The current understanding of the cause of the U.S. financial crisis has gradually become unified. It is a bubble caused by capital's pursuit of profits. The core is that financial institutions lend money to invest in real estate buyers with low incomes. The real estate market declines and the house buyers are unable to repay their debts, leading to a financial crisis. In essence, it is similar to the tulips in the Netherlands and the orchid fever that once occurred in China. Investment is an activity with no actual benefits, and it is through risky borrowing. The scale is huge, and the collapse of the financial market is inevitable. But its impact on the real economy is indirect. For home buyers, it has little impact on itself. They could not afford to buy a house before, but now the house has been repossessed and returned to its original state. It is the speculators who suffer. Different from the economic crises that have occurred many times in capitalist societies in history, it will have a small impact on daily life in the United States, will not lead to large-scale unemployment, and will not lead to the collapse of a large number of American companies. The idea that the dollar is collapsing is wrong. The real economy of the United States has not been greatly affected. The U.S. dollar has already been issued in excess, far exceeding actual needs. What if we issue another 10 trillion U.S. dollars? The U.S. dollar is not a universal currency and can only be circulated in the United States, so what? The U.S. economy will collapse and the U.S. dollar will become useless paper? As long as the United States can ensure that there are no problems in the production of its basic needs, it will not cause a collapse of the dollar. Food production in the United States is basically not affected by the financial crisis. The fundamental reason is that people's basic needs are limited and will not increase with the increase in currency issuance, while other needs are elastic and adjustable.

The United States has two ways to deal with it. One is to help low-income home buyers to increase their income so that they can pay their mortgages on time. This method can fundamentally eliminate the crisis and the overall expenditure is limited, which is the best method. But there are many involved, and the Bush administration does not seem to have this idea. The other is to print a large amount of money to help financial institutions and enable these financial institutions to survive, but it blocks the opportunity for capitalists who fled before the subprime crisis to take advantage of the subprime crisis to acquire and annex the assets of financial institutions in the United States. These funds are bound to find places for speculation. For China, these funds are very dangerous hot money. The author believes that the latter option is the idea of ??American capitalists, which can cause complexity and change in international finance and benefit from the chaos. The United States itself, as a whole, will not suffer much loss. It can control the entire situation well. Others, especially China, are likely to make mistakes and lose a lot of their wealth. Even if the response is correct, the increase in the amount of U.S. dollar currency discovered is likely to cause U.S. dollar prices to rise, which will lead to the depreciation of my country's foreign exchange reserves. Due to the impact of the financial crisis, non-essential consumption in the United States has declined, which has brought about a decline in my country's real economy. Many foreign trade companies have closed down and unemployment has increased. The reason why no major social problems have arisen is because the main workers in these companies are migrant workers, and migrant workers are There is still a piece of land in the countryside that we can rely on and survive.

China’s response principles:

Both Western classical economists and Marx believe that wealth is created by labor. Understand and realize this, and you will know how to respond to the current financial crisis in the United States. Various financial innovations do not directly create wealth. Historically, various financial activities, including the stock market, foreign exchange market, property market investment and financing, futures, etc., are all disguised gambling venues, and their negative effects far outweigh their positive effects on the economy. Its function for economic development can be replaced by other means. Generally speaking, the main function of these financial means is to defraud ordinary people's wealth in large amounts. It is only right to cancel all the above-mentioned various financial means in China. Recently, China has introduced new financial markets that allow wealth to flow faster. With the relaxation of financial controls in our country, these gambling venues have provided not only Chinese capitalists, but even more terrifying, foreign capital predators with casinos that absorb the wealth of the Chinese people. . China's foreign exchange should never enter various foreign financial casinos. The owner of any casino has endless means to defraud the wealth that enters the casino. It is unrealistic to defraud the owner of the wealth from the casino. The end result is that his own wealth is defrauded. Therefore, we should not participate in the rescue of European and American financial institutions. All kinds of bottom-dumping ideas are very dangerous.

my country’s current countermeasures:

China needs to be clear about the amount of foreign exchange it actually controls at its discretion, needs to understand the rules of international currency flows under conditions of financial crisis, and needs to prevent foreign exchange flows from affecting normal economic activities. You cannot invest all foreign exchange. You must keep a sufficient amount of foreign exchange at your disposal to cope with the more elusive foreign exchange flows in the era of financial crisis. The country should fundamentally change its approach to supporting foreign investment and foreign trade (see attachment). Economic development must be based on domestic production and consumption. We cannot establish a foreign-funded enterprise that only uses Chinese labor and disappears without a trace at the first sign of trouble. It will not help our country's economic development and will only cause China's economic disaster.

Foreign-funded enterprises in China have actually become a place where China’s wealth is lost. During this financial crisis, some foreign-funded enterprises need funds to rescue their local enterprises. The state should take the opportunity to acquire them and reduce the number of foreign-invested enterprises. The most important thing is to acquire foreign shares in financial institutions such as banks and insurance companies in my country.

Banks are the management institutions of national wealth. Foreign investment in banks means that part of the growth of national wealth belongs to foreign capital, and they do not make any contribution to the growth of national wealth. I strongly agree with the proposal by economists such as Zhong Dajun that foreign exchange such as U.S. Treasury bonds purchased by China and investments from financial institutions should be used to repurchase U.S. foreign-invested enterprises in China.

