Social management theory: the maximum is often beyond the maximum.
Example:
Saturation of globalization effect
Almost all assets, such as stock market, bond market, housing market and futures market, have expanded like water injection meat in the past few years, but there are various signs in the second quarter that this water injection process is coming to an end.
Capital flight from emerging markets
The gradual formation of G3 capital depression has made the emerging markets, which have skyrocketed in recent years due to the flood of funds, feel tight. Emerging markets, led by India, are trying to attract foreign investment. Such stock market volatility suddenly became extremely huge, and the capital flight was extremely obvious. Indian Rupee depreciated by 3.2% in the second quarter, and Indian officials were forced to raise interest rates by one yard to 5.75%.
The United States is the leader of the world economy. It can be said that the change of Americans' understanding of inflation and economic growth is the fundamental reason for the contraction of global liquidity.
Today's inflation has its cost-driven characteristics, and controlling this inflation may cause "stagflation". If it is not controlled, the outcome will be stagflation, and the outcome will be worse and more out of control. It is better to take the initiative to retreat than to clean up the mess passively. This is of course a factor that the United States will consider.
China changes extensive growth.
A few years ago, a major source of hedging against global inflationary pressure was the outflow of a large number of manufactured goods from China, but now China is changing its extensive growth and devoting itself to the actual welfare of its own people, which is likely to increase global inflationary pressure in the future. Because the price base of China products is too low, even if China does not change its growth model, the future inflation factor can no longer be offset by "Made in China", not to mention the future price of China will be increased by "changing its growth model and the value of RMB". In this case, countries such as Europe and America can only prevent inflation through active defense. Even so, inflation in Europe and America may not be contained in the future.
In fact, we can attribute the excess money supply in previous years to "globalization", but when globalization develops to a certain scale, its potential disappears because of the expansion of the base, and its ability to "supernormally accommodate excess liquidity" is disappearing.
America and Europe are no longer capital highlands.
The US interest rate hike has developed into a "tenacious interest rate hike", followed by the European Central Bank. Although the intensity is slightly weaker, it is always slower than inflation, but it is also a kind of austerity. Japan is even more slow, first slowly tightening the currency, and then slowly raising interest rates after a while, showing a more cautious trend. Countless other countries or regions are also raising interest rates.
In the second quarter, the high level of global stock market finally began to turn around, and the signs of turning around in the housing market were more obvious. Commodity futures retreated in a large area, and all kinds of assets around the world felt the impact of tight monetary policy.
The change of interest rate caused the phenomenon of capital highland in the United States and Europe, which gradually became history and gradually turned into depression. Japan is also digging holes, which makes many "circular transactions" return and greatly reduces New Zealand's assets.
America must guard against inflation.
For the United States, it will bring greater pressure to the huge trade deficit. If the Fed tolerates this kind of inflation again, it is equivalent to tolerating the endless expansion of the deficit, eventually losing its monetary leadership and the status of the global central bank, and ultimately damaging the long-term interests of the United States. For the United States, the national interest is above everything else, and it can only be "losing the pawn to protect the car."
It is time for the United States to lead the global recycling of credibility, and it is time to recycle and do it. The United States said well that "it is better to sacrifice growth than to prevent inflation", but in fact, even if inflation is not prevented, there will still be no growth. The United States just made a ready-made statement.