Chapter 715 Enterprise Forum

A five-star hotel in the capital is holding a corporate development forum.

Although it is called the Enterprise Development Forum, it is jointly sponsored by the National Development and Reform Commission and the Ministry of Commerce. In addition to the heads of major enterprises, there are also some well-known economists and some policy makers.

The theme of this forum is how to deal with the global financial crisis.

Although China's financial system is not yet in line with international standards, at that time China's economy was still very dependent on foreign trade. The biggest impact of the financial crisis on China was not the financial risk, but the loss of export trade.

Foreigners have no money to spend, which naturally affects China's foreign exports. Therefore, many export-oriented enterprises have come to participate in this forum, and they hope to obtain policy support.

As soon as Li Weidong walked into the venue, he saw several acquaintances, all of whom were well-known private entrepreneurs in China.

Chairman Li, sit here! The acquaintances have begun to greet Li Weidong.

Li Weidong stepped forward with a smile and said, Mr. Zhang, I haven't seen you for some days. You look thin. You must have been exercising recently, right?

I am fitness and thin, I am sad and thin! Mr. Zhang, who was opposite, sighed, and then said: The US economy is not good, and our orders for the next quarter will drop by 50%. If there is no such 50% I don’t even know how to get through the next year’s close!”

Another person next to him said: Mr. Zhang, your situation is good, our factory has not received overseas orders since May, and now it is all supported by domestic orders. If there are no domestic orders, , we have to go out of business!

Chairman Li, how is the situation of your Puppy Group? A large part of your profits also come from exports! The third person asked.

Everyone is the same, the economic environment is like this, and our life is not easy. Li Weidong paused, and then said: However, our main business is small household appliances, kitchen appliances and beauty equipment, and the impact will be greater than that. Appliances are lower. It’s always easier for women to make money.”

General Zhang said: The leaders of the ministries and commissions will be present and may explain the next policy. In addition, there are well-known economists, and I heard that there are members of think tanks. They will make predictions about the next international economic situation. , we have to listen carefully, if the economy continues to decline next year, I have to quickly reduce the scale of production.

Yeah, I also have to formulate a raw material procurement plan for next year. If the international economic situation is still not good next year, I will not dare to purchase too many raw materials. Another person said.

Li Weidong said, You guys talk first, I'm sorry.

Zhang Zong looked at his watch and said, The forum is about to start, you should find a place to sit, otherwise there will be more people and there will be no good seats.

Isn't there a lot of vacancies ahead? Li Weidong said and pointed to the rostrum.

The seats below the rostrum are reserved for leaders of ministries and commissions, as well as economists from think tanks. How can we get business from us! Those economists sit in the front, and it's convenient to speak on the stage soon. President Zhang said. replied.

Li Weidong smiled slightly, lowered his voice and said, Mr. Zhang, I am here today as an economist to participate in the forum!

...

Li Weidong and three other economists sat on the podium together.

The stage is full of famous economists,

What is Li Weidong going to do?

I haven't heard that Li Weidong has an important degree in economics!

Those of us are usually so busy, even if we have a degree, it is probably a diploma.

Many people who didn't know Li Weidong began to talk in a low voice.

You don't know yet, but Li Weidong accurately predicted the Asian financial crisis. He really understands the economy.

There are grapevines saying that before the outbreak of the subprime mortgage crisis in the United States, Li Weidong also warned some domestic financial institutions.

The two people who spoke apparently had heard rumors about Li Weidong.

At this time, the host opened his mouth and introduced; Today we have invited four guests to discuss issues related to the subprime mortgage crisis in the United States. First of all, welcome Professor Huang Dongsheng from Renmin University!

With applause, Professor Huang Dongsheng stood up and bowed to everyone.

The host then introduced: Welcome to the special commentator of Economic Weekly, Professor Sun Haifeng of the National Economic Research Institute!

Applause broke out again. Everyone knows that the National Economic Research Institute is an important think tank in economics, so Professor Sun Haifeng is also a member of the think tank.

Next, welcome Cai Guorong, Vice Dean of the School of Economics and Business Administration of the University of Hong Kong! Finally, welcome Li Weidong, Chairman of Puppies Group!

After introducing the four guests, the host cut to the topic of today.

I only heard the residents say: The financial crisis caused by the sub-prime mortgage crisis in the United States is still intensifying. Not long ago, Lehman Brothers, the fourth largest investment bank in the United States, has filed for bankruptcy. Recently, it was reported that Freddie Mac and Fannie Mae would also Bankruptcy. Once Freddie Mac and Fannie Mae go bankrupt, it will be a fatal blow to the US real estate industry.

