Major central banks coordinated rate cuts for maximum psychological impact. I am afraid that the impact would indeed be psychological. Markets may stage a significant bounce soon. If this round of rate cuts isn't enough for a bounce, the central banks will come back with more, because they are targeting stock prices. In the short term, they will win.
But, central banks cannot cure the problem. A hard landing of the global economy is unfolding before our very eyes. The reason is, of course, credit contraction. The credit system doesn't function because there isn't enough equity capital in all components of the western economy. Households, at least Anglo-Saxon bit, have borrowed against inflated house values. Now, property prices are falling. They have to de-lever to stave off bankruptcies, let alone borrowing more to sustain consumption.
Western financial institutions have warehoused credit derivatives backed by inflated house values. The bursting of the property bubble has destroyed their capital base. Western governments are injecting capital into them through share expansion or buying toxic assets at inflated prices. This process is under way. But, unless households have restored their equity capital, by increasing savings sufficient enough to offset house value decline, they cannot borrow from banks. Even if they want to, banks cannot lend to them for lack of collaterals.
The western business sector is least levered. But, they won't borrow and invest when the consumer sector is comatose. Besides, a significant part of the business sector is highly levered. Private equity funds have spent trillions of dollars on leveraged buyouts ('LBOs'). These highly leveraged businesses are vulnerable to an economic downturn. A major crisis in the LBO sector is coming soon, I think. It will cut capex spending considerably.
Western countries are all now relying on government borrowing to recapitalize their financial system. The equity capital that they create is genuine, I think. It is just shifting debt from one part of the economy to another. In the end, how could their governments pay off their debts?
I think that the west is moving towards an Inflationary Solution. As debts shift to governments and central banks keep pumping money, inflation will happen. It will inflate away their debts. That is essentially robbing the countries that have earned trade surpluses over the past decades and have kept their foreign exchange reserves in western government papers. Watch out for the biggest robbery in history.
I wrote ten years ago that globalization meant wage pressure in the West. A reduction of living standard for the middle or under class in the west was necessary. This pressure was hidden by borrowing to support their living standard. The property-cum-credit-cum-derivative bubble happened because there was this need to hide the truth.
As the bubble bursts, we need to face the balance sheet consequences like who would suffer the losses, how the financial institutions can be recapitalized, and how the household sector could save to repair its balance sheet. After all is said and done, the West still needs to face the reality that that the living standard for most of its population needs to decline. Their relative competitiveness against people in China and India cannot justify their living standard.
The political resistance to reduction in living standard will lead to inflation, I think. Western governments will pile up more and more debts to sustain unrealistic living standard. Their payment problems lead to monetary expansion and inflation.
I am still bullish on gold and energy, bearish on growth and leverage. The rate cuts are starting a bounce of growth and leverage assets. It is a selling opportunity.
