The news that people pay the most attention to these days may be the continued soaring of 10-year treasury bonds in the United States.

Many people are asking whether the rapid rise in 10-year Treasury yields in the United States will lead to the collapse of global financial markets.

In this article, we will talk about the recent concern about the yield on 10-year US Treasuries.

Why the yield on the 10-year Treasury note has risen so fast recently, and when the market will really go wrong.

01 recovery is the root cause

The first thing we want to say is that rising Treasury yields are essentially the result of economic recovery.

This can also be confirmed in recent speeches by some Fed officials.

Williams, president of the New York Fed, once said in a speech:The current rise in Treasury yields is the result of economic recovery.

Some Democrats, including former Treasury Secretary Summers, even expressed concern that the Biden administration's economic stimulus package was too large and that it would lead to economic overheating.

Why do they say that the rise in US bond yields reflects expectations of economic recovery?

To make this clear, we should start with Merrill Lynch clock.

Those of you who are familiar with Merrill Lynch know that after the economy comes out of recession, it first goes through a period of recovery, followed by a period of overheating.

Whether the economy is in recovery now, or it is about to overheat in the future. All this means that bonds are already a relatively poor choice at this stage.

Why bonds in the economic recovery and even overheating period, is a relatively poor allocation choice? Let's talk about the principle and everyone will understand.

We know that the prices of all commodities are determined according to the supply and demand on the market.

If there are more people to buy and fewer people to sell, the natural price will rise, and if there are fewer people to buy and more people to sell, the natural price will fall.

Bonds are also a kind of commodities, and natural pricing is no exception. If there are more buyers, the bond price will go up. When there are more sellers, bond prices will fall.

One thing we need to pay particular attention to here is that bond prices and bond yields are the opposite.

In other words, less money to invest in bonds will lead to lower bond prices and higher bond yields.

More money to invest in bonds will lead to a rise in bond prices and eventually lower bond yields.

This reason is also simple, if you and Lao Wang next door, both buy a bond with a face value of 100 yuan and an annual interest rate of 3%.

The price you buy is 100 yuan. If you hold it at maturity and the bond is paid at face value, your return is 103 yuan.

When Lao Wang bought next door, the price of the bond fell, and 95 yuan bought a bond with a face value of 100 yuan.

After the expiration of the holding, 100 yuan will still be paid to him. This means that in addition to earning 3% interest, he also earns 5 yuan in price difference.

In other words, also buy a bond with a face value of 100 yuan, because the purchase price is different, you and Lao Wang next door, there is a difference in yield of 5 yuan.

With the same maturity, you only earned 3 yuan in interest, while Lao Wang next door earned 3 yuan in interest + 5 yuan in price difference.

So here we can also get the way to calculate the yield on holding treasury bonds:Treasury bond yield = (treasury bond interest rate + (100-treasury bond price) / 100.

For example, if a 100 yuan treasury bond sells for 95 yuan, and the interest rate of the treasury bond is 3%, then the yield of the treasury bond is = (3 + (100-95)) / 1008%.

Do you think it is because bond prices have fallen that even if you buy bonds of the same face value, the final bond yields will be completely different?

By understanding the story of you and Lao Wang next door, you can understand why bond yields and bond prices are opposite.

After understanding that bond prices are opposite to bond yields, we go on to talk about why bonds are sold during the economic recovery.

As we can see from the Merrill Lynch clock, the most popular period for assets such as bonds is the recession.

Why are recession bonds the most popular? Because at this stage, people are more concerned with security rather than profit.

Bonds are obviously much safer during a recession than highly volatile assets such as equities and commodities.

In a recession, bonds are also the safest assets, with a strong risk aversion.

In a recession, everyone wants to avoid risks and keep their money safe. Of course, the first choice to buy is bonds.

Because of the national credit endorsement, the national debt is the asset with the highest credit rating in the bonds.

Because unless the country is bankrupt, it is generally possible to guarantee full payment at face value.

So in a recession, what you will see is that people keep buying all kinds of bonds to avoid risk, leading to rising bond prices.

