan, the most afraid that when the government financial bankruptcy, directly rely on the debt and not pay a lot of debt, these swapped currencies into debts, I don't know which bank, which creditor, which shareholder.
Moreover, the exchange rate cannot be triangular, and since the renminbi wants to stabilize the exchange rate and stabilize the interest rate, it is impossible to enjoy free convertibility.
Since the control of the renminbi is originally for the purpose of not being freely convertible, then why dig such a big hole for yourself through foreign exchange swaps.
This year, the renminbi rose fivefold against the Turkish lira
The fall in the exchange rate is not terrible, I am afraid that there is no way to stop the fall quickly after the fall, and the unwillingness to consume precious foreign exchange based on US dollars will inevitably make speculators think that the central bank is a paper tiger and crazy shorting.
The decline in the RMB exchange rate is equivalent to a sharp decline in the purchasing power of domestic people's deposits, and it is a looting of people's wealth.
Bow to each other, China and the United States rule together
At present, the best strategy to resolve the RMB crisis is to stop doing currency swaps with poor friends and vigorously buy $500 billion of US bonds in exchange for US policy compromises and technological exchange.
The mainland can do business with its head bowed and bitterly haha, and it is really less experienced in finance than Britain and the United States for a hundred years, and it is not as good as others who can make a gesture and stir up great changes in finance.
Although the currency exchange is fragrant, but can not immediately alleviate the current dilemma, a bunch of Argentine dollars in hand has no goods to buy, it is better to buy a large ticket of US bonds, in the future, poor friends to buy things only collect US dollars, sell goods only recognize US dollars, RMB does not need to flow out.
Although everyone talks about dollar garbage, can you find a better global currency in the world?
If not, you better buy Treasuries and bet that the dollar will not collapse in ten years.
The dollar interest rate hike saw more than 5 points, can no longer be added, the United States does not dare to spend trillions of interest every year, so their Treasury Secretary Yellen came to China to compromise.
At this time, it is time to buy U.S. bonds, because once the dollar enters the interest rate cut cycle, the price of U.S. bonds will rebound, and you buy 4 points of five-year national two now, and after entering the interest rate cut cycle, its appreciation can make you eat another 10 points.
The dollar is garbage, the US debt is shameless.
However, the world's excessive currency issuance has gone, relatively speaking, the US dollar and US bonds will have a meeting to pretend to discuss, compared to the tens of trillions of a city investment bond issued without discussion, I think credibility is still OK.
Therefore, the Sino-US compromise, the G2 co-governance arrow, everyone has been-for-tat before, constantly sanctioning, loud, all bluffing, all in order to close a good set of cards,
Now that the chips have almost been collected, is it really necessary to have a big war between China and the United States and sink four hundred warships in the Pacific Ocean?
Impossible, unnecessary!
The respective chips are only for the exchange of each other, in the Ukrainian battlefield, in the Middle East, in South America, our chips are almost collected, the yuan should not fall endlessly, and the global de-dollarization has come to an end.
Therefore, in the second half of the year, it is certainly a matter of course that we will buy US bonds on a large scale.
The renminbi should stop falling, and Chinese concept stocks and Internet stocks will have a new improvement.
How to face it as an individual investor
In this financial war, it is clear that the mainland's financial strength is still far behind that of the United States.
But it doesn't mean that if you buy dollars now, the U.S. debt will be rebated richly.
China's real estate bubble has been extinguished, and the next one is the high share price of Nasdaq.
For example, the price center of Apple, Tesla, and Nvidia will fall rapidly.
I personally think that the Chinese Internet stocks, MSCI CSI 50 shares, are a better opportunity, because they are underestimated!
As long as Sino-US relations warm up, technology is good, and mutual investment and optimism are renewed, the plummeting Chinese concept stocks and dividend ETF50 are all good and will take us back.
Qin Gang meets with Blinken
Taking 10,000 steps back, even if the depreciation of the renminbi is unstoppable, the fundamentals of these large stocks have not changed, and there are still profits, isn't it even more a value-preserving asset under the collapse.
Therefore, optimistic about China, G2 co-governance is the best path in 20 years.
Twenty years later, it's hard to say!