China's Blade Strikes Deep into the Heart of the Dollar! Where is the Bull Market Headed?
according to新华社10月31日日报道,朝藓发言人证实朝藓试射了洲际弹道导弹。金正恩现场表示,此次发射活动向近来故意加剧地区紧张局势、威胁朝藓安全的对手明确表示朝藓的应对意志****,No threat to national security shall be tolerated.
Following the global uproar caused by North Korea's dispatch of troops to Russia, the news of an intercontinental ballistic missile test has once again shocked the world. Behind this seemingly ordinary test lies a complex global geopolitical game and financial warfare. This article will provide a comprehensive and in-depth analysis of its rich internal logic and profound significant impact.
【ICBM Test Demonstrates Power】****
血饮在10月17日号发布的The Battle Behind the Conflict on the Korean Peninsula: The Struggle of Chinese and American Fortunes一文中明确提出,对于美国在朝藓半岛挑起事端,中俄最好的应对就是由朝藓进行导弹核试验。朝藓的导弹试射这不仅可以打击美元指数,还可以拉升短期美债收益率,让美国陷入金融困局。
Now, North Korea has finally taken this step as scheduled.
So, why did the United States suddenly stir up trouble on the Korean Peninsula at this particular time?
The world is bustling with people coming and going, all for the sake of profit. One of the most important reasons the United States stirs up trouble on the Korean Peninsula is to create tension in East Asia and intercept international capital flowing into China.
Because, just before the DPRK's nuclear test, the US bond market received more bad news. As international capital anticipates further interest rate cuts by the US, they began to sell US Treasury bonds, causing the expected yield on the ten-year US Treasury note to rise above %. How serious is this situation?
Previously, the ten-year U.S. Treasury yield continued to decline under the expectation of high interest rate hikes, eventually surpassing the yield of the year-term Treasury, until the inversion was resolved.
The yield on the ten-year U.S. Treasury bond is continuously rising. If the selling pressure increases, the yield on the ten-year Treasury bond will also surge along with the selling of longer-term bonds, leading to an inversion around the % mark. If this inversion persists for several months, around the first quarter of 2024, the U.S. will likely experience another financial "helium flash," similar to the stock market crash in September 2019.
The reason why the current financial risk in the United States is considered more severe is that this inversion is significantly different from the one in the year and month mentioned. Specifically, the inversion in the year was at a relatively low level of -%, while this time it is at a high level above %, making it more difficult for the United States to resolve. If China and Russia intervene again, the inversion could be pushed to around %, signaling the imminent end of the U.S. financial system.
The doomsday theory is not alarmist. This is because, the phenomenon of inverted yield curves indicates that US Treasury bonds, even at high interest rates, are still unsold. This signifies that the Federal Reserve is paying high interest rates while facing a liquidity crisis in the bond market due to lack of buyers. In such a situation, the Federal Reserve is caught in a dilemma, whether it chooses to raise or lower interest rates.
If interest rates continue to be cut, the amount of long-term U.S. Treasury bonds sold will increase, and the inversion will arrive more quickly; if interest rates are raised, the interest paid in the short term will be greater, and the pressure on the Federal Reserve and banks will surge. In the face of this dilemma, the United States has another option: to stop the current balance sheet reduction and resume expanding the balance sheet by purchasing U.S. Treasury bonds. However, once the balance sheet is expanded, it will completely reverse the current trend of global capital inflows into the United States, and both the U.S. dollar and overseas capital will flood into China as liquidity is released.
Faced with such a predicament, the Federal Reserve has reached the point of having exhausted all options and can only choose to pause rate cuts and maintain interest rates at a neutral level.
To achieve this goal, in the realm of financial data, it is necessary to defy market expectations of interest rate cuts. Therefore, this has led to the following two eye-catching news stories.