As we said earlier, bond yields and bond prices are opposite. At this time, as bond prices continue to rise, bond yields are falling.

Because everyone is not optimistic about the economy at this stage, they are selling stocks and commodities and buying bonds to avoid risk.

The relationship between supply and demand determines the price. If there are more sellers and fewer buyers, the price will naturally continue to fall.

So what we can see during the recession is that stocks and commodities are plummeting.

When the economy begins to recover, the profits of listed companies begin to recover. Stocks and commodities have once again become better investment directions.

In the previous recession, people bought bonds as a safe haven, resulting in higher bond prices and lower bond yields.

But by the end of the recession, bond yields have usually become extremely low. In the context of economic recovery, bonds are also becoming more and more expensive compared to the stock market.

Because at this stage, the valuation of the stock market has become extremely low because it plummeted during the recession.

The subsequent economic recovery will lead to a return to profitability in the stock market. At this stage, in terms of valuation, the stock market will become very cost-effective.

Because as long as the economy recovers and the stock market returns to normal valuations, it will be a very substantial gain.

So people with foresight usually choose the transition from the end of the recession to the recovery.

Sell bonds that already have extremely low overall yields and buy stocks that are already very cost-effective after the recession plummeted.

Some people here may not understand that we use the history of valuation fluctuations of large A shares in the past to give you an example to understand.

If we look at the stock market as a whole, the market-wide median valuation is about 3.5, which is also the position of the dotted line in the middle.

So if you encounter an economic recession, people are usually not optimistic about the stock market and will sell their stocks one after another.

Generally speaking, at the end of the recession, the valuation of the whole market will be smashed near the position of 2.

The position of this 2 is usually the end of a bear market in the stock market. This is also the end of the recession cycle, which is the location of the rectangle in our figure above.

If the economy starts to recover later and the market-wide valuation rebounds from 2 to a normal valuation of 3.5, that means there is 75% room to rise.

However, the top and bottom of the market are determined by madmen. Usually, the more people go up, the more people buy, and the more people fall, the more people break the market.

That's why you can see that each time the position at the top of the market, which is marked by the ellipse above, is usually much higher than the normal valuation of 3.5.

This number can even reach 5 to 6, and sometimes even 7.

Speaking of this round of stock and bond cycle conversion, it is the password that you can gain wealth in the capital market once every few years.

If you understand the above story, you should understand why bonds are not a good choice during economic recovery or even overheating.

Because expectations for the economy continue to improve as the economy recovers, coupled with wide differences in bond and equity market valuations.

Eventually, investors continue to turn to riskier assets, stocks and commodities with higher yields.

That's why you see bond prices falling, bond yields rising, bulk and cyclical rising.

02 the essence of stock-debt conversion is because of the ratio of performance to price

As we said earlier, the highest credit rating of all bonds is treasury bonds, because treasury bonds are bonds guaranteed by a country's government credit.

National debt denominated in local currency usually has unlimited solvency and represents a risk-free return.

Therefore, the yield on treasury bonds usually reflects the risk-free rate of return in a country's market.

The size of the risk-free rate of return, to some extent, can reflect the risk of default on the country's debt.

For example, after the Greek debt crisis broke out in December 2009, various rating agencies kept downgrading Greece's sovereign credit rating.

As a result, Greek ten-year bond yields have risen all the way since 2010, reaching a high of nearly 35% in February 2012.

The reason why Greek ten-year bond yields have become so high in the debt crisis is what we said earlier.

The price of any commodity is determined by supply and demand, bond is also a kind of commodity, supply and demand ultimately determine the price.

At that time, everyone was worried that the Greek government bonds could not be repaid, and they sold them one after another, and the bond yields were naturally getting higher and higher.

Of course, a country faces default on its debt, which is usually a special case, and we don't always encounter it.

Treasury yields usually rise or fall, but they are more likely to reflect expectations of the fundamentals of the country's economy.

So the yield of treasury bonds, in a sense, implies the market's expectation of the potential economic growth rate of the country at a certain stage.

