In the past 10 years, housing prices in major cities in China (such as Beijing, Shanghai, etc.) have risen more than 200%, and the market market has risen by more than 500%. From the horizontal comparison, the per capita income level of residents in Beijing, Shanghai and other cities is much lower than that of Tokyo and South Korea in Japan, but the current house prices in Beijing and Shanghai are already higher than Tokyo and Seoul.
For investors, the bubble is not terrible, and there is no chance to get rich quickly without asset prices. When will the hub of the question break the asset price bubble? Why break? According to the author's opinion, it is difficult to guess the time of the rupture of the asset price bubble, but the reason for the clear bubble rupture can make a full estimate of the burst of the bubble. Take a look at Japan first.
In September 1985, the Fifth National Treasury Secretary of the United States and Japan signed a "square agreement" with the governor of the central bank. The yen appreciated sharply. The appreciation of the yen led to a brief decline of the Japanese economy in the fall of 1986.
To this end, the Japanese government adjusted the legal interest rate twice in November 1986 and February 1987, from the original 5 % to 2.5 % of the record. At the same time, the growth rate of broadcasters (M2 + CDS) also increased from 8 %to 12 %in 1987 to 12 %.
However, at that time, the investment rate of corporate equipment in Japan had been at a high level for several years, and excessive funds did not fully enter the production field. Instead, they promoted the rise in asset prices such as stocks and real estate. The "bubble" is getting bigger and bigger.
Large enterprises, financial institutions and even ordinary people have been involved in it. In just a few years, assets such as stocks and real estate have risen more than tripled. This process is almost the same as China after 2005, but it is only 20 years apart for 20 years.
Later, the story of the Japanese real estate bubble ruptured passersby well known, but after all, what caused the hard landing in the real estate market? The hub is inflation. By the mid -1989, in order to prevent ordinary prices from rising prices, the Japanese cargo spring authorities also began to realize the severe nature of asset prices. On May 31st, the official discount rate was improved to 3.
5 %, and the end of the year was further improved to 4.25 %, At the same time, Tibetan provinces have also taken a number of measures to limit land deeds. More importantly, in August 1990, the "Gulf Crisis" broke out, and oil prices soared.
In order to prevent the rise in oil prices and cause inflation, the Japanese central bank has adopted a tightening policy to improve the official discount rate to 6%. Therefore, asset prices have begun to plumme. If the Spring Policy Authority takes timely tightening measures at the beginning of the real estate bubble expansion, it will not lead to the severe consequences in the future.
But why didn't you do this? The author thinks that there are economic and political reasons. According to traditional economic theory, the ultimate goal of the Central Bank is mainly to maintain the currency value and prevent inflation. Whether it is theory or in practice, the change of asset prices will not be included in the vision of the central bank monitoring.
From 1986-1988, although Japan's asset prices continued to rise, the general consumer price index was not chaotic at a level of 1 %. Therefore, the central bank mistakenly judged the situation by mistake. Similar topics also exist in the United States.
After 2004, when the price of real estate in the United States rose rapidly, facing the market's questioning of real estate bubbles, Greens Pan thought that "the proper judgment of the asset price bubble cannot be made in advance". Almost all the great economies have been tripped on the "stone" of real estate. The Latin American nations 30 years ago, Japan 20 years ago, and the Asian "Four Little Dragons" 10 years ago.
The financial regulatory rail system is perfect in the United States. A few years ago, similar mistakes also made similar mistakes. The deep reason should be not only theoretically, but also politically.
Under the democratic track system, votes are crucial to politicians. There is no doubt that if measures are taken to suppress asset prices, it will definitely cause your own votes. Because, whether it is stocks or real estate, it involves a wide range of aspects, which affects almost all levels above the middle class.
Any policy that leads to the decline in asset prices is "unpopular". Even like the Fed's operating mechanism, it seems to be independent in form, but it is not true. For example, in his autobiography "Our New World", Greenpan specifically described the Federal Reserve's behavior when the US stock market was "irrational" in 1996.
If our reason to raise interest rates is that we want to control the stock market, which will trigger a political storm. We have been charged with hurting retail investors to destroy everyone's retirement plan. We can imagine that I will be bombarded in the next night to hold a hearing in Congress.
". However, if the inflation trend, the tightening policy of cargo spring will immediately start. Because inflation will be self -enhanced, once malignant inflation is generalized, politics will not be chaotic.
The social crisis brought by inflation is far from asset price bubbles. Most social publicities will be damaged due to the rise in consumer prices, especially the livelihood of the people at the bottom of the society will be greatly impacted. There seems to be a strong correlation between asset prices and consumer prices.
In the process of the expansion of the asset price bubble, the price is at a low level, and when the price of the asset continues to swell to a high level, the price begins to rise. In other words, when the price starts to swell, the asset price bubble is already in a dangerous state. Therefore, at this time, the tightening measures of cargo spring will definitely pierce the asset price bubble.
During the Japanese asset price bubble period that occurred in the late 1980s, the consumption prices of Japanese residents were not chaotic. When the price of assets had risen for several years, Japan's consumer prices rose in 1989; from 2001 to 2004, the United States implemented low interest rates and the United States implemented low interest rates and the United States implemented low interest rates and and the United States implemented low interest rates and the United States implemented low interest rates and the United States implemented low interest rates and the United States implemented low interest rates and and the United States implemented low interest rates. As a result, when the real estate price bubble, the phenomenon of consumer prices is not chaotic, but the prices in the United States have risen in four years; from 2003 to 2007, China's house prices soared sharply, but consumer prices are also basically not chaotic.
After 2007, prices began to climb. The conduction logic is worthy of our true analysis. What stage is China's asset price bubble? According to my opinion, as early as 2007, it was already at its peak, and the asset price bubbles had begun to be transmitted to the field of consumer prices.
Because of the need to control inflation, at that time, my country has adopted a tightening springs policy and led to the breakdown of the asset price bubble. The stock market price was vented from more than 6,000 points. However, due to the influence of the global financial crisis, the process of breaking the bubble rupture was interrupted.
Under the stimulation of loose goods spring policies at the end of 2008, in 2009 and 2010 real estate bubble inheritance expanded. But it should be noted that by the second half of 2010, the shadow of inflation will be shrouded in us again. We will once again face the dangerous moment of the asset price bubble rupture.
Although the CPI announced in mid -February is not as high as market expectations, the current pressure of rising prices is great. The world's grain prices and cotton prices have risen more than 50%in the past few months, and they are still rising; migrant workers' migrant workers have been underwent in various places. More importantly, with the expansion of the negative deposit interest rate, the impulse of residents to turn the goods into the asset of the property is strengthening.
These are the strong motivation to promote rising prices. However, if inflation is discharged out of control, the goods spring must be tightened, and the asset price will suffer.