一个新闻是,号美国公布的月份小非农数据超市场预期两倍达到.万人。这一数据的出现,是基于美联储的迫切需要,因为,只有美国的经济数据突然变得很好了,美联储才有停止降息的“科学"依据。
Another news is that Jeremy Siegel, a prominent Wall Street figure, publicly stated at the Federal Reserve meeting in September that the Fed may halt rate cuts. To halt rate cuts, the Fed needs to maintain a neutral interest rate, which it has further increased to around 5.5%. This way, the United States can maintain a significant interest rate differential with China while China cuts its rates to around 3.5%.
The basic logic behind the Fed's actions is this: as long as the high interest rate differential exists, the capital that previously fled from China will not return to China.
由此可见,美联储为了阻止国际资本进入中国,可谓是煞费苦心,也从反面证明了血饮之前文章"What Impact Does the Federal Reserve's Interest Rate Cut Have on China?"说过的结论—美联储降息是重大战略失误,被对手抓住机会发起迅猛反击,直接导致中国几近被清空的血条一夜之间再次充满。
Now, the Federal Reserve regrets its decision to cut interest rates and is even considering halting rate cuts in an attempt to maintain high interest rates.
Additionally, the United States continues to suppress oil prices. If Trump were to be elected as the President of the United States, he would undoubtedly join forces with Saudi allies to drive down oil prices. At that time, the U.S. would once again deploy the strategic combination of "high interest rates + low oil prices," aiming a heavy blow at the soft underbelly of China's economy, its manufacturing sector.
【Missiles Launch to Break Hegemony】****
就中俄阵营来说,Intensive missile launches are the first step in openly demonstrating deterrence.****
As mentioned above, the DPRK's intercontinental ballistic missile test was preceded by a series of launches by the Russian military. On the same day before the DPRK's test, the Russian Defense Ministry announced that the Russian military had launched "Yars," "Sarmat," and "Bulava" intercontinental ballistic missiles from the Plesetsk Cosmodrome, the nuclear submarine "Prince Oleg" in the Sea of Okhotsk, and the nuclear submarine "Novomoskovsk" in the Barents Sea, respectively.
Meanwhile, according to a report on the 15th, Iran is planning to launch a missile strike against Israel before the US presidential election on the 3rd, in retaliation for Israel's missile attack on the Shahrud Space Center, located approximately 100 kilometers northeast of Tehran, on the night of the 15th.
On the date specified, China conducted a test launch of the Dongfeng intercontinental ballistic missile into the eastern Pacific. As of now, China, Russia, North Korea, and Iran have each launched or are preparing to launch missiles to target and deter the United States-led NATO's key allies in Europe and Asia, including countries like Japan, South Korea, and others.
This is one of the rare instances of intense strategic deterrence launched by China and Russia against the US-EU camp in recent years! It is also a powerful counterattack by the China-Russia camp against the United States' urgent desire to regain battlefield initiative in both the Middle East and East Asia.
In this counterattack, Iran and North Korea are at the forefront, with Iran bearing the greatest cost, which indirectly indicates that the Middle East is the most closely watched by the United States and is a key area of intense confrontation between the two sides.
Here, it is emphasized that the nature of Israel's attacks on Iran is fundamentally a manifestation of Zionism's tendency to bully the weak and fear the strong. Why is this said?
Israel dispatched multiple fighter jets, but none dared to enter Iranian airspace; all merely launched long-range standoff missiles from within Iraqi territory to attack targets inside Iran.
The primary reason Israel sent fighter jets to attack is that its Jericho missiles, with the longest range, only have a range of kilometers, making them incapable of reaching Iran.
So, why do Israeli fighter jets only dare to launch attacks from outside the defense zone?
Because, earlier this year, Russia provided Iran with the "Murmansk-" long-range communication jamming system, which has been installed at various locations within Iran. This system is specifically designed to disrupt NATO and U.S. high-frequency military satellite communications, with a single unit covering an area exceeding 10,000 square kilometers. Three units can cover the entire territory of Iran, primarily deployed in the western part of the country.
In this attack, Israeli fighter jets crossed Jordanian and Iraqi airspace, and without the support of systems including US high-frequency military satellites, it would have been impossible to launch standoff missiles from abroad into Iran. Therefore, this attack constitutes an aggression against Iran's sovereignty under the intelligence support of the US military, and Israeli fighter jets dare not enter Iranian airspace because they fear losing communication and never returning.