When the economy is in recession, people continue to buy treasury bonds to avoid risk, resulting in lower yields.

By the end of the recession, Treasury yields had become extremely low as people kept buying to avoid risk.

Usually, investing in the bond market at this stage, from the perspective of yield, is not as cost-effective as the stock market after the slump in the recession.

That's why we see a shift in money from the bond market to the stock market on the Merrill Lynch clock from recession to recovery.

As the economy recovers, people are constantly selling safe-haven assets such as bonds. At this stage, bond prices continue to fall and bond yields continue to rise.

In essence, treasury bonds as a risk-free return of assets, people only in the short-term or medium-to long-term, think that there is no better investment opportunities, will buy a large number of.

This can only happen during a recession.

At this time, because everyone comes to avoid risk, the price of treasury bonds will continue to rise, and the yield of treasury bonds will continue to fall.

In the context of rapid economic growth, the risk assets of both the real economy and the financial market are full of gold.

At this time, who will go to buy treasury bonds and get a risk-free return? he is out of his mind.

So at this time, everyone is selling treasury bonds, and the yield on treasury bonds will continue to rise at this stage.

We know that 10-year treasury bonds are the most liquid medium-and long-term treasury bonds. Coupled with the time of 10 years, it often includes an economic cycle.

This has also led many people to regard the yield on the 10-year Treasury as a good indicator of the economic trend.

So every time you expect a recession or recovery, the change in the 10-year Treasury bond is usually very obvious.

The most typical case in the past two years was in March 2020, when the COVID-19 epidemic broke out.

At that time, based on the spread model, the probability of a recession in the United States was 27.1%.

Looking back at history, the period when the spread model was expected to reach this level was followed by a recession in the United States.

It is precisely because in March 2020, various models were predicting a recession crisis in the US economy that everyone went to buy treasury bonds as a safe haven.

It can be seen that the yield on ten-year US Treasuries at that time was repeatedly record low.

How low is this low? This water level was never reached in the Great crisis of 1933 or World War II.

Recently, why do you see that the yield on the 10-year Treasury bond in the United States continues to rise?

In essence, investors are selling 10-year Treasuries during the recovery because of optimistic expectations of the economic recovery.

As a result, the price of the 10-year Treasury note is falling, while the yield on the 10-year Treasury note is rising.

Several important officials of the Federal Reserve have also confirmed this point.

These Fed officials tell us that the rise in bond yields is a sign of economic optimism and there is no need to worry about it.

03 why the stock market has a high performance-to-price ratio during the recovery period

Why do we always say that during the economic recovery, the performance-to-price ratio of the bond market will be far lower than that of stocks?

Many people here may not understand. If we compare the market-wide returns of stocks and bonds, we will see.

We talked about the concept of price-to-earnings ratio in "what will prick the global asset price bubble" before.

The so-called price-to-earnings ratio is to calculate a value by dividing the total amount of your investment by the annual return on this investment.

This value is the price-to-earnings ratio, so the price-earnings ratio is calculated as the total investment / annual return on investment.

It can be seen here: the price-to-earnings ratio represents the number of years you need to recoup the investment.

Here we can also see that the reciprocal of the price-to-earnings ratio is actually your annual return on investment.

If you invest 1 million and generate a profit of 50, 000 a year, it will take 20 years to recoup the investment.

So the price-to-earnings ratio of this investment is 20, so the reciprocal of 20 is 100%.

So we can see that the number of 5% is the annualized rate of return on your investment.

If we regard the whole stock market as a whole, then the reciprocal of the price-to-earnings ratio of the whole stock market represents the annualized rate of return of the whole market.

We usually compare the ten-year Treasury yield with the market-wide annualized yield to measure which market has more investment value.

With regard to the yield of 10-year Treasury bonds, we once wrote that 10-year Treasury bonds are the anchor of all asset prices.

What I told you at that time was:

The yield on 10-year Treasury bonds is the standard for pricing all assets on the market, and it is also the most commonly used observation indicator.