In response to the financial crisis, the U.S. government recently proposed a financial rescue bill, which will invest $700 billion to purchase financial derivatives related to U.S. subprime loans. At present, this rescue financial bill is stuck in the U.S. House of Representatives. Four An expert thinks this bill will eventually pass? If you think you can pass, please raise your right hand, if you think you cannot pass, please raise your left hand.

All four raised their right hands in unison.

The host continued: It seems that the opinions of the four experts are relatively unified. Since the four experts all feel that the bill can be passed, the four experts are also invited to analyze and predict when the bill will be passed. let's start!

Professor Huang Dongsheng cleared his throat and said, In my opinion, the sooner the financial rescue bill is passed, the better, but the problem is that 700 billion US dollars is not a small amount, how will this money be spent? It is a difficult problem, and I think it will take a consultation between the U.S. Treasury Department and the Federal Reserve to determine the time.”

Professor Huang is very thief, he did not predict the exact time, after all, who can say for sure! If the prediction is wrong, what a shame.

What do you think of Professor Sun? the host asked again.

I agree with Professor Huang's point of view, but let me add a few words. Although this financial rescue bill was proposed by the US government, the specific amount and the specific content of the plan have not yet been finalized. There are still different opinions. Professor Sun replied.

It is also a chicken thief's answer, and no exact time is given.

President Cai, what's your opinion? the host then asked.

Whether this bill can be passed will affect the votes in the US presidential election. I think there are two possible time points, one is before the US election in November, and the other is after the US election in November. At the latest. It should be no later than mid-December. Cai Guorong replied.

Chairman Li, what do you think? The last person the host asked was Li Weidong.

My prediction is bolder than President Cai. I think the Democratic Party will delay this bill until the end of the general election. It is estimated that it will be implemented in late November, and the amount of the bill will increase to more than 800 billion US dollars. Li Weidong replied.

The first question is just a warm-up, and the next is the real topic of discussion. The host then asked: Four experts believe that the US's financial rescue bill can help the US economy get out of the current predicament and recover. To a normal level? Raise your right hand if you think you can, and your left if you think you can't.

This time, Li Weidong decisively raised his left hand, while the other three economists raised their right hands.

It seems that our expert opinions have diverged. Then I will directly ask Chairman Li, why do you think the US government's financial rescue bill cannot restore the US economy to a normal level? The host asked.

Li Weidong took the microphone and replied: The financial rescue plan proposed by the US government this time is mainly to purchase derivative financial products of non-performing mortgage loans. The purpose is to stabilize the financial system and rebuild the credit of financial institutions in the form of state guarantees. , to restore liquidity in credit markets.

Therefore, this plan can only stabilize the market, but cannot stimulate the economy. The confidence of American consumers lost because of the subprime mortgage crisis will not be restored. I think the US economy wants to return to normal levels, but these hundreds of billions of dollars are far from enough, and more economic stimulus is needed.

Professor Huang's next speech, he took the microphone and said: I'm not so pessimistic, 700 billion US dollars is already a huge financial stimulus plan, and more importantly, this time is the financial derivative of the US government's purchase of subprime loans. Goods, guaranteed by the government's credibility, I believe that the US financial markets will soon restore confidence and liquidity!

What Professor Huang said was exactly the judgment of most economists at that time, and everyone was generally optimistic about this financial rescue plan. Not only Chinese economists think so, but also American economists.

First, because the amount of 700 billion US dollars is very huge, it can be said to be unprecedented. If such a large sum of money is thrown, it will definitely arouse a strong market reaction.

The second reason is that this time, the US government directly took action. The US government purchased the financial derivatives of sub-prime mortgages, which means that the US government is willing to make a bottom line for the sub-prime mortgage. The academic community is naturally optimistic about the effect of saving the financial plan.

Dean Cai next to him also took the microphone and continued: I will add Professor Huang, this kind of financial stimulus plan involving hundreds of billions of dollars is not something that can be launched casually. First and foremost, it is There is sufficient financial support. With the current financial situation of the United States, it is already necessary to borrow the 700 billion yuan, and it is unlikely that there will be more economic stimulus plans in the future.”

Dean Cai glared at Li Weidong as he spoke, as if to say more economic stimulus plans in your mouth, it is impossible to get out of danger at all.

Li Weidong replied: Funding has never been a problem. The United States can be solved by means of quantitative easing. At that time, let alone US$700 billion, US$7 trillion is not a problem.

Speaking of quantitative easing, the other three economists frowned involuntarily.

It was Professor Huang who took the lead and said: This is unlikely! Quantitative easing is a powerful medicine for the economy. Given the size of the US economy, if quantitative easing is implemented, it will have an incalculable impact on the world's economy. There is no need for the United States to use such a high-risk economic instrument.