Israel has a third reason for using fighter jets for long-range attacks: Iran has established a Beidou navigation station and a ground-based air defense command system, among other military intelligence and command systems, with Chinese support, which is directly connected to Beijing. The air defense combat system, which was put into operation annually, is a system centered on the China-Air Defense Command and Control System, provided by China Tech.
Iran's counterattack operation this time is a conventional operation supported by Chinese and Russian technology. In contrast, Israel's air strikes on Iran's military actions are similar to previous strikes where Israeli aircraft launched standoff missiles after covertly ascending from the Bekaa Valley to target Syrian government forces near Damascus. This is also reminiscent of the strikes carried out by the UK and the US on Syria. In these actions, even Syria managed to intercept most of the missiles, let alone Iran, which now has even stronger support from China and Russia. The live video reports from our official media have demonstrated to the world the high efficiency of its anti-missile interception rate.
On the same day as the Iranian operation, Israel also launched strikes against Syria, but all of its standoff missiles were intercepted. Clearly, this was due to the efforts of the Russian Pantsir and internal air defense systems stationed in the region. Additionally, the Russian Aerospace Forces resumed heavy bombing in the Idlib region of northwestern Syria. This is what Xueyin mentioned in previous articles, indicating that Russia has begun to adjust its strategic focus and is gradually returning to the Syrian battlefield.
The effectiveness of Israeli airstrikes on Iran underscores the impotence and weakness of its strategic counterattacks, and also illustrates that the Jews are only capable of using despicable and shameless assassination tactics. When it comes to confronting head-on with real weapons, they immediately fall silent, resorting to advance notifications and long-range attacks, only to return to bullying the weak and venting their anger through the genocide of Palestinians. Such dark and underhanded methods are a fitting match for their millennia-long experience of wandering, a self-inflicted consequence!
At the same time, it is also hoped that Iran will maintain a high degree of strategic clarity this time. Prior to this, after Israel initiated its retaliation, Iran did not take further countermeasures. Iran believed that the United States and Israel would secure a ceasefire in Gaza in exchange for Israel avoiding attacks, only to be met with even more brutal assassinations by Israel targeting Iranian, Hezbollah, and Hamas leaders.
Facts have proven that the Jews are the most shameless and untrustworthy group in the world. These beasts understand only the language of the fist, and when it comes to attacking the moral high ground of sovereign nations, this is truly a once-in-a-lifetime opportunity. Therefore, if Iran chooses not to retaliate after Israel's airstrike, it will inevitably face even more brutal and savage hunts from Israel against the Shiite militias, including Hamas, Iran, and Lebanon, in their most proficient domain.
Additionally, the collective missile launches by China, Russia, North Korea, and Iran have supported oil prices financially. Following Israel's airstrikes on Iran, international oil prices plummeted by %, falling below the fiscal survival lines of Iran and Russia, and also sounding the alarm for deflation in China's manufacturing and financial systems. Now, Iran and North Korea's missile strikes directly targeting the U.S. military's regional allies Israel, Japan, and South Korea can directly boost oil prices, stabilizing the economic fundamentals of the China-Russia alliance. It also prevents the Federal Reserve from finding a new weapon to further depress oil prices and freeze the economies of China and Russia, beyond its actions of raising or lowering interest rates.
Iran's Fatah hypersonic missile that pierces Israel's deployment of THAAD anti-missile system
** 【The BRICS Currency Strikes Like Thunder】**
BRICS Pay and the BRICS currency are the second major strategic counterattack launched recently by the China-Russia camp.****
On the date indicated, the BRICS summit, led by China and Russia, was held in Kazan, Russia, with the participation of 11 countries including the President of Turkey. This marks the first time since the Industrial Revolution that a coalition with significant economic and demographic advantages has emerged without the involvement or dominance of Western nations. The most significant outcome of this summit was the pursuit of establishing a digital currency payment platform for BRICS countries, with the potential for the future introduction of a BRICS currency.