译文
世界各主要央行联合减息企图产生最大的心理效应。但我认为这个影响确实只存在于心理层面。市场可能很快上演一个重大的反弹。因为如果这轮减息力度不够，还不足以形成一个反弹的话，各央行的后续措施就会跟进，他们的目标就是股价。短期内，他们会成功的。
但 是，央行根治不了危机。全球经济的硬着陆就在我们眼前上演。理由当然是信用紧缩。信用体系不起作用了，因为在所有构成西方经济体的要素里，股权资本是不足 的。家庭消费者，至少欧洲人靠借钱造成了房产的泡沫。现在，房价正在下跌，他们必须借助杠杆去阻止破产，而不会借更多的钱去维持原有的消费。
西 方金融机构持有的金融衍生品靠存在泡沫的房价的支撑。房产泡沫的破裂摧垮了他们的资金基础。西方政府通过股份扩展或者是买入膨胀下的高价位有害资产向他们 注资。这个过程目前正在进行中。但是除非消费者重新获得股本金，并足以弥补他们在房价下所跌造成的损失，否则他们是不会从银行借钱的，甚至是他们想借，银 行也不会借钱给他们去弥补亏空。
西方的商业部门所受影响最少，但是他们也不会借钱去投资，在此消费萎靡的时候。除此之外，另外的一个商业 部门却受到较高影响，那就是私募资金的融资买卖。这些高杠杆作用的商业部门易于受到经济低迷的影响。我认为融资买入部门的主要危机很快会来临。它将消减相 当大的一部分消费。
西方国家现在全部在依靠政府的注资来调整他们的财务系统。我认为他们造成股票资产上升的作用是真实存在的。但它也仅仅是把债务从经济的一个部门转移到另外一个。问题是，到最后政府怎么去偿还他们所有的债务呢？
我 想西方国家是在走向通货膨胀的解决之路。当债务转移给政府之后，央行就不停地印钱，于是通货膨胀就发生了。债务会被冲走。本质上来说他们是在抢夺这些国家 的财富，而这些国家即那些在过去几十年里靠贸易赚取顺差并以国外的有价证券持有其外汇储备的国家。提防历史上最大的强盗。
我在十年前曾写过全球化即意味着西方国家面临工资压力。西方国家的中低家庭的生活水平的下降是必须的。这种压力隐藏于他们靠借贷来维持他们的生活水平。正是需要财产连带信用及衍生出来的泡沫危机的发生来揭开真相。
当 泡沫破裂时，我们需要面对资产负债表的结果，例如谁将遭受损失，金融机构怎么对其资产做出调整，家庭部门如何节约以便恢复其资产负债。无论如何，西方国家 总要面对这样的事实，那就是对大多数民众而言，生活水平必须下降。他们和中国及印度的相对竞争力不足以维持他们现在的生活水平。
我认为从政治上对生活水平下降的抗力只会导致通胀。西方政府将积累越来越多的债务来维持不现实的生活水平。他们的偿付问题只会导致货币扩展和通胀。
我仍然看好黄金和能源，对增长和杠杆作用不太看好。消减利率会带来增长和杠杆资产的一个反弹，这是一个卖空的机会。
But, central banks cannot cure the problem. A hard landing of the global economy is unfolding before our very eyes. The reason is, of course, credit contraction. The credit system doesn't function because there isn't enough equity capital in all components of the western economy. Households, at least Anglo-Saxon bit, have borrowed against inflated house values. Now, property prices are falling. They have to de-lever to stave off bankruptcies, let alone borrowing more to sustain consumption.
Western financial institutions have warehoused credit derivatives backed by inflated house values. The bursting of the property bubble has destroyed their capital base. Western governments are injecting capital into them through share expansion or buying toxic assets at inflated prices. This process is under way. But, unless households have restored their equity capital, by increasing savings sufficient enough to offset house value decline, they cannot borrow from banks. Even if they want to, banks cannot lend to them for lack of collaterals.
The western business sector is least levered. But, they won't borrow and invest when the consumer sector is comatose. Besides, a significant part of the business sector is highly levered. Private equity funds have spent trillions of dollars on leveraged buyouts ('LBOs'). These highly leveraged businesses are vulnerable to an economic downturn. A major crisis in the LBO sector is coming soon, I think. It will cut capex spending considerably.
Western countries are all now relying on government borrowing to recapitalize their financial system. The equity capital that they create is genuine, I think. It is just shifting debt from one part of the economy to another. In the end, how could their governments pay off their debts?
I think that the west is moving towards an Inflationary Solution. As debts shift to governments and central banks keep pumping money, inflation will happen. It will inflate away their debts. That is essentially robbing the countries that have earned trade surpluses over the past decades and have kept their foreign exchange reserves in western government papers. Watch out for the biggest robbery in history.
I wrote ten years ago that globalization meant wage pressure in the West. A reduction of living standard for the middle or under class in the west was necessary. This pressure was hidden by borrowing to support their living standard. The property-cum-credit-cum-derivative bubble happened because there was this need to hide the truth.