According to the capital pricing model, the risk-free rate of return can be regarded as the anchor of the pricing of all assets in a country, as well as the anchor of social financing costs.

This implies the expected rate of return on long-term investment. At present, almost all asset prices on the market are priced with reference to the yield of 10-year treasury bonds.

In other words, people use the yield on the 10-year Treasury bond as a benchmark to measure the value of various assets on the market, whether it is cheap or expensive.

Why investors around the world like to keep an eye on US ten-year Treasury yields. As soon as there is any change in the yield on US ten bonds, global asset prices will fluctuate sharply.

The reason is simple: since the internationalization of the dollar, the Federal Reserve has been the de facto global central bank.

When the Fed released a lot of water, the dollar index fell. The dollar flows around the world at the same time, pushing up asset prices around the world.

As the Fed recovers money, the dollar index rises. The dollar flowed back from around the world and asset bubbles burst everywhere.

We have talked about this before in "how the dollar dominates and reaps the world".

The Federal Reserve has become the world's central bank, but not the yield on US 10-year Treasuries has become the benchmark for global asset prices.

So the Fed's 10-year Treasury yield is, in fact, a global risk-free yield.

Every time global investors lack confidence in the future economic situation and think that there will be a recession.

Will buy a large number of U. S. Treasuries risk aversion, to obtain a stable risk-free return, in order to avoid potential risks.

The safe-haven operation of buying large amounts of US Treasuries will continue to push up the price of Treasuries and lower yields.

The most typical example is what we said earlier: in March and April 2020, everyone thought the financial crisis was coming.

So money flooded into Treasuries to avoid risk, and the yield on 10-year Treasuries was pushed to an all-time low at this stage.

At that time, we also told everyone that there would be no major crisis if there was a large discharge of water, and that the risk would arise only when inflation rose later.

Since the 10-year Treasury yield is the anchor of asset prices, the United States, as the global central bank, the anchor of global asset prices is the 10-year Treasury yield.

Then we can also deduce from this.The anchor of domestic asset prices is the yield of domestic 10-year treasury bonds.

If we take the domestic market as an example, we will see it very clearly if we make a comparison here.

The chart below is a comparison of the total market yield of our A-shares and the yield of 10-year treasury bonds.

The orange line is the market-wide return of A-shares. The blue line is the yield on the 10-year Treasury bond.

We can see that the position marked by each ellipse is basically the stock market-wide return, which is much higher than the 10-year Treasury yield.

At this time, it often corresponds to the important bottom of the stock market, after which money is likely to flow from the bond market to the stock market.

If we look back at history, we will also find that:

There is a common characteristic that the stock market bottomed out in 2005, bottomed out in 2008, bottomed out in 12 years, and even bottomed out at the beginning of 2019.

That is, the annualized yield of stocks in the whole market is already significantly higher than that of 10-year Treasury bonds.

The position marked by each rectangle is the ten-year Treasury yield, which is much higher than the market-wide yield.

Every time you get to this stage, it is likely that the stock market is about to peak. There is a high probability that money will flow out of the stock market into the bond market.

04 term spread

Sharp investors usually judge the future economic trend according to some leading indicators of the market.

There is an important leading indicator related to Treasury yields, called term spreads.

There may be people here who don't know what the term spread is, so let's first explain the meaning of the term.

The term spread, as the name implies, is the difference between the yield on a long-term bond and the yield on a short-term bond.

We know that the longer the maturity of the bond, the greater the uncertainty and the lower the time value of the currency.

So these messy factors are usually taken into account when pricing bonds.

As a result, the discount rate of risk compensation for long-term bonds will be higher, that is, the yield on long-term bonds will be higher.

We usually see that, except for short-term liquidity constraints, long-term bond yields are generally higher than short-term yields.

If you don't understand here, just think about bank deposits. Is the interest rate for long-term deposits generally higher than that for short-term deposits?

Term spreads are not immutable. As the market environment changes, they will narrow, expand or even hang upside down.

The reason for these changes is also simple: people's expectations for the future economy have changed a lot.

