It is still important to have the ability to independently analyze information.
After watching yesterday's meeting, the fluctuating US dollar index and various financial products, and then seeing all sorts of experts in the comments, some laughing while others crying, as an old participant in the financial market for over twenty years who has experienced two wealth distribution cycles, satisfaction with wealth is the key to investment, purely driven by personal interest. Some words are just talking to oneself, simply chatting, whether it aligns with everyone's taste is beyond my consideration.
First of all, the American financial industry is not monolithic, and Wall Street does not have one voice. Major investment banks have their own purposes, and this market is a fierce competition. The interests faced by the FED are not so simple, not to mention what technical school lines to follow. Speak with those cunning foxes. They are all plotting. The current internal conflict on Wall Street is between the new financial tycoons, the new 'stock gods' (opinion leaders), and the old financial tycoons, the old 'stock gods' (such as Buffett and even Soros). The new financial tycoons (represented by Musk) and new stock gods (like Wood Sister) want the US stocks to rise, while the old financial tycoons (like Rockefeller and Morgan) and old stock gods (such as Buffett and even Soros) want US dollar hegemony, constantly talking about US dollar hegemony. Ultimately, the Fed's ultimate task is to ensure that the US dollar is a currency, money, a tool for measuring wealth, and a tool for controlling the flow of wealth. To quote the emperor pud, if the US dollar doesn't exist, what's the point of keeping US stocks. The new forces' authority is based on stock market valuations, without going through many bull/bear cycles. Traders represented by Wood Sister essentially operate with other people's money. These forces cannot and cannot afford a stock market decline because if it happens, their authority disappears. The authority of power lies not only in having money but also in whether your money can withstand the cycles of operation. This money is called wealth. The recent excessive issuance of currency due to the epidemic is well understood, and the stock market taking off from 9000 points. Old forces that have experienced multiple wealth cycles have been comfortably selling chips for over a year at levels above 14000, seeking levels below, even below 7000, or even lower with bloody chips (focused on the Nasdaq index). This is the most subjective contradiction that the Fed's interest rate strategy must face in the US (of course, there are many other contradictions, let's stop here). As for the international contradictions the Fed must face, let's not discuss that too much, to avoid the post being deleted before it's posted.
Secondly, is it really important how much the interest rate is raised?! To be honest, whether the interest rate stops at 4.5%, 5%, or even 6%, the actual impact on the financial market is not that great. For the pricing of financial products, it is more damaging for the interest rate to be raised to 6% and held for 3 months than for the interest rate to stay at 4.5% for a year. Taking the example of gold, when the US dollar index was 100, gold stayed at around 1000 for two years. Why, when the US dollar index increased to 110+, did gold remain strong at 1600-1700? Referring to UBS's gold investment pricing model, even considering the impact of excessive currency issuance, gold's current price should be around 1300. So why has gold held above 1600 for so long, and why have precious metals, commodities, and US stocks not shown a unilateral decline like US bonds due to interest rate hikes? How many stocks in the stock market can provide dividends higher than the interest income from bank deposits annually? Not to mention gold, which does not provide interest returns. Even if you hold physical gold for 100 years, it will not increase. Because the Fed's interest rate is lower than the CPI, the market is still in a dream of 'negative interest rates.' Even if the Fed raises the interest rate to 4%, when your CPI is still above 8%, the market perceives this return rate as negative. To overcome inflation, to invest, this is why these commodities are still supported. Regardless of the various news, whether bearish or bullish, they continue to rise. Last month, December, the lack of interest rate hikes was enough to drive an increase. What else are they afraid to say? Holding cash in an inflationary environment will not harm you; it's your anti-inflation operations that will reduce your wealth. So don't worry about how much the interest rate is raised, how gradual the rate hikes are. The key is when the Fed will cut interest rates, how long high rates will continue, and the future key factor for price declines will be CPI's decrease.
Macro cycles typically last for several years. How will the script play out in the coming months or even a year? Generally, after a sharp drop, after killing off idle funds in society and foreign funds related to the US, it will pause on interest rate hikes for a while, rise, trap more investors, continue to drop, then pause interest rates again, rise, trap again, and then keep rates unchanged, continue to rise and trap and kill again. However, the issue is that due to base period factors last year, the CPI is definitely turning this month and will likely decrease significantly next month. Once the Fed raises rates to around 5% in the first half of next year, if the CPI falls below 5%, when the difference between the two becomes positive, the market's dream of negative interest rates will be over. Then the prices of precious metals, commodities, stocks, and even real estate will have real meaning. So in the coming months, don't be deceived that a CPI decline is positive news (of course, market makers will use this sentiment to drive prices up). If you are not a long-term investor with substantial funds, be cautious, take profits when you see them. Don't be blindly bullish or bearish; I've seen too many investors who've made the right call only to lose everything.