This financial crisis provides a good opportunity. Through the financial crisis, we can change the export-oriented economy at a low cost and vigorously develop an economy dominated by domestic demand. Specifically, the income of ordinary workers, including migrant workers, should be significantly increased to increase the product market for domestic demand and at the same time enable enterprises to shift to the production of domestic products. Appropriately tighten the funds of foreign trade enterprises and compress the living space of foreign trade enterprises, thereby reducing the production capacity and export capacity of foreign trade products, reducing foreign trade surplus, gradually reducing foreign exchange surplus, and reducing foreign exchange reserves.

Now is not a good time to buy physical assets such as gold and resources. We have seen a sharp increase in the dollar prices of various resources. This is largely a conspiracy. When we buy resources now, the actual result is a loss of wealth. If gold itself is not used as a raw material for production, it will actually have little value like the US dollar. Its price is actually controlled by capital predators and fluctuates greatly. Gold prices now reach thousands of dollars per ounce, well above historical normal levels. If you exchange foreign currency for gold now, the possibility of wealth loss is very high. Oil prices have also been driven to record highs, and it is said that our country bought a lot of oil when prices were high. Oil prices are likely to return to normal levels of $20-30 a barrel.

The current appreciation of the RMB is a disaster. There is now a large amount of foreign hot money in the country, which has been converted into RMB through various channels and entered the domestic stock market and real estate market. Now the domestic stock market and real estate market is hovering, and a financial crisis occurs abroad. This hot money urgently needs to be withdrawn to rescue its home base. They hope that China's exchange rate will rise significantly so that they can make a fortune when they leave China and exchange for foreign currency. RMB appreciation will also reduce product competitiveness, further reduce exports, increase business closures and increase unemployment, thereby reducing domestic consumption and leading to an economic crisis. The state should legislate to significantly increase the income of ordinary people, thereby causing prices to rise and creating an environment for devaluation of the RMB. At the same time, it should suppress the stock and property markets, thereby cracking down on foreign hot money.

We should build our own economic system. The economic system established by Western countries is fundamentally a system that safeguards Western interests. Historically, Western countries have plundered the wealth of many countries through various so-called market means within this system. The Southeast Asian financial crisis, the Russian financial crisis, the South American financial crisis, etc. These historical facts all illustrate the deceptive nature of the Western economic system. We have a good reputation in the third world. We have huge domestic production capacity, and our imported raw materials mainly come from the third world. These have laid a good foundation for us to build our own economic system. The only thing we need to do is increase our spending power. We must increase the income of ordinary workers to increase our consumer market. Otherwise, we will not be able to provide a market for products from other third world countries, and we will not be able to allow people in third world countries to use RMB and promote the economic development of third world countries. Without increasing the capacity of the domestic market, our excess products cannot be digested by ourselves. Exporting to developed countries to increase foreign exchange reserves is essentially suicidal. If our own development becomes a problem, how can we provide markets and opportunities for the development of the third world? If we turn to the Third World and establish an independent economic system dominated by China, our strength will have a solid foundation, and the decline of Western developed countries will become inevitable. Western countries do not have the power to prevent this historical necessity. If we continue to stay in the economic system headed by the United States, one day we will become an economic colony completely controlled by the United States. In fact, now we are getting deeper into it (such as the introduction of new financial markets).

Summary:

The main problem in our country's economic development is that those in power in the country do not realize their own economic strength. The domestic production capacity is very large, but it controls the income of the people, leaving their own people with no money to consume the products they produce, and gives it to the Americans in exchange for dollar bills of little value. If the Americans don't want it, their own production lines must stop production, and the economy This is a ridiculous economic policy in the face of stagnation or even collapse. Those in power must realize that building affordable housing, realizing real estate consumption, increasing the income of ordinary workers, thereby increasing production capacity while increasing consumption capacity, and maintaining a balance between production and consumption are the only correct ways for my country's economic development. Otherwise, China's economy will inevitably develop slowly or even experience a crisis. This is the fundamental reason why capitalist society has emerged from hundreds of years of economic crisis. This is the successful experience adopted by those in power in capitalist countries after realizing this.

Regarding the ongoing US financial crisis, if you realize that Western financial activities are a kind of gambling, you can understand its elusive operation process and you can formulate the correct countermeasures. Those readers who are skeptical of conspiracy theories will understand that conspiracies are everywhere in economic activities if they think about the behavior of businessmen in business wars. The U.S. government is actually controlled by American financial capitalists, and their behavior is not much different from that of businessmen.

Our patriotic economists should reflect on Western economic theories, not be fooled by Western deceptive theories, and consider the laws of economic development from a physical perspective, rather than from a virtual or monetary theory. We call on our patriotic economists to fundamentally propose countermeasures, including canceling the stock market, foreign exchange market, futures market, etc. (See the attachment to demonstrate that the funds required for national development are additionally issued by banks. The stock market reduces the funds that ordinary people use for consumption, hindering Economic development), legislate to prohibit stock market and property market bubbles, and put an end to the crises caused by those deceptive lies, instead of calling for stock market bailouts again and again. Each bailout means that some ordinary people's wealth has been defrauded by capitalists, and the national economy Development has added an element of danger.