Because the yield on long-term treasury bonds represents the market's expectations for future economic growth and inflation, which is mainly affected by macro fundamentals.

The yield on short-term treasury bonds reflects the liquidity easing of the current market. Whether the funds are loose or not directly affects the trend of short-end treasury bonds.

To put it simply,The short-term yield looks at the capital side, while the long-term yield looks at confidence and expectations.

The term spread of long-term and short-term government bond yields reflects everyone's expectations of the subsequent economic trend at this stage.

When term spreads narrow or even hang upside down, it usually means that people are very pessimistic about economic expectations for the future.

When the term spread widens again, it reflects people's optimistic economic expectations for the future.

Judging from the recent maturity spreads on US Treasuries, the curve structure has widened from flat to wider, which is a normal response to the economic recovery.

The rapid rise in long-end US bond yields and the widening structure of the maturity spread curve reflect investors' mixed feelings about future economic growth and inflation.

The good news is that the steep rise in the yield curve generally means that subsequent economic growth will be stronger.

The worry is that economic growth will lead to inflation, which could cause the Fed to change the direction of monetary policy and raise interest rates.

So what people are worried about now is that the 10-year Treasury yield is rising, causing the Federal Reserve to change the direction of monetary policy.

This move to raise interest rates would pose an unparalleled risk to global asset prices, which are currently high.

That's why we can see that while US Treasury yields have soared, although the money on the market is very loose,

But there has been a pullback in US stocks and a fall in gold, which is essentially worried about a shift in monetary policy to interest rates because gold itself is very sensitive to interest rates.

05 several risk indicators

As can be seen from the chart below, it is not common for backwardation to have forward discounts on inflation expectations when the 10-2 term spread in the United States has widened in history.

The last time it was around 2008, there was such a spread structure. The result was not so good after that, followed by the global financial crisis.

Here, five-year inflation expectations in the United States have also exceeded 10-year inflation expectations for the first time in nearly a decade, and the last time this happened was in 2006-07.

We know that asset prices have risen for a long time against the backdrop of loose monetary policy by central banks around the world and low interest rates at zero.

In this context, many asset prices have entered a bubble trend. This has led to the prices of various types of assets, which are very sensitive to the level of interest rates.

Now with the help of vaccines, the epidemic situation has reached an inflection point in many foreign countries that have been vaccinated in large quantities.

People here feel that once the epidemic improves further, with the increase in the speed of money circulation, inflation in the United States will further increase.

After inflation rises, the time for the Fed to adjust its monetary policy will be getting closer and closer. The rise in interest rates will eventually lead to a revaluation or even collapse of asset prices.

It can also be seen from the market's expectation of the timing of the interest rate hike:As the economy recovers and commodity prices rise, expectations for the timing of interest rate hikes are also moving forward.

Because of the expectation of raising interest rates ahead of time, the rapid rise in interest rates on 10-year government bonds during this period has had a huge impact on market expectations.

Whether it is the domestic or US market or even gold, we can see that there is a pullback or decline.

But it should be noted here that although we can link the yield on the 10-year Treasury bond to a certain extent with the increase in interest rates.

Because whether ten-year Treasury yields rise or interest rates rise, it is the result of inflation brought about by the recovery. But don't simply regard the relationship between the two as causality.

The main driver of the rate hike is inflation, not the rise in 10-year Treasury yields.

The rise in the yield on 10-year Treasuries does not mean that the market is bound to go wrong immediately.

If we look back at 2013 eight years ago, the yield on US 10-year Treasuries climbed from 1.76 per cent to 3.01 per cent.

The yield on this government bond rose by the highest level since 2009. However, the stock market did not plummet that year, only the bond market and gold.

This year, the stock markets of the United States and most developed countries even showed double-digit gains.

Among them, the Dow Jones index rose 26.5%, the biggest increase in the past 18 years. The s & p 500 also posted an annual increase of 32.39%, the best year since 1997.

So the current rise in 10-year Treasury yields can only be thought of as a shift from safe-haven assets to risky assets.

