Chapter 317: Discussing some future trends

The future, like a fog, lies before us, making it impossible for us to guess or comprehend.

However, investing is a game with the unknown. Even if the future is unpredictable, we must make corresponding plans.

1. If there is a major crisis in the future, what form will it take?

In the past, such as 2007 and 2020,

After the global financial crisis caused by the U.S. stock market, investors rushed to sell their assets and exchange them for currency or gold.

At that time, it will cause global liquidity tension and lead to a temporary appreciation of the US dollar.

After that, demand will plummet, commodities will plummet, the Federal Reserve will cut interest rates and implement QE, and the US dollar will flood the market, causing severe inflation in the future.

But now is different from the past.

Because, with the support of our country, a system independent of the European and American economies,

Therefore, if this round of financial crisis breaks out in Europe and the United States, it will definitely be different from previous ones.

1. In previous major financial crises, the stock market often plummeted, coupled with the appreciation of the US dollar.

This time, a small global financial turmoil was caused by the devaluation of the US dollar and the surge in the RMB.

This shows that a lot of mainland, Chinese and Japanese capital are moving to the domestic market to avoid risks.

The RMB has replaced the US dollar as a safe-haven currency.

2. In previous major financial crises, all commodities plummeted.

However, if a global financial crisis occurs in the future, it will probably be different.

This can be seen from the commodity prices in 2022-2023.

In this tightening cycle of dollar appreciation and interest rate hikes, commodity prices have been very resilient, especially copper and gold prices, which have basically not fallen and are even gradually rising.

This shows that someone is buying on a large scale.

The buying of copper is self-evident, while the buying of gold comes from central banks around the world and people in various countries who are seeking risk aversion.

Therefore, if a global financial crisis were to occur, it is very likely that the commodity market, especially copper, gold, and other strategic materials, these safe-haven assets, would perform outstandingly.

This is reflected in A-shares, and there is a great possibility that during a global stock market crash, my country's A-shares may perform relatively resiliently.

In other words, GJD will spare no effort to buy undervalued assets at the bottom tray.

In other words, in the future, my country's economy and capital market should be the first in the world to recover.

3. How much has the US dollar depreciated?

Every global financial crisis has been accompanied by a series of unexpected events.

This is reflected in the financial market, where everyone prospers together and suffers together in investment returns.

For example, in the stock market crash in 2008, Ping An of China suffered a setback, stepped on the landmine of Fortis Group, and eventually lost tens of billions.

At that time, several banks also saw investment returns.

Now, after experiencing the decoupling of China and the United States, my country's major investment institutions should basically have achieved risk isolation, or in other words, should have invested in de-Americanization (unlike many big Vs who are still calling for taking over in the United States at this moment).

However, a new risk point has now emerged.

That is, the risk of US dollar depreciation caused by the revaluation of the US dollar.

That is, if the United States completely got rid of the Bretton Woods system in 1971,

The US dollar quickly depreciated by nearly 20%!

Therefore, facing this huge, potential black swan risk, we should now avoid it. Companies (especially financial companies with leverage) still have a large amount of US dollar accounts receivable, US bonds, US dollars, US G assets, etc. on their books.

Instead, we should focus on companies that have large amounts of debt denominated in US dollars on their books.

Because once the US dollar depreciates sharply, the former will lead to a sharp drop in income, and the latter will lead to a sharp drop in debt.

Therefore, the future international capital market is likely to be turbulent and will affect the domestic market through various channels.

However, since the risks in the domestic market have been released, although there will be severe turbulence, under the command of the invisible hand, dangers and opportunities coexist and it will eventually bottom out and rebound.

So, we need to have a big heart for the coming months.