First, let's take a look at this payment platform, which poses a significant challenge to the existing payment systems in the United States. The payment system is a traditional centralized dollar payment system, while the biggest advantage of digital currency is decentralization.
The digital currency payment platform proposed by Putin is intended to dismantle the U.S. dollar payment system.
The United States previously threatened China with the payment system, vowing to exclude China from it. Now, the BRICS payment system is China's best response.
Because digital currencies use blockchain technology and employ distributed ledger systems, everyone has a copy of the ledger. To alter the ledger, one would need computing power exceeding that of all countries combined, which is fundamentally impossible in the face of China, which boasts the world's second-largest computing power and the most extensive industrial manufacturing data.
Also because blockchain technology is used, all currency transactions are recorded publicly and fairly. This avoids the exploitation of the dollar's seigniorage.
Due to the previous practice of tying oil settlements to the US dollar, countries had to hold US dollars to import essential industrial goods such as crude oil. Over time, international trade inevitably required the use of US dollars for settlement. Now, with the advent of digital currency payment platforms, oil-producing countries led by Saudi Arabia and the United Arab Emirates within the Gulf Cooperation Council have joined this system. Consequently, trade settlements between other countries can now utilize digital currency payment systems to settle in their respective national currencies. This bypasses the US dollar, thereby avoiding the significant fluctuations in dollar supply caused by the Federal Reserve's interest rate hikes and cuts, effectively cutting off the financial exploitation of countries by Jewish capital through the use of US dollars.
In a scenario where all countries use their own currencies for settlement, China can produce most industrial products, while Russia, the United Arab Emirates, and Saudi Arabia possess vast reserves of oil and natural gas. Other countries have large populations. Thus, almost all commodities in international trade can be purchased on this platform.
Once a country faces a deficit and insufficient payment capacity, it can borrow from countries with large trade surpluses like China, Russia, and Saudi Arabia, or expand the scale of local currency settlements. Countries with surpluses, such as China, can directly invest in the other country using the latter's local currency. The cooperation mechanism established on this payment model is conducive to promoting financial stability among member countries and alleviating international payment crises.
For surplus countries like Saudi Arabia, it is more convenient to invest in China directly using their own currency or the Chinese yuan, and the distributed ledger is immune to U.S. sanctions and tampering. This directly eliminates the need for dollar settlement. When the dollar is no longer used as a medium of exchange, the financial colonial tax resulting from its monetary policy causing currency value fluctuations between peaks and troughs will also disappear.
At the same time, this system is fair. Everyone settles in their own currency, and in this situation, the competition is based on whose products are more popular and whose products are more cost-effective. This is why India opposes the platform. Because India's industrial competitiveness is extremely poor, after importing cheap crude oil from Russia and paying Russia in large amounts of rupees, Russia could not obtain the industrial products it urgently needed from India, only from China. Therefore, Russia directly shipped the crude oil to China for sale, and the reason lies here.
India is a very cunning country. Once the BRICS digital platform is launched, the Indian rupee will undoubtedly become worthless garbage. Russia can directly sell crude oil to China through this platform, leaving India with no profit to be made. India gains nothing from either side and will naturally oppose this platform.
Xueyin believes that the establishment and operation of this platform should follow the principle of majority rule. China and Russia can go ahead and do it without India, first setting up the platform's structure. If India is unwilling to join, let it stay out! There's no need to accommodate it on this point. Once the platform gains momentum, whether India joins or not will no longer be up to it.
The digital currency platform proposed by China and Russia in Kazan is a disruption to the US dollar, which also reveals the underlying reasons behind the following two significant events.
The first is the comprehensive easing of border tensions between India and China.
China and Russia are leveraging platforms like BRICS to present a balanced situation against the United States. At the Kazan meeting, Russia once again emphasized Sino-Russian collaboration, making India, which has been playing a balancing act between Russia and the West, feel uneasy. Putin's statement of standing with China in the same pants has forced India to improve its relationship with China in order to strengthen ties with Russia and, when convenient, use its relationship with Russia to counterbalance the West. This is the successful fruit of Sino-Russian strategic cooperation in improving Sino-Indian relations, and also an inevitable result of China's growing strength.
