Commerce Department does not oppose the revaluation

When the question about home prices decline in domestic oil prices is now time to let go of the issue. On the domestic real estate prices, I summarized: "Oil prices converge, prices plummeted." High oil prices crush the American economy the original operation mode, set off the subprime crisis, the European Union in the "Kyoto Protocol" of the constraints in advance to adapt to the challenges of high oil prices, so the overall economy maintained a healthy run. The Chinese economy is difficult to adapt to high oil prices, which is why a quarter of the country since the most serious in Guangdong downtown Shortage falling house prices causes the most fierce.
I recently was preparing diverted, leaving the stock market to real estate development. This is not because I see an empty market, not because I like real estate, but I think at this moment in China's real estate industry more than the Chinese market need for innovative financial instruments to resolve the years accumulated a huge risk. I did not think that most people have heard of my decision, first of all ask me the question: "Rockwell, when the house will fall?" And they do not want to hear my long winded,the right to equal access to education for girls, but I just hope real estate prices and the forecast turned into a simple, understand the words, "like you used to say when forecasting inflation in the stock market bull market did not straightforward." I understand that my friends are all around the quick success of the Christians, for the beauty of Finance or the government framework and the theory of complex regulations and policies are not too concerned about. So, I intend to answer their most concern. I am the domestic real estate prices
judge summarized as: "price convergence, price collapse."
Here I need to review my comments on real estate related, in order to prevent themselves guilty of economists often inconsistent committed an error. October 2004, Bank of China for the first time interest rates, I wrote: "interest rates will effectively boost real estate prices." At that time mainstream economists view was that: interest rates will increase the marginal cost of real estate investment, thereby reducing its marginal revenue. Interest rates shortly after a rapid rise in house prices trend, the fact that I am right. Since then every central bank's interest rate has approached me to talk about price, I be any "interest rates pushed up house prices" answer. I always think: only when the yuan against a basket of currencies would cause prices to fall, in addition to any other policies only allow the Government to increase taxes, or to state-owned commercial banks to increase interest income.
Since the RMB exchange rate reform, I have not seen a situation of falling house prices, mainly due to the steady appreciation of the RMB against the U.S. dollar while the U.S. dollar against all major currencies to maintain a rapid devaluation of the yuan's real effective exchange rate led to only did not appreciate, has also been devalued. The newly appointed Minister of Commerce has made it clear that the position of the Ministry of Commerce: Commerce Department does not oppose the revaluation, but opposed to the rapid appreciation of the yuan. Thus, we can determine, after the revaluation of falling house prices predicted the basic premise does not hold.
in my opinion, money is like a ruler, to measure housing prices, if the ruler reduced (depreciated), then prices will rise accordingly; If ruler stretched the (appreciated), then the room the corresponding price drop. I still adhere to this conclusion. However, recently a friend pointed out that my analysis flawed. U.S. house prices have fallen sharply, while the dollar also depreciated. According to my theory above, there should be the U.S. dollar rising domestic price situation. I must have done a comprehensive analysis, to answer his friends carefully.
first term situation in the U.S. since 2001, the dollar depreciation into the channel. During the U.S. housing market is really on a prosperous scene, chasing the mind has led to a large number of middle-income families to enter real estate investment loans, at the beginning, everything seemed all so perfect, so to meet the specifications of Finance: When a currency's depreciation when interest rates higher than the national debt, inflation pressures emerged in the country. However, the good time, oil prices smashed the U.S. real estate boom, leading to subprime crisis.
2002, the international oil price is about 25 dollars a barrel levels. Are all dependent on the United States in the economic operation of low oil prices, first of all, consumers spend on gasoline only in times of low prices of its personal income of a relatively small the ratio; Second, business investment expansion Deyi cheaply. In other words, in the era of low oil prices, the United States to continue the existing economic model to go on without the need for large-scale technological revolution, the labor productivity of existing and sustain growth. However, hedge funds have not agreed to this model. They implemented a dual strategy to do more hedging transactions: long while Dow and oil. Their logic is: if oil prices fall, the U.S. economy will boom, the Dow Jones stock will rise, the increase of the absolute value should be greater than the decline in oil prices; if oil prices rose, the Dow Jones on behalf of the United States the most competitive and most able to overcome high oil prices, production patterns, the decline should be less than the absolute increase in oil prices. This should be a can not lose the hedge trading strategy (profit depends on the specific transaction between the Dow and oil hedge ratio).