But the rise in Treasury yields does not mean that interest rates will rise soon. Only a rise in commodities related to the lives of ordinary people can herald the arrival of an interest rate hike.

Looking back at history, at least before the Fed raised interest rates, every fall in US stocks was a buying opportunity.

Usually we think that the real risk will occur when interest rate spreads are upside down in the next 10-2 years and interest rates are raised more than three times in a row.

04 releasing water is the biggest fundamental

In fact, ten-year Treasury yields have been climbing since last July.

Now, after the release of the Biden 1.9 trillion, 10-year Treasury yields are starting to rise sharply, in large part because it is judged that the economic recovery is about to accelerate. This economic stimulus is not only money, but also fiscal stimulus.

If the double stimuli are superimposed, the power of the outbreak will be very amazing, and the problems that will break out later will also be very amazing.

Many people here may feel that they have been doing all kinds of relaxation in the past, and they have not seen any problems.

The biggest difference this time is that although quantitative easing has been carried out in the past, it is mainly monetary easing and there is no fiscal stimulus.

Money with easy money will only flow to the rich, which ordinary people can't get, or very little.

When the rich get the money, they will flow to all kinds of assets and continue to blow bubbles. Therefore, most of this money flows into assets, will not flow into the market, and prices are fairly stable.

After this fiscal stimulus, ordinary people can also get the money. After ordinary people get the money, except for a small part of the investment, most of it will be spent on consumption to make ends meet.

People are used to cutting back on consumption in the face of pessimistic expectations for the future, so you see that the savings rate of Americans has been rising recently.

What the government does at this time is to keep printing money to supplement the reduced funds on the market. Just as Biden is doing with his 1.9 trillion fiscal stimulus.

Such a big stimulus went down, coupled with a combination of monetary and fiscal stimulus, and the big guys immediately cheered up.

Later, with the economic recovery, people's expectations for the future improved, and they began to spend boldly again.

At this time, I will take out the money I saved before, plus the extra money printed on the market. As the total amount of money rises, the speed of money circulation will soon take off.

We know that the composition of the Fisher style is MV=PT, where M is the total amount of money, V is the velocity of money, P is the price of goods and services, and T is the capacity of goods and services.

The total amount of M money has been printed so much, the velocity of money V has risen again, and the production capacity of goods and services T cannot be expanded rapidly in the short term, so the price of natural goods and services will take off.

There must be someone here who wants to say that the central bank can't be a little forward-looking here and withdraw some of the money printed before.

This cannot be done at all. The data of central banks all over the world are lagging behind, both at home and abroad.

By the time we see the data, prices have been taking off for some time. At this time, as money flows faster and faster, the economy will overheat and inflation will soar.

There is a problem here, you know, the living standard of the middle and lower classes in the United States is not as good as it was 30 years ago.

Some time ago, the power grid was paralyzed by extreme weather, and many people even went to the garbage dump to rob shops for spoiled food discarded.

If prices take off, can they stand it?

You know, in the past year, production has stalled because of the epidemic. The global industrial chain is not very smooth, we are more in the consumption of inventory.

The Federal Reserve, the global central bank, has been printing a lot of money, which means that there is more money on the market and less production capacity.

So far, only China has effectively controlled the epidemic and resumed production.

We see that hot foreign trade orders continue to pour into China from the third or fourth quarter of 2020. This is the reason.

Biden's new wave of fiscal stimulus is about to begin, but the global industrial chain has not yet fully recovered.

This operation is tantamount to using more money to chase the scarcer production capacity of physical goods.

Although inflation in the United States has not been high in the past year, we will soon see an acceleration in inflation with the implementation of the Biden stimulus.

Recently, American steel, a leading indicator of the economy, has begun to hit new highs without fear of risky asset fluctuations.

The faster flow of money and the strong demand for capital brought about by the economic recovery will lead to higher inflation in line with real interest rates.

As we said in October 2020, even Buffett is betting on inflation because of the economic recovery.

