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June 21, 2021, 03:41:37 AM |
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As we all know, China and the U.S. are the two countries that have the greatest impact on Bitcoin.
At present, the Fed has not yet initiated a deflationary policy, the US dollar continues to be issued, and the interest rate hike proposal has not yet passed. But at the same time, China has not overprinted money. The reasons are worth pondering.
The strategic significance of Trump's tariff war with China is to promote capital to move out of China and create a distributed multi-production country competition pattern, so that the United States is no longer restricted by a single supplier and reduces its own strategic risks.
Just as China was facing the trouble of capital relocation, COVID-19 broke out. Unexpectedly, due to the good control of the epidemic in China, countries that originally wanted to lure and force manufacturing capital to flee were all captured by the virus. China has achieved a great monopoly advantage for a while. The lifestyle products that were originally not strong in core competitiveness also suddenly gained a competitive advantage. This inflation was reversed back to the United States. The prices of living materials have risen one after another, causing prices to continue to inflate.
However, the Fed is waiting for the epidemic to end, the vaccination rate will increase, and the spread of the virus will slow until it is completely wiped out, waiting for capital to flow from China to foreign countries. Then China will lose the pricing power it has acquired due to COVID-19. Then China will be forced to cut prices, or adjust the exchange rate, relative depreciation and thus reduce prices in disguise. The price inflation in the United States will be completely resolved. The Fed understands it well, so they confidently say that this is all temporary inflation.
But China will also foresee this information in advance, and the most reliable way is to implement quantitative easing policies. To achieve the same level of quantitative easing as the United States, so as not to suffer losses after the epidemic is over.
Central banks around the world are in a sense the shadow branches of the Federal Reserve. China's is no exception. Some people say that if the epidemic is brought under control, the Fed will raise interest rates and assets will plummet. NO. Prior to this, other countries must take turns to implement unlimited quantitative easing until the level of quantitative easing reaches the level of the United States, otherwise it will cause a blow to their own economies. After the beginning of the round of easing policies in the second half of the year, the price of Bitcoin and other assets came to a big bull market.
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