the results we have seen, the Dow Jones despite a slight drop of oil but never less than 30 U.S. dollars a barrel, up over 100 U.S. dollars a barrel. Routed the U.S. economy, high oil prices, original operating mode, leading to low-income families in real disposable revenue, decreased ability to repay mortgage loans; other economic units in the United States can not be overcome by raising labor productivity high oil prices, their return on investment rate of decline in capital expenditure. Interaction between the two has led to falling house prices and the subprime U.S. occurrence. I may raise is the first independent oil prices and supply and demand, and the Middle East were not related. In early 2004 I accepted the "Xinmin Weekly" interview,christian louboutin pumps discount, said: oil behind the Curtain is a hedge fund.
reader may ask why Europe has not been the impact of high oil prices do? We should see that automatic implementation of European Union carbon dioxide emission reduction obligations under the so-called nearly 10 years, the result is within the region's economic performance had to continue to adjust, to reduce emissions and reducing energy consumption-focused, which is why the oil price rising phase, the euro's rise, the European Union to maintain a healthy overall economic performance, the EU's economy in the "Kyoto Protocol" of the constraints in advance to adapt to the challenges of high oil prices.
look back on our own circumstances, the RMB and the U.S. dollar remains stable long-term trend has not changed, the gradual reform of RMB exchange rate can not be broken the principle of the yuan next in a long time will still be maintained against the U.S. dollar against other devaluation of the currency trend. So, if you want to trigger a price decline, we should see when opening up the State Development and Reform Commission finished oil to align it with international standards. I believe that today's Chinese economy, but also like the United States, dependent on low oil prices. Low oil prices will contribute to the domestic automobile production and consumption, domestic logistics costs will remain low proportion of total sales. I am not sure that we let go after the oil price, China's economy will be the same as the EU automatically adapt to high oil prices. At the same time, we can immediately understand why since the first quarter, the more obvious areas of falling house prices is precisely the trouble Shortage country the most serious in Guangdong. The traditional supply and demand and the cost of capital and other economic theory can not explain this phenomenon.
Some people say we can not release oil prices, because oil prices have been too high. I'm sure that overseas hedge funds does not think so, they will not meet the existing spoils. I remember the oil prices, when 26 U.S. dollars a barrel, there have been proposals to implement the fuel tax reform, the result was rejected by the Government on the grounds that high oil prices can not be successfully implemented, should we instead be implemented yet? Years, we continue to wait and see when the drop in oil prices, oil speculation hedge funds had put a 100 dollars. I suspect that oil prices will not go back waiting for us. Long oil has defeated the United States hedge funds, may be looking for the next target.
the price drop when the problem when oil prices are now open to domestic issues. I believe that the State Council Development and Reform Commission will not release oil prices, Petroleum and Sinopec also in a difficult period of time, to high-priced imported oil, low in the domestic sale of petrol. The reason is simple, if crude oil at 26 U.S. dollars a barrel when the NDRC willing to open up oil prices, now nearly 126 U.S. dollars a barrel when oil price Development and Reform Commission also can not open a. Of course, China's oil reserves are limited, not enough to maintain our domestic consumption of 10 years (count increment consumption part), it is difficult always to suppress prices. And international hedge funds who will not easily let go of the oil bull, let the hands of the trillions of dollars to buy more oil. They may have to do high oil prices, oil prices up until the release of China.
If our present oil prices and international standards, the result is the domestic real estate prices plummeted. Because based on our current economic efficiency and resulting high prices will be based on complete loss. We can not see the other one well-known economists from the domestic scene is described: after rising oil prices, boosted housing prices continue to rise, because raw material prices is in general inflation, while inflation will rise for house prices . If that's the case, we use the same logic can come inflation, stock prices should be skyrocketing during the wrong conclusions. No question about inflation bull market I have in the "Shanghai Securities News" 7 times the author to be demonstrated, not repeat them here.
Data show that the U.S. subprime losses alone in the United States financial institutions and causing a loss of about 400 billion U.S. dollars. I have roughly measured the three major U.S. oil giant's known oil reserves at this stage to increase the value of nearly 400 billion U.S. dollars. This may be a coincidence, high oil prices will not let us up all the wealth in general, or the human wealth of the process is too simple, no need of technical progress. U.S. sub-prime mortgage losses, the value of oil reserves may be slightly larger than the increase in the value of total U.S. wealth may not undergo major changes, changing only the owner of wealth. Here, I remember Comrade Lenin's words: all the revolution is redistributing wealth. In the era of high oil prices, the redistribution of wealth quietly under way.