The second event is a terrorist attack that occurred within Turkey.
On a certain date, a factory belonging to Turkish Aerospace Industries in the capital Ankara was attacked by terrorists. Several armed terrorists opened fire and threw explosive devices in the factory premises, resulting in the death of people and injuries to others. This terrorist attack is a warning to Turkish President Erdogan by Kurdish terrorists supported by the United States and Israel.
Turkey is a member of NATO, and its geographical location is not only a key country for China's Belt and Road Initiative but also the intermediate nation for Iran's access to Europe and Russia's southward route to the Indian Ocean. Turkey serves as the geographical hub of the Sino-Russian-Turkish-Iranian quadrilateral alliance. Erdogan's joy was evident as he attended the Kazan meeting this time.
For Erdogan, Turkey's economy and investments have faced comprehensive sanctions from the United States, and geopolitically, relations have almost soured with NATO allies like the UK, the US, and France over the Gaza issue. Now, the payment platform launched by the BRICS countries has come just in time to pull Erdogan back from the brink of economic collapse. Unlike other countries, Erdogan secured a renminbi swap line from China early on. It is precisely by using the renminbi as the settlement currency that Turkey has managed to withstand the economic downturn in recent years. Otherwise, with the Turkish lira having depreciated by more than a dozen times, Turkey's economy would have already collapsed.
Erdogan had previously made it clear that he wanted to join the Belt and Road Initiative and the China-Pakistan Economic Corridor. Now, he is eager to join the BRICS, and as Turkey, already an informal member of the SCO, takes a few more steps towards China and Russia, it will become a real enemy of NATO. Thus, a terrorist attack occurred at the right moment.
This terrorist attack is a wake-up call for Erdogan from the United States, warning him on the first day of the Kazan conference to distance himself from China and Russia, or the next target won't be a factory, but his home. However, to put it bluntly, the United States and Israel have attempted to assassinate Erdogan several times already, so this warning can be seen as a tired tactic with little effect.
While the BRICS digital platform combats dollar payments, the concept of BRICS currencies is also emerging, which will deal an even greater blow to the United States.
Unlike the Asian Currency concept, the BRICS currency strongly supported by Putin, at this stage, is somewhat similar to the International Monetary Fund's Special Drawing Rights. That is, based on the strength of the BRICS currencies, the shares of the BRICS currency are allocated among the member countries. For example, the Chinese Yuan, due to the necessity of industrial goods, could account for a certain percentage, while the remaining shares could be equally divided among the other countries.
With trade surpluses, countries can freely convert them into various currencies. For example, if Saudi Arabia wants to invest in Russia, it can convert to rubles. Meanwhile, countries with trade surpluses can invest their funds in the BRICS Bank. If there is an urgent need to invest in India, they can take out a loan from the BRICS Bank, repaying it later in the local currency of other member countries, such as the Chinese yuan. If no other countries are willing to accept the Indian rupee, India can only apply to China and other member countries to expand the scale of currency swaps. This way, the Chinese yuan can enter the Indian central bank's reserves openly and legitimately, which will greatly promote the internationalization of the yuan.
A more significant role is that the BRICS currency will provide the RMB with a broader strategic depth. For example, during the stock market crash in the US, the Federal Reserve was prepared to replace the dollar with the International Monetary Fund's currency, which amounted to using the Western economic alliance to bail out the US. Similarly, a BRICS currency, once China and other countries face major crises, can be activated to replace their local currencies, thereby binding the currencies of other countries with China in a life-and-death alliance. This not only helps to weather the crisis but also forms an alliance with the currencies of other countries, which is a classic case of the Communist Party of China's mass line being flexibly applied in modern financial warfare.
