On Friday, President Joe Biden presented a $6 trillion budget, which, once passed, will be no less powerful than this year’s.
It seems that the U.S. government has not inhibited the will to release water in the slightest, this way of quenching thirst has been used to addiction.
Once the news came out, U.S. stocks rose sharply. In addition, the precious metals market is also quietly starting, in my opinion a very important indicator is the movement of gold.
In this big release, gold began a major correction after hitting a record high of nearly $2,100 last August, falling as low as below $1,700 in March of this year. A voice emerged in the investment market that gold had lost its safe-haven and anti-inflation properties, and that cryptocurrencies such as Bitcoin were quietly taking over. But since March, gold has been slowly rising again, and in the recent past this rise has begun to accelerate.
If we combine this with the reaction of U.S. stocks, we can see that this indicates that money in all markets is starting to see a fact that I’m afraid is becoming increasingly difficult to refute: that the U.S. government’s lending can’t be stopped, I’m afraid.
Recently the Federal Reserve officials had put out different voices on different occasions, which once made the market speculate whether the current loose policy will change? But combined with the new budget proposed by the U.S. President and his direct naming on more and more occasions to compete with China in infrastructure, scientific research, manufacturing industry for strong investment, I think I’m afraid that overall, it is difficult to change the loose policy in the short term; even if there is really a change, it may be at best a tightening of monetary policy, but fiscal policy continues to be loose, and the effect of the two superimposed is still loose.
Since the easing, the dollar is bound to continue to find a variety of investment channels.
I don’t know if you have noticed two recent trends, one is that the exchange rate of the yuan against the dollar is continuing to move higher, and the other is that A shares have quietly stood at 3600 points.
As of the time of writing, the dollar has come to 6.37 against the yuan, to which a number of people believe that this is a hedging strategy ——- launched by the state in order to counter the dollar printing money to let the yuan appreciate. On the one hand, to protect our country from being cut leeks, on the other hand, the inflationary pressure will be transferred back to the United States. Because at this moment, only our country in the world can well control the epidemic and ensure the normal operation of the manufacturing industry, which is the capital of the continued appreciation of the RMB.
The continued appreciation of the yuan in my opinion, in addition to this reason above, there is an important reason: that is, foreign capital is also flooding the domestic market in search of investment targets. The most obvious is that the A-shares have quietly stood on the 3600 point, after the A-shares stood on the high point of the current round of the market in February this year, 3731 points, began all the way down, and hovered between 3300 and 3400 points for nearly 3 months, and then in the near future began to accelerate up to stand on the 3600 point.
Foreign investors are increasing their positions in A-shares substantially.
So regardless of the recent trends in a number of markets, including U.S. stocks, gold, the yuan, and A-shares, I think the market is starting quietly across the board to start responding to a new round of water releases. Although everyone knows that this watering down game is unsustainable and will lead to disaster, until the game is over, everyone can only do what they can to find the underlying in each market to protect their assets.
Then again with digital currencies, I think it’s even more unlikely that they will be absent from this game. Even the U.S. stock market, which is a serious bubble, has been flooded so hard, how can digital currencies be spared by capital?
The problem now is not at all whether the market has a bubble, but the near-zero cost of capital has to do everything possible to find a way out, thirsty for returns.
I am more than convinced that the second half is starting for digital currencies. But will it come that quickly? I think not necessarily, from the gold and A-share trend this year, these two markets started after nearly 3 months or more of bottoming out before the current upswing, so I’m afraid that the digital currency market will also need some time to digest the early sentiment before it will lighten up and show its majesty again.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/biden-submits-6-trillion-money-spreading-plan-the-market-is-quietly-starting/
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