Chapter 271: When inflation hits, there are countless ways to get rich
Monday, May 13, 2024.
The release of a series of major news over the weekend has created great expectations for today's market.
So, Li Feng arrived at the VIP room of the business hall very early.
However, just as he sat down, Xiao Bo next to him shouted:
"Li Feng, have you seen this news? I never imagined that the once glorious FAW-Volkswagen would fall to such a state."
"Huh?" Li Feng heard this and quickly looked over. He saw an advertising slogan appearing on the computer screen in front of Xiao Bo. "FAW-Volkswagen is in its last and only window of opportunity for transformation. Apart from a desperate battle, we have no other choice but to unite as one and live against all odds."
The words are quite tragic and solemn, which makes people shocked.
You know, once upon a time, the joint venture cars manufactured by FAW-Volkswagen were a sweeping force and dominated the sales charts for many years.
However, unexpectedly, in just a few years, the gasoline vehicle industry was subverted by the logic of electric vehicles, squeezed into a corner, and forced to survive.
The world is changing so fast, like a chess game.
The scene where film cameras encountered digital cameras and Nokia feature phones encountered Apple smartphones is happening again in the automotive industry.
"I heard that last month, overall sales of joint venture cars dropped another 20% to 30%, even though prices have dropped significantly," Xiao Bo explained. "Furthermore, according to statistics, among low- and mid-range models, the average price of domestically produced cars has reached 150,000 yuan, while the average price of joint venture cars has dropped to 140,000 yuan. Joint venture cars have actually become synonymous with low-end cars."
"German cars are better off; they know how to adapt and are actively trying to survive. The most worrying thing should be Japanese cars. Faced with the trend of electric vehicles becoming smarter, Japanese cars currently have no sense of crisis..."
Xiao Bo talked freely.
After hearing this, Lao Chen frowned and retorted:
"You can't say that. Didn't you see the news a few days ago? Japan's auto industry profits hit a new high again. Toyota's profits doubled! Nissan's profits increased by 90%. Why are they not doing well?"
"Tsk—" Xiao Bo said contemptuously.
"Old Chen, you only know one side of the story. The reason Japanese car profits are skyrocketing is because they've been driving up car prices in the U.S.... Not only are new car prices rising, but used car prices are rising too... The same car, without any extra features, still costs tens of thousands more than in China!"
"You say this shabby, bare-bones car without even a parking sensor or a basic car system can only be sold at a high price in the closed market of the United States, exploiting the American people. In our domestic market, it can only be slashed in price, and still not be sold."
“This——” Old Chen was at a loss for words.
Indeed, in the past two years, the domestic automobile market has been swept by a storm of price cuts.
On the one hand, new energy vehicles are promoting the idea that "electricity is cheaper than oil", which has suddenly raised the price of entry-level A-class new cars to 79,800 yuan. On the other hand, the traditional oil vehicle market is promoting the idea that "oil is better than electricity", which has forced the price of oil vehicles to be lowered to less than 69,900 yuan.
Domestic car prices have plummeted.
This is obviously inconsistent with what Xiao Bo said, that car prices in the US market have generally skyrocketed by 20% to 30%.
Same planet, two markets, but the same industry is heading in different directions.
Behind this are the differences between market closure and openness, technological change and stagnation, and inflation and quasi-deflation.
Xiao Bo was obviously excited and said with a smile:
"Old Chen, your knowledge base should be updated. For example, let's take the automatic parking system commonly used in new energy vehicles. Domestic new energy vehicles are competing to launch it, and it is already very mature, but the Japanese and German systems have not yet achieved it. It is estimated that it will be difficult to achieve it in the next one or two years."
"The current pace of car iteration is similar to that of mobile phones: a small improvement every year, a major improvement every two years. One step slow, every step slow..."
"They used to look down on our domestic cars, but now they don't understand, and they won't be able to catch up in the future..."
Xiao Bo spoke passionately and logically.
What is revealed behind this is a microcosm of the global automotive industry.
In 2023, my country's annual automobile sales will reach 30 million units, making it the world's largest, most important and most competitive automobile market.
It can be said that whoever wins the Chinese automobile market will win the world.
In this round of changes in the automotive industry, domestic cars are visibly occupying the domestic market step by step and will gradually expand globally. Behind this is the leap in the competitiveness of my country's manufacturing industry.
The automobile "butterfly" just flapped its wings slightly, and several important industries around the world will undergo fundamental changes, which will have an irreversible impact on the economies of various countries.