As the bubble bursts, we need to face the balance sheet consequences like who would suffer the losses, how the financial institutions can be recapitalized, and how the household sector could save to repair its balance sheet. After all is said and done, the West still needs to face the reality that that the living standard for most of its population needs to decline. Their relative competitiveness against people in China and India cannot justify their living standard.
The political resistance to reduction in living standard will lead to inflation, I think. Western governments will pile up more and more debts to sustain unrealistic living standard. Their payment problems lead to monetary expansion and inflation.
I am still bullish on gold and energy, bearish on growth and leverage. The rate cuts are starting a bounce of growth and leverage assets. It is a selling opportunity.
译文
世界各主要央行联合减息企图产生最大的心理效应。但我认为这个影响确实只存在于心理层面。市场可能很快上演一个重大的反弹。因为如果这轮减息力度不够，还不足以形成一个反弹的话，各央行的后续措施就会跟进，他们的目标就是股价。短期内，他们会成功的。
但 是，央行根治不了危机。全球经济的硬着陆就在我们眼前上演。理由当然是信用紧缩。信用体系不起作用了，因为在所有构成西方经济体的要素里，股权资本是不足 的。家庭消费者，至少欧洲人靠借钱造成了房产的泡沫。现在，房价正在下跌，他们必须借助杠杆去阻止破产，而不会借更多的钱去维持原有的消费。
西 方金融机构持有的金融衍生品靠存在泡沫的房价的支撑。房产泡沫的破裂摧垮了他们的资金基础。西方政府通过股份扩展或者是买入膨胀下的高价位有害资产向他们 注资。这个过程目前正在进行中。但是除非消费者重新获得股本金，并足以弥补他们在房价下所跌造成的损失，否则他们是不会从银行借钱的，甚至是他们想借，银 行也不会借钱给他们去弥补亏空。
西方的商业部门所受影响最少，但是他们也不会借钱去投资，在此消费萎靡的时候。除此之外，另外的一个商业 部门却受到较高影响，那就是私募资金的融资买卖。这些高杠杆作用的商业部门易于受到经济低迷的影响。我认为融资买入部门的主要危机很快会来临。它将消减相 当大的一部分消费。
西方国家现在全部在依靠政府的注资来调整他们的财务系统。我认为他们造成股票资产上升的作用是真实存在的。但它也仅仅是把债务从经济的一个部门转移到另外一个。问题是，到最后政府怎么去偿还他们所有的债务呢？
我 想西方国家是在走向通货膨胀的解决之路。当债务转移给政府之后，央行就不停地印钱，于是通货膨胀就发生了。债务会被冲走。本质上来说他们是在抢夺这些国家 的财富，而这些国家即那些在过去几十年里靠贸易赚取顺差并以国外的有价证券持有其外汇储备的国家。提防历史上最大的强盗。
我在十年前曾写过全球化即意味着西方国家面临工资压力。西方国家的中低家庭的生活水平的下降是必须的。这种压力隐藏于他们靠借贷来维持他们的生活水平。正是需要财产连带信用及衍生出来的泡沫危机的发生来揭开真相。
当 泡沫破裂时，我们需要面对资产负债表的结果，例如谁将遭受损失，金融机构怎么对其资产做出调整，家庭部门如何节约以便恢复其资产负债。无论如何，西方国家 总要面对这样的事实，那就是对大多数民众而言，生活水平必须下降。他们和中国及印度的相对竞争力不足以维持他们现在的生活水平。
我认为从政治上对生活水平下降的抗力只会导致通胀。西方政府将积累越来越多的债务来维持不现实的生活水平。他们的偿付问题只会导致货币扩展和通胀。
我仍然看好黄金和能源，对增长和杠杆作用不太看好。消减利率会带来增长和杠杆资产的一个反弹，这是一个卖空的机会。
