Many readers have asked if there is any statement about the recent $1 trillion in ultra-long-term special government bonds.
Presumably everyone can feel that since the business with the United States was interrupted and foreign exchange reserves no longer grew.
We began to gradually transform, pegging the original currency to foreign exchange reserves to anchoring government bonds.
The special trillion treasury bonds planned to be issued last year and this year are undoubtedly a direct manifestation of the release of water...
Here's an example:
The villagers of a village have a total wealth of 1 million,
Relying on credit, the village chief issued an IOU of 500,000 yuan, which was subscribed by the villagers.
The assets in the hands of the villagers become 500,000 cash assets + 500,000 bond assets.
The village chief got the money and handed it over to Zhang San, Li Siwang and Wu to repair the road, and Zhang Sanli and Wang Wu got 500,000 yuan in cash.
At this time, the social book wealth changed from 1 million to 1.5 million, and the money was circulated;
Why did the village chief do this?
Because the economy is too stretched, M2 and social finance are even negative, everyone is only willing to save, and no one invests in consumption.
So you don't like to spend money, right, okay, the village chief will help you spend money.
Therefore, the village chief took the initiative to increase the debt and took on the role of consumer.
After all, when Zhang San and Li Si have orders, they will hire people, workers will have wages, and when they get wages, they will have consumption
Then you are worried that the village chief has been in debt all the time, and it will not explode...
Just ask, have you ever seen a money printer who will have no money to pay off his debts and go bankrupt?
The reason why there is a saying that domestic debt is not a debt is because debt can be replaced, and as long as it is long enough, the debt will be diluted to nothing.
For example, this ultra-long-term treasury bond is guaranteed for 20 years, most of them are 30 years, and the longest is 50 years
That is, the state borrows this money, and when it is time to pay it back, it is a matter of the next two generations.
You must know that forty years ago, we were still poor and white, and we were 10,000 households.
Then some people may be a little panicked, isn't this a big inflation coming?
In the case of the trillions of national bonds alone, there is no need to cause panic.
After all, it is now the first phase of 40 billion, and with the gradual release of special treasury bonds in one year, a total of trillions will be put in place.
Even if all 1 trillion is in place, direct funds will account for less than 2% of the 66 trillion M1.
You must know that 4 trillion in 08 is really fierce, and M1 was only 15 trillion at that time, accounting for 25%+!
At that time, the Shanghai Composite Index was stimulated, soaring by 102% in just over a year!
But then again, although the amount of money printed by the national bond anchor is not large, it has been planned to exceed one trillion for two consecutive years.
The ZF work report clearly states that ultra-long-term special treasury bonds will be continuously issued in the next few years.
Looking at the frequency of issuance of special treasury bonds in the previous years, 98 years (270 billion), 07 years (1.55 trillion), 17 years (600 billion), and 20 years (1 trillion).
The most recent is the second half of '23 and the first half of '24, both times exceeding one trillion.
It can be said that the issuance of special government bonds is becoming more and more hungry and thirsty
It's understandable, after all, there are a lot of bear children (local zf) who are waiting to be fed, and they are all waiting for food.
The money game is just getting started...
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As for the response, after reading the chart above, you should be able to understand that the release of water is good for equity assets.
The previous few times for A-shares have formed a good support in the short and medium term.
ps: The one in October 2023 was special, and soon after the policy was issued, the Shanghai Stock Exchange fell all the way to more than 2,600 points, but soon the limit reversed, and V came back and regained the new high before the fall...
In addition, it should be noted that although domestic debt can be expanded "unlimitedly", the dollar cannot be printed.
Now from the data on the side of the United States, the growth rate of M2 in recent years is obviously slower than that of my A.
Due to the accelerated expansion of domestic debt and the huge overseas interest rate differential, this is also the reason why I think there will be downward pressure on the exchange rate, which is also likely to be good for the allocation strategy of US dollar assets.
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In terms of operation, there has been no recently, continue to lie down patiently...
1. Tencent's first quarterly report announced that its total revenue was 159.5 billion yuan, an increase of 6% year-on-year; Gross profit increased by 23% year-on-year; The net profit was 50.27 billion yuan, an increase of 54% year-on-year, and the market estimate was about 43 billion, exceeding expectations.
2. Hong Kong Stock Connect dividend ETF has changed its face, +6% in the morning and -3% in the afternoon, in fact, the linked Hong Kong Stock Connect high dividend index has not fluctuated so much, indicating that the mainland has a bit of speculation on Hong Kong stock funds, although this year's "Hong Kong stocks + high dividends" is the most beautiful boy, but be careful that the short-term rise is too large to enter the market and eat a slap.
3. OpenAI released the GPT 4o version, which is more outrageous There are two points, the first is that it is directly released for free this time, but there are certain restrictions on the amount of use; The second is the ability to perceive the world, such as voice conversations in seconds, real-time understanding of videos and images, and the response speed is not at all like the taste of AI.
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