Li Weidong replied: Professor Huang, since the 9/11 incident, the United States has been at war, and the United States' finances will definitely not be able to provide the 700 billion US dollars. So I don't think it is necessary to wait until the future, the 700 billion US dollars used for the rescue of the financial bill. US dollars, have to rely on quantitative easing to solve.

And if the 700 billion US dollars cannot solve the problem, there will be many quantitative easing in the future. If this 700 billion yuan is QE1, then there will definitely be QE2, QE3, and even QE4. Quantitative easing will not end until the U.S. economy returns to normal.

...

Now people are no strangers to quantitative easing, and they all know that this is printing money. After all, many countries are using this trick during the epidemic, and they are even printing more than anyone else.

In 2008, quantitative easing was a new term.

It was the Japanese who first proposed the concept of quantitative easing. Japan's economy fell into stagnation after the Asian financial crisis. By the beginning of the 21st century, the economies of the Four Asian Tigers and Southeast Asian countries had begun to recover, and the Japanese economy was still No improvement.

So the Koizumi government, which was in power at the time, resorted to quantitative easing. Print money and cut interest rates, releasing money into the market in anticipation of inflation to drive economic growth. Quantitative easing was proposed at this time.

Japan's quantitative easing policy continued until Abe's first term. After Abe resigned, the quantitative easing policy ended. It was not until Abe became prime minister for the second time in 2011 that he took out the trick of quantitative easing. The so-called Abenomics and Abe's three arrows are all about quantitative easing.

From an economic point of view, since the collapse of the Blington Woods system, the United States has begun to implement quantitative easing.

Interest rates in the United States are very low, which is a very good thing for consumers and businesses. Consumers go to sell a house, and the annual interest rate is only a few points. Thirty years of loans can save another house.

Low interest rates make consumers more active in taking out loans, not only for buying cars and houses, but also for many basic daily necessities. As for those who are engaged in business operations, they will seek loans as much as possible.

But when the common people went to the bank for a loan, the bank had no money in their hands.

This is of course also the result of low interest rates. Interest rates are not only loan interest rates, but also deposit interest rates. In the United States, the loan interest rate is low, and the deposit interest rate is also low.

Most Americans live on loans, even though they have several cars, live in a big suburban mansion, and actually owe a whole bunch of debt, behind the glossy appearance, they have no savings in their hands.

And the wealthy in the United States, because the bank interest rate is too low, do not choose to deposit money in the bank. The financial industry in the United States is so developed, and there are many financial products that can make money.

If the bank can't absorb the deposit, there is no money to make the loan, and at this time the bank will go to the Fed to borrow money.

The Fed also has no money in their hands. Fortunately, they have another means, which is to print money.

So the Fed prints money, then lends the money to the bank, and the bank releases the money to the market in the form of a loan. When money reaches the market, it is either converted into public consumption or into corporate loans, which ultimately drives the growth of the U.S. economy.

The core of this model is still printing money, which is essentially the same as quantitative easing.

The difference is that the printing of money in this model is based on market demand, that is, the market has this part of the loan demand first, and the Fed meets this demand by printing money.

This kind of money printing caused by demand is actually something that central banks like to see, because whether it is loan consumption or loan production, it can promote economic growth. Therefore, the central banks of various countries are also doing such things. Generally, as long as there is demand in the market, they will definitely release water.

However, in response to the subprime mortgage crisis, the quantitative easing undertaken by the United States is not based on market demand, but quantitative quantitative easing.

That is to say, regardless of whether the market has this demand, the Fed will take this money out.

The financial rescue bill proposed by the Bush administration is mainly to purchase financial derivatives from subprime mortgages. The purpose is to stabilize the financial market and release financial liquidity.

But the Bush administration has been fighting wars, and the huge military spending has already emptied the US finances. Therefore, the money to save the financial bill can only be solved through quantitative easing. This is the first quantitative easing in the United States to use a quota, so it is also called QE1.

The amount of this bill sent to the House of Representatives was 700 billion. Later, the Democrats asked to increase the amount to 850 billion. In March after the *** came to power, the amount has increased to 1.25 trillion. When QE1 ended, the Federal Reserve released data that it spent a total of 850 billion. 1.725 trillion.

That is to say, during QE1, the Federal Reserve printed $1.725 trillion, and this does not include the portion of daily loans issued in the United States.

QE1 has increased from 700 billion to 1.725 trillion, a full $1 trillion, but it has not saved the US economy as economists predicted, because consumer confidence has not recovered.

The hardest thing to build in the market is confidence. When you have confidence in the market, even if you don’t have money in your hands, you will invest in the market with usury loans. When you don’t have confidence in the market, even if everyone has a lot of money, they will not invest a single penny.