From a broader perspective, the currencies of BRICS countries can also serve as a tool for China to shift its debt. In [specific month], when the United States initiated unlimited quantitative easing, it expanded the scale of currency swaps with six major central banks, including the UK, Australia, and South Korea, successfully converting the debt generated by money printing into foreign currencies. Subsequently, the US dollar strengthened, while the Korean won and the euro weakened. The United States alone reaped more than % profit from currency swaps, not to mention the additional gains from other countries using dollars to purchase US assets. This method of binding the entire alliance through currency swaps has demonstrated its effectiveness. Currently, Japan, South Korea, the UK, and Australia, which are the most loyal dogs in the US's containment strategy against China, serve as the best counterexamples.****
Similarly, when China faces a crisis, we can transfer the crisis to the BRICS countries, which are the largest global economy. After we recover, we can then provide assistance to them, thus achieving deep integration and the essence of a shared destiny.
Putin said that currently, many countries are lining up to join BRICS. The more countries join, the more China's ironclad allies there will be. Previously, China had already turned Brazil into an ironclad little brother. In the future, we will gain more allies. China is not the United States, but the alliance path China is taking will definitely leave the United States with no way out!
In essence, the BRICS payment system and the currencies of BRICS countries not only weaken the flow of the US dollar in international trade but also directly eliminate the seigniorage of the US dollar. This move is equivalent to a "black tiger掏心" for the United States. If global trade is conducted through a system centered on BRICS countries, the velocity of the US dollar will also decrease, and the de-dollarization will dismantle the technological centrality of the US dollar.
Once the US dollar system is shattered, the US military power, American media hegemony, and the global political system supported by external financial resources will all collapse due to a shortage of dollars, leading to a fatal disaster for the Jewish financial colonialists.
China's counterattack is precise and powerful, like a sharp knife piercing the heart of the dollar, and the Jews naturally will not sit idly by.
American hospitals will resume mask mandates and mandatory COVID-19 testing in waiting rooms and main campuses on the designated date. Meanwhile, the number of dengue fever cases in Guangzhou, China, is increasing. In light of previous outbreaks of monkeypox, West Nile virus, hemorrhagic fever, and other viruses, we cannot rule out the possibility that the United States may release a new virus after the November elections. After all, during the U.S. presidential election in November 2020, the United States released the novel coronavirus in Wuhan a year in advance, which then spread across China and the rest of the world. This is a precedent.
Here, Xueyin reminds everyone to take personal precautions this winter, wear masks properly, and protect the health of the elderly and children.
****强国不靠意淫!The enemy's counterattack is frenzied, and this war is protracted; we cannot be overly optimistic, nor should we be excessively pessimistic. As the People's Liberation Army of China has stated, we must not follow so-called experts in fabricating false news, speculating and sensationalizing, consuming the patriotic sentiments of the masses, and concocting military rumors such as "our naval vessels sinking four foreign warships" or "12-hour electronic warfare in the South China Sea" and other fallacies of swift victory. At the same time, we must also resist the false news concocted by foreign media that aims to undermine the confidence of the Chinese nation.
The article concludes by addressing the recent stock market, which has garnered significant attention from the public.
【Stock Market Advice】****
In the previous paid article about the stock market, Xueyin mentioned three time points for exiting the market: the 1st, the 10th, and the 20th of the month. As of now, the first two exit points have passed, and new investors should decisively withdraw from the stock market.
Here, Xueyin once again emphasizes that the latest withdrawal time is on the 20th. Truly bold and meticulous individuals can challenge the 21st, but it is not recommended to confront the subsequent great power game with one's own weak strength. After securing gains, recuperate and wait for the right moment to strike again, why not? The stock market remains, opportunities still exist, no need to rush.
Due to the large number of readers, the diverse levels of understanding, and the varying degrees of experience, Xueyin's suggested exit time is based on the safest period for beginners, which may not necessarily be the most profitable. A careful review will reveal that the previously mentioned exit dates—the day of the month and the day of the week—were on a Sunday, with significant gains on the day of the month and continued gains on the day of the month, followed by a period of decline and adjustment. The stock market is full of high risks and turbulent waves; it's best to take profits when you can!
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