While we were discussing, A-shares opened.
Today, the Shanghai Composite Index opened low at 3139 points, and then began to slowly climb upwards.
On the market, the shipping and shipbuilding sectors were extremely active, and the European container shipping line soared again by more than 10%, setting a recent high of 3,976 points, which has doubled from the lowest point of the year.
COSCO SHIPPING Holdings took the lead with a surge of over 5%, hitting a new high of 14.12 yuan. Following it, COSCO SHIPPING and China Merchants Energy Shipping also surged by over 3%, setting new highs...China Heavy Industry and China Shipbuilding also saw good growth.
In contrast, non-ferrous metals, coal, liquor and real estate, which were active in the past few days, weakened.
The rotation of increases among various sectors of the A-share market seems to be becoming more and more "scientific".
Q&A with stockholders:
1. "The Ancient Emperor Who Loves to Eat Fried Rice in Chicken Soup": Hello author, could you please analyze the European chart? It has risen too sharply recently.
The recent surge in container shipping futures prices for Europe is due to three reasons:
First, the Red Sea crisis.
The Houthis blockaded the Red Sea and attacked ships transporting supplies to Israel from Britain, the United States and other countries, forcing a large number of container ships to detour around the Cape of Good Hope, resulting in longer routes and delays.
Second, Europe’s inventory replenishment cycle has begun.
After experiencing destocking in 2022-2023, foreign countries began to replenish inventories in large quantities this year, resulting in an increase in container shipping capacity.
Third, shipping companies control shipping capacity.
The container shipping industry is now in a state of monopoly by leading companies. When they see a mismatch between supply and demand, they start to stop shipping capacity and fleece the customers.
Container shipping is the vanguard of inflation, and COSCO Shipping Holdings is the guiding light for its smaller brothers. I wish the big brother can increase its price more and more slowly, so that the smaller brothers can follow suit and get some benefits.
2. "Chen Xiaotian":
Hey, I have a question. Basic necessities like water, electricity, gas, and even fruits and vegetables are all seeing price increases. It's clear that inflation will trickle down. But honestly, our incomes haven't increased. What are some ways to increase residents' spending power in the future? A slow, moderate stock market increase might be one option.
Currency, currency, there is currency only when there is goods. First there are goods, then there are currency.
Behind every penny, there is a penny worth of goods. These goods are sometimes physical goods, such as grain, oil, minerals, industrial products, etc.; sometimes they are services, such as medical services, legal services, intermediary services, maintenance services, and even transportation, exhibitions, publicity and other services; sometimes they are virtual items, such as purchasing point cards, rewarding anchors, purchasing virtual currency, investing in speculative stocks, futures, bonds, etc.
In the last cycle, the decline of the real estate industry not only led to a decrease in the output of real estate and the physical products of the real estate-related industrial chain, but also a decrease in the various services produced, such as intermediary services, financial services, publicity and promotion services, etc., as well as a series of other similar fission services.
The reduction of these goods will inevitably lead to currency tightening.
By analogy, the rectifications in real estate, education and training, online finance, and medical care launched in 2021 are essentially changes to the industry and austerity hedging measures for the economy.
This is also the prelude to the current situation where the economy is at a low point and the industry is undergoing rebirth.
Only through change can we continue to grow, only through self-reform can we move forward at a slow and light pace, and only through suffering can heroes emerge.
Without the hard times of the past few years, we would not be able to have the good days we have today. Only an economic slowdown can force social change and progress and bring about new vitality.
Otherwise, social trends will continue to develop in the direction of maximum inertia, making quick money, making money, and making money with money in the real estate, education and training, online finance, medical and other industries.
The whole society will become more and more impetuous, and the thoughts of people in the society will become more and more impetuous, and they will only like to make a quick buck and run away.
How can we calm down, patiently overcome those difficulties, concentrate on researching and developing those blocked industries, thereby breaking through our own limits and promoting the emergence of new industries?
Many people's complaints nowadays are nothing more than memories of making quick and easy money in the past. They are just tasteless complaints about not being able to adapt to the stable life they have today.
Fortunately, the days of suffering are gradually passing, and a bright future is slowly approaching us.
In the future, with the arrival of a new round of inflation and a new round of prosperity, a new round of benefit distribution will begin.
When inflation comes, there are countless ways to get rich.
All industries will flourish, it just depends on whether you can discover and grasp them.
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