Therefore, those international rating agencies often release various so-called confidence indexes. The layman does not understand what these indexes are for, but the insiders know that this is a barometer of the future economic sentiment index.

This is also the magic of economics. No matter how sophisticated economic theoretical research is, it cannot restrict human behavior.

Many economists will feel this way. My research is obviously seamless. Why is it completely different from my research when it is time for the market to run?

Therefore, most economists are just doing an afterthought analysis, using the market behavior that has already occurred to confirm the economic theory.

That's what QE1 was, and it didn't work as well as economists thought, so the US government launched the second round of quantitative easing, or QE2.

The content of QE2 is to stimulate economic recovery by purchasing long-term treasury bonds and injecting funds into the market, that is, by increasing the supply of base currency.

As a result, the European debt crisis broke out at this time, completely offsetting the effect of QE2.

The Fed had to continue quantitative easing and successively launched QE3 and QE4. The whole process of quantitative easing continued until the second term of the ***.

Four times of QE, the Federal Reserve has printed about five trillion dollars, and the amount of capital leveraged by these five trillion dollars is even more difficult to estimate. Adding so much money to the market is bound to trigger inflation.

Fortunately, the economy of the United States is large enough that even if there will be inflation, it will not be immediately apparent, and the market needs a time to react.

In order to prevent the occurrence of inflation, after the end of QE, the US government began to formulate a plan to shrink the balance sheet.

Shrinking the balance sheet refers to shrinking the balance sheet, including shrinking assets and shrinking liabilities. Simply put, it means to recover some of the money that has been printed to avoid inflation or overheating of the economy.

The originator of the shortened table is also Japanese. In the early 1990s, when the Japanese real estate bubble burst, Japan adopted a policy of shrinking its balance sheet.

But unfortunately, the United States' policy of shrinking the balance sheet has just begun, and the ***'s term of office is coming. And the new President Wang is opposed to the reduction of the table.

Knowing Wang has overturned many policies of the Communist Party, such as medical insurance policies, such as withdrawing from the TPP, and he also wants to stop shrinking the balance sheet. Knowing Wang believes that shrinking the balance sheet is not beneficial to the economic growth of the United States.

But to stop shrinking the balance sheet requires the approval of the Fed, and the Fed prefers to continue shrinking the balance sheet to prevent serious inflation in the United States.

So understanding Wang took a different approach and launched a tax reduction policy. The corporate tax has been reduced from 35% to 15%, the personal income tax has been simplified from level 7 to level 3, and the threshold has been greatly increased. He even wants to abolish the inheritance tax.

Taxes are reduced, and the reduced money will naturally remain on the market. So from the perspective of economics, tax reduction is equivalent to putting money into the market.

The shrinking of the balance sheet is to recover funds in the market, and the shrinking of the balance sheet and the tax reduction are completely opposite monetary policies.

Therefore, when the scale reduction and tax reduction are carried out at the same time, it is equivalent to pouring water into the pool while releasing water outside the pool. Shrinking the table becomes useless.

To put it simply, the money printed in the four rounds of QE has not been recovered, but continued to remain in the market, which is equivalent to planting a time bomb for future inflation in the United States.

The next step is the arrival of the epidemic. The United States wants to send money to the people, but whether the US has money in the finances, so the market began to predict that the Federal Reserve will start the fifth round of QE.

As a result, the Fed came to a more ruthless, what do I want for the fifth round of QE, it is directly unlimited QE, not even a plan, it will save trouble!

During the two years of the epidemic, the Fed has been conducting QE. It is estimated that only the Fed itself knows how much money they have printed in the past two years. And the after-effects of printing money over the years, that is, inflation has finally arrived.

The supply chain disruption caused by the epidemic is the trigger for inflation. In the face of inflation, the US government is very clear that it is time to shrink the balance sheet again.

However, the ruling authorities are somewhat forward-looking in this regard. After the US economy suffered from the epidemic, it has not fully recovered. Once the balance sheet is reduced, it will definitely be detrimental to economic growth.

The United States was deciding when to start shrinking its balance sheet, and the conflict between Russia and Ukraine broke out. The inflation, which was relatively stable, broke out quickly, and it was still a global inflation.

The next thing is what is happening now. The Federal Reserve has started to raise interest rates continuously, funds have begun to flow back to the United States, the euro has depreciated rapidly, and has been on par with the US dollar, the Japanese yen has fallen even more fiercely, and the Korean won has also fallen to the level of the subprime mortgage crisis. .

The United States once again took advantage of the hegemony of the US dollar to cut the leeks of Europe and Japan, just like the Plaza Accord more than 30 years ago, but this time there is a new crop of leeks, called South Korea!