First of all, the American financial industry is not monolithic, and Wall Street does not have one voice. Major investment banks have their own purposes, and this market is a fierce competition. The interests faced by the FED are not so simple, not to mention what technical school lines to follow. Speak with those cunning foxes. They are all plotting. The current internal conflict on Wall Street is between the new financial tycoons, the new 'stock gods' (opinion leaders), and the old financial tycoons, the old 'stock gods' (such as Buffett and even Soros). The new financial tycoons (represented by Musk) and new stock gods (like Wood Sister) want the US stocks to rise, while the old financial tycoons (like Rockefeller and Morgan) and old stock gods (such as Buffett and even Soros) want US dollar hegemony, constantly talking about US dollar hegemony. Ultimately, the Fed's ultimate task is to ensure that the US dollar is a currency, money, a tool for measuring wealth, and a tool for controlling the flow of wealth. To quote the emperor pud, if the US dollar doesn't exist, what's the point of keeping US stocks. The new forces' authority is based on stock market valuations, without going through many bull/bear cycles. Traders represented by Wood Sister essentially operate with other people's money. These forces cannot and cannot afford a stock market decline because if it happens, their authority disappears. The authority of power lies not only in having money but also in whether your money can withstand the cycles of operation. This money is called wealth. The recent excessive issuance of currency due to the epidemic is well understood, and the stock market taking off from 9000 points. Old forces that have experienced multiple wealth cycles have been comfortably selling chips for over a year at levels above 14000, seeking levels below, even below 7000, or even lower with bloody chips (focused on the Nasdaq index). This is the most subjective contradiction that the Fed's interest rate strategy must face in the US (of course, there are many other contradictions, let's stop here). As for the international contradictions the Fed must face, let's not discuss that too much, to avoid the post being deleted before it's posted.
Secondly, is it really important how much the interest rate is raised?! To be honest, whether the interest rate stops at 4.5%, 5%, or even 6%, the actual impact on the financial market is not that great. For the pricing of financial products, it is more damaging for the interest rate to be raised to 6% and held for 3 months than for the interest rate to stay at 4.5% for a year. Taking the example of gold, when the US dollar index was 100, gold stayed at around 1000 for two years. Why, when the US dollar index increased to 110+, did gold remain strong at 1600-1700? Referring to UBS's gold investment pricing model, even considering the impact of excessive currency issuance, gold's current price should be around 1300. So why has gold held above 1600 for so long, and why have precious metals, commodities, and US stocks not shown a unilateral decline like US bonds due to interest rate hikes? How many stocks in the stock market can provide dividends higher than the interest income from bank deposits annually? Not to mention gold, which does not provide interest returns. Even if you hold physical gold for 100 years, it will not increase. Because the Fed's interest rate is lower than the CPI, the market is still in a dream of 'negative interest rates.' Even if the Fed raises the interest rate to 4%, when your CPI is still above 8%, the market perceives this return rate as negative. To overcome inflation, to invest, this is why these commodities are still supported. Regardless of the various news, whether bearish or bullish, they continue to rise. Last month, December, the lack of interest rate hikes was enough to drive an increase. What else are they afraid to say? Holding cash in an inflationary environment will not harm you; it's your anti-inflation operations that will reduce your wealth. So don't worry about how much the interest rate is raised, how gradual the rate hikes are. The key is when the Fed will cut interest rates, how long high rates will continue, and the future key factor for price declines will be CPI's decrease.
Macro cycles typically last for several years. How will the script play out in the coming months or even a year? Generally, after a sharp drop, after killing off idle funds in society and foreign funds related to the US, it will pause on interest rate hikes for a while, rise, trap more investors, continue to drop, then pause interest rates again, rise, trap again, and then keep rates unchanged, continue to rise and trap and kill again. However, the issue is that due to base period factors last year, the CPI is definitely turning this month and will likely decrease significantly next month. Once the Fed raises rates to around 5% in the first half of next year, if the CPI falls below 5%, when the difference between the two becomes positive, the market's dream of negative interest rates will be over. Then the prices of precious metals, commodities, stocks, and even real estate will have real meaning. So in the coming months, don't be deceived that a CPI decline is positive news (of course, market makers will use this sentiment to drive prices up). If you are not a long-term investor with substantial funds, be cautious, take profits when you see them. Don't be blindly bullish or bearish; I've seen too many investors who've made the right call only to lose everything.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
Read more
Comment
Sign in to post a comment
清风徐徐 OP : If you are in doubt, you are welcome to leave a message in the comment area, or you can trust me privately. Here I wish you all the stock market Changhong.
顶风买菜真难啊 : Teacher, please have a dozen tea eggs.
mubbiiee : Think alike, now institutions still have a lot of money, this kind of capital bubble can not be eliminated by a fall in the stock market. There is plenty of hot money for institutions, companies and individuals. If there is no need for hot money, inflation will not stop.