Since taking office, Aunt Yellen has hinted many times to let people buy financial assets. To a large extent, it is because there is no way out for U. S. stocks in this position. The US stock bubble must not be burst here, or it will go straight into a depression.

Although frantic printing of money will not solve the problem, it can delay the problem. What if someone falls down first in the process?

After the United States issues more money, a large amount of money will start from the United States.

Over the next year or so, it flooded the world, repricing all asset prices, pushing up global asset price bubbles and inflation.

This can also be confirmed by Morgan Stanley's statistics. Global stock markets have generally risen since 2000 in an environment where real interest rates and inflation have risen at the same time.

When inflation rises later, when the United States begins to shrink its currency, it is time to worry about the real bursting of the bubble.

Because at that time, these dollars will slowly flow out from the rest of the world. The dollar returns home with a lot of benefits, leaving these inflated assets to the locals to pick up.

The locals do not have so much money to buy these high-end assets, and the result is that local asset prices collapse and the bubble bursts.

In countries where asset price bubbles burst, it is usually a chicken feather. Then the United States will release a lot of water to save the market and copy the high-quality assets of these countries with US dollars.

Here we can also make a bold guess on the circumstances under which the US stock bubble will burst.

As can be seen from the PE chart of US history below, US stocks had a peak price-to-earnings ratio of 45 times in 2000.

This time, driven by Biden's $1.9 trillion stimulus package, it is likely to surpass the peak of 2000.

From its current position to the bubble peak of 45 times earnings, there is probably an increase of less than 30%. If you want to surpass the 2000 bubble, this position is likely to rise by another 25%.

I do not deny that there is a bubble in US stocks, and the bubble is quite big. But now people who say that the bubble is about to burst feel either stupid or bad.

At present, water release is the biggest fundamental.The water has not been released yet, the interest rate has not been raised, and the bubble is about to burst.

Biden has just signed the COVID-19 rescue bill of 1.9 trillion, and there is also a lot of money printed in Europe and Japan, which has not been paid out so far.

At present, only China is picking up in the world's major economies. Foreign capitalists are not fools. They know very well where the epidemic is well controlled and where it is conducive to production.

Against this backdrop, it is obvious where the money will go.

On the other hand, recently, someone has always told me that China wants to squeeze a bubble, and now it is a bubble. Do you know what it is?

The foreign money printing machine is running at full horsepower, printing money constantly. Domestic efforts to squeeze bubbles, driving down asset prices.

This has not become a foreign money printing machine to print waste paper, take these waste paper in, copy the bottom of our real assets? I'm afraid I can't understand this idea.

At the end:

As we said before, no matter who takes office as president of the United States, he will give the rich lower interest rates and lower tax rates in the short term. There are more dollars, higher stock markets, and a more appalling gap between the rich and the poor to cope with everything before. Because he had no choice.

As long as you stop at a loose pace here, you will die immediately. Keep living for a few more days, in case someone falls in front, you can carve up the asset package.

As we said in "inflation is followed by debt collapse", this is the last boom before the economy turns into a depression.

In the coming year, as the Federal Reserve, the global central bank, continues to release water, and the economy continues to recover.

In 2021, we will see everything rise. Maybe it's just your salary, stay there and don't go up.

In the end, the rise in prices rose to a level that people at the bottom could not bear, and then the Federal Reserve was forced to raise interest rates.

By this time, the economy should have been overheated, so people did not feel the power when they began to raise interest rates.

As interest rates rise, liquidity is tightened step by step, and eventually the asset price bubble will burst at some point.

Then came the financial crisis and the global depression, as severe as the Great Depression of 1929.

By this time, the Fed should also have run out of ammunition, and negative interest rates may be the only option at this stage.

In fact, in the context of the Federal Reserve, the global central bank printing money, the middle class, which has managed to save some money, also has few options.

You can only choose between devaluing your cash and buying assets to hedge and print money to maintain the purchasing power of your savings.

Everyone has their own choice. My choice is to run towards the bubble and leave with cash before the bubble bursts. You may also have your own choice.