經濟,財務,統計學,數理科學與政治評論

Dear American people:

  A lot of people lately talk about the Quantative Easing of USA. They think the goal it reaches is only pushing the asset prices of US to a higher ground. It doesn't resolve the unemployment issue. It helps less on the corporate rebirth or reorganization. To be honest, I don't have the same feeling. People talk about the lately US stock market booming and think it is just a process of stock repurchase of US corporations. It is not the real growth we will find in the USA. Unfortunately, they use their own country as the benchmark for the issue. It is a totally wrong perception. The growth of USA is based on its service industries. There are a lot of emerging economies can be used as the production bases to satisfy American people's need. A lot of productions will never go back to the USA anymore. It is the thing people have to realize. In an services-oriented society, people have to know what is the important for the society. The society has to fill the need of desire deep inside people's mind. That is the mental stuff which is based on arts, science, friction and entertainment. American movie is one of them. American novels is one of them. The style of American living is one of them. The American education is one of them. The Major League is one of them. The NBA is one of them. All those things bring higher profits to American people. All those things have some common ground which is those things use more intellectual properties and less materials to produce. Some great thoughts to manage a corporate doesn't need many commodities input. Information technology progress in the USA already incorporates a lot of foreign products with the inside of the design from American people and the software architecture by American people. Those kind of things make a big change to the world and the American society.

  People think lately the US stock market booming is based only on the repurchase of stock of US corporation. They seems to forget to ask some deep quesitons about how those corporations have those money. People think those money are coming from the cheap bonds market. Corporates issue bonds with lower rate and use those cheap credits to repurchase their stocks from the market. In finance, it is called the bondholder expropriation hypothesis. All those things seems to be right in the first glance, but it doesn't to be that way. First, Apple also repurchases a lot of their own stocks. The reason is the Apple's larger shareholder asks Apple to do so. In finance, we know there is a free cash flow hypothesis. It says if the corporate has tons of money on hands and  nowhere to go, then it should use the money as dividends paying to shareholders. Or it is a waste to shareholders. Shareholders do not like the corporate managers waste their money. We also know the tax rate of dividends paying in the USA is much higher than the tax burden of stock repurchase. So it happens that way. That is the reason why American corporations buyback their shares rather than paying the money as dividends. Those people seems not to know the corporate finance well. They may need to buy a corporate finance textbook written by Brealey or Stephen Ross and read it thoroughly. Then they will understand those actions we see lately from the US stock market is totally reasonable. Those corporations are with tons of money on hands and have no way to invest. They do not need to invest in the USA but to outsource their productions oversea to create a good supply chain and a good cycle of profit creation. Then they can have a big fortune. American people only need to sell those products in the USA and teach American people how to use those products well in a coherent way, then they can create a lot of GDP domestically. Those people who think America corporations did nothing but only repurchase their shares have some traditional merchandise manufacturing thought in their minds, but they seems to neglect about the process of GDP creation. They may be from the underdeveloped world so that they just do not comprehend all those things. The USA doesn't have that process of GDP creation anymore.

  The US-style QEs do have the goal to ease the pain of financial crisis of 2007-2008 happened in the USA. But it is not the ultimate solution for American people to resolve its economic issues. The USA needs a new social arcitecture on the wealth creation process inside America. The USA needs to know how to reinnovate its society with better technology applications and technologies for their life-style improvement, including education, entertainment, social networking and other important daily life related stuffs. The US-QEs are just the tool to ease the pain of transformation. It is not the ultimate goal. Borrow the word from the US Treasury head Jack Lew, the US-QE is only a temporary means to help the USA back on track. The original idea of US-QE created by Mr. Bernanke is not to create a lot of fortune for the wealthy people but to use it to ease the pain of market-malfunction during the crisis and try hard to make the market back on track for all American people. The US-QE is a means but not the goal. It is a means to help the USA to have a well-functioning financial market, including property market and other malfunction markets during the crisis of 2008. Now we see those markets back on track, so it is time to let the US-QE go with no reason.