United States General elections on hold "fiscal cliff" problem became urgent after the aobamachenggong for a second term, has entered the countdown. Democratic Republican party "fiscal cliff" debate will continue until December, or even a longer period of time. If the two parties did not reach agreement before the end, United States Government will jump "fiscal cliff", this "jumping cliffs" will have two effects:
For one thing, before I leave all (Bush began from childhood) of a variety of tax incentives, equal to the substantial tax us $ 400 billion (almost every American tax will tax increases) and was forced to cut a deficit of $ 207 billion, amounted to 607 billion dollars, representing United States GDP about 4%, meaning United States economic growth will reduce 4%. This undoubtedly had a slight improvement of United States economic poured a bucket of cold water. In other words, it seems worse, United States economic recession again immediately!
To avoid this situation, Obama invited Congress, business and labour leaders to talks. Because Obama has no need for re-election without scruples, will begin to take hard line. Most frightening predictions is, suppose Obama and members of Congress total failure of the negotiations, the two sides failed to reach an agreement prior to the January 1 next year and jump off the financial cliff.
But I think the possibility is very small, almost zero! from recent years United States analysis of situations is not difficult to see, even play with fire to the last second, United States Government into a halt State will not occur.
At the same time, United States debt, budget deficits, the Government has recorded more than $ 1 trillion for four consecutive years, the debt exceeds the GDP of 70%. United States Government short on the need to reduce budget deficits of $ 1 trillion, more need for long-term ongoing deficit reduction. Treasury Secretary Timothy Geithner said that in order to reduce the budget deficit, there is a need for the wealthiest Americans (earning more than $ 250,000) raising the personal income tax rate, as President Barack Obama "was not prepared to extend the high-income tax cuts", the key to improving the Capital Gain (capital gains) tax rates, because it is the largest of many rich sources of income. Only increase the taxes of the wealthy, to eliminate the financial risks of the cliff of reliable sources, can be true for the majority of middle-class tax cuts.
If you do not properly address this issue, or a further increase United States federal debt ceiling, that United States Treasuries have inevitably to be demoted, United States ' borrowing costs will rise, snowball of debt will snowball, will be more difficult to extricate themselves......
United States economy do? Really simple and simple, best solution increasing revenue and cutting expenditure taking place while the throttle (cuts) will rise in the unemployment rate in the short term, but short than long pain pain, to solve the problem, there must be a strong man the determination and courage of scraping the bone healing broken wrist!
However, the United States Government, this step is difficult. Now let United States Government to "cut expenditure" is unlikely, would cause steep rise in unemployment, which is incompatible with the idea of Obama; and continue to borrow (that is, start the printing presses) also appears to end unsustainable. Finally, therefore, seems to be left open--taxing the rich--this trick, only to be discussed by the two parties over how to tax the rich and increase problems.
In the four or five years because of the financial crisis, United States total "evaporates" $ 33 trillion of wealth, real estate evaporated $ 6 trillion or 7 trillion alone, 2% per cent of the wealth of the wealthy across the United States, over the past few years has increased by $ 2 trillion or 3 trillion. Apparently in addition to the evaporation of wealth (that is, the original bubble burst), are actually middle-class transfer of wealth into the pockets of the rich ... ... Do not fall into the "fiscal cliff", the poor, the middle class and the rich with tax increases, are unreasonable, and taxing the rich is reasonable.
However, the address "fiscal cliff" longer time drags on, investors and senior management the more anxiety in the market. United States stocks fell after the election, and continued depressed state, are investors watching the wind, and traders fear the political stalemate will prevail, as Washington the past two years. Enterprise Manager waiting for a clear signal, there is afraid to let go of the hands and feet big, they are more worried about not knowing how much tax would be paid in the coming years.
By the way, on November 11, Greece adopted a reduced budget, to other European "pig" example to the country; United States will also tax the rich and spending cuts ... ... Thus borrowing consumption, game play to the end of the monetary easing, deflation will be the trend in the world ... ...
After already forming in the global wave of loose monetary and currency war the first signs. Taking into account the current political cycle in several major countries are key nodes in the Web, and loose monetary policy has just launched, policy 3-6 month delay, therefore, global currency war might actually enter the most dangerous in the first half of next year. This maintains high alert, rainy days, is the rational choice of stitch.
The global economy and international financial, looks like chaos colorful, solid track to follow, because history is always kept repeating, most of the evolution of the situation following the trajectory of logical deduction. In June this year, I have taken the lead in prompting the global approach of the era of easy money V2.0, and in making this forecast at the same time, further evolution has hidden in the heart of the situation, that is the moment after the global tide of easy money had been formed, money from the fog of war. From the perspective of evolution of the latest situation, currency war V2.0 are the first signs.
When it comes to currency wars, many people refer to it as "smokeless war", although I have indicated that the definition of, it is just a game, rather than a war. But this game and the war had some similarities. From the perspective of logical deduction, war the national individual conflict of interest must continue to enlarge and irreconcilable, similarly, causes of currency wars and the global game is closely related to the distribution of benefits and rights in the field of Economics and finance. For now, current currency war is about results because:
One reason is that the global economic recovery interest V2.0 at the end of competition more intense. If the 2009 global economic recession 0.57%, is the new century under the impact of the subprime crisis (002280), the first dip in the global economy, then the global economy this year is expected to grow by 3.28%, it is under the impact of the European debt crisis of a double dip in the global economy. Double dip one hand reduces the available for global distribution of the overall benefits, on the other hand, with more differences between the recovery in global, which lead to more fierce competition for recovery benefits. Competing interests of the country for mainly through macroeconomic policies to achieve, and global policy menu is not rich this year, fiscal policy is constrained by high debt risk, monetary policy is constrained by limited policy space, importance in exchange-rate policy in the interests of more prominent. In addition, it is worth emphasizing is that this year's double dip and dip for the first time, a major difference, lack the independence of emerging market growth, and emerging market is the most significant exchange rate fluctuations, inadequate exchange rate regimes relative regional, which has greatly increased possibilities for a global currency war is more a weight.
Reason is loose global monetary V2.0 causes increased competitive devaluation. Marked by a jiekexunhuoer Central Bank Governors meeting in late August, global era of loose monetary policy V2.0 coming, OMT quantitative easing policies pursued by the ECB and fed a high profile launch QE3, Japan's Central Bank starts QE9, people's Bank of China for unconventional reverse repurchase operations, India's Central Bank cut deposit rates, global currencies had been easing, the tone of monetary easing. Loose currency policy tide from two a direction help push currency war: a is through dollars devaluation effect raised global States passive should, QE3 led to dollars devaluation, and dollars devaluation is synchronization increased has most currency, especially emerging market national currency of passive appreciation pressure, turn raised series of should type of exchange rate intervention; II is through protectionism effect raised competitive devaluation, global loose currency V2.0 led to global policy environment more more serious, in global inflation pressure rose, and international trade growth slowed background Xia, Protectionist tendencies in a growing, competitive devaluations by countries desire growing.
Three of the reasons is the world's second-best choice led to speculation of the capitalistic forces gathered strength the currency. Capital natural on has by Lee sexual, and combined current global economic and financial markets status: United States stock has recovered 2008 financial crisis outbreak yilai of all lost, financial Cliff will to background Xia future growth space limited; European stock although more early has rose, on even Greece stock also has stage rebound, but Europe debt crisis may does not completely see end of; emerging market stock, especially CSI stock always is not see signs; international bulk commodity market subject Yu weak of entity economic needs, also difficult has performance space ; In context of global inflationary pressures increased again because of the easy money, once hot bond market has become increasingly bleak; the global property market is in a slump. View the global commodities markets, stocks, bonds and real estate, the medium-term trends are uncertain, in contrast, in the global currency markets, frequent government intervention and exchange rate volatility increasing, competitive devaluation is very eye-catching, speculative forces the opportunity to zoom in relatively large amplitude, the possibility of making speculative gains. Speculative forces may be involved in, as well as currency war explosive planted, sowed.
Of course, many jump up flames, does not mean that the currency war broke out. Multilateral communication and policy collaboration within the context of international efforts is to inhibit the important role of collective irrationality. But given the current political cycle in several major countries are key nodes in the Web, and loose monetary policy has just launched, 3-6 month policy delays, so for some time to come, especially the first half of next year a global currency war might actually enter the most dangerous period. This maintains high alert, rainy days, is the rational choice of stitch.
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