經濟,財務,統計學,數理科學與政治評論

Dear American people:

  It is time to review all those policies of Quantitative Easing (QE) and their consequences. It should be remembered that, from today's perspective, the only successful QE happens in the United States. Partly sucess in Red China. A big failure in Japan. Remain to be seen succeed or not in the Euro zone. Let's drill those facts and their consequences.

Red China

  Red China once takes the 2007-2008 financial crisis originated from the US as a chance to dominate the world. That is the reason why Red China launches its first large-scale quantitative easing with its jumbo infrastructure plan, including super-highway, super-speedy railroads, big dams, a lot of fancy airports and ghost towns. Red China becomes the only dominate player for international commodity markets. With the help of US-QEs, Red China creates the boom and later bust commodity cycle from 2004 to 2013. The story ends with tragic 400 of BDI number lately (January, 2016), representing the world shipping and trade between nations and areas.

  It is obvious that Red China wants to expand and replace the role of the US, especially in the time of US collapse in 2008. According to the number before the end of 2014, The deposit savings in Red China is around 101 trillion RMBs. If all those RMB could be converted into the US dollar in terms of 6.5 RMB per US dollar, we expect Red China needs foreign exchange reserve around 15.5 trillion US dollars (due to 101/6.5 = 15.54). Now Red China has 3.2 trillion foreign exchange reserve in terms of US dollar(January, 2016). The 15.5 trillion of US dollar foreign exchange reserve is behind imagination. It is the reason why people before 2015 all expect the falling path of RMB exchange rate in terms of US dollar is inevitable. But Red China could not do that because of their endless expansion plan. Big construction plan goes on. Their connections with rest of world, Middle Asian nations and African nations are all included, still on the play. We couldn't see the end of story of Red China QEs with many construction plans. Red China still wants to have its Red China dream as they wish.

  The consequence is hard to say. Red China seems to forget the reason why their story once had been thought to be great is not due to Red China-QEs but the US-QEs. The Fed gives its big hand to Red China for expansion and those booming stories of commodity-related emerging markets. All the story has its end, even though we have no clue how the story of Red China-QEs will be. But the world domination dream doesn't materialize as the boom-and-bust cycle happens all the time. We, as a human with feet on the ground, couldn't resist the gravity. Even the Fed has to follow the business cycle with proper monetary policy, so does Red China. No one could against the God's will because we are only human. We should fear of God all the time.

The United States of America

  The US QE plans, once are regarded as the worst plan on the planet, seems to play well behind thought. With proper economic reasonings and free market mechanism, the US QEs seems to be the only successful plan compared with other QEs. Structural changes happen in the US with largely profitable service corporates emerging. In the US, manufacturing jobs are repalced with high-tech service jobs with more AI and less muscle. The market discipline obeyed by American corporations get the QE job done as resources focus on profitable areas. It the the backbone of US-QEs suceess story. The QEs should accompany with free market mechanism. The greedy seems to prevail this time as people chase revenue and leave loss behind.

The Euro area

  The Euro-QE is still going on with no end. But the structural change issue remains to be unresolved. It may not succeed as people expect because social welfare is too good to be true. The regime changes from many elections all the time when people just want no austerity but expansion brings even more troubles to the QE implementation. But the vault of government is empty. So the Euro area needs more QEs to satisfy those needs. Structural change is unavoidable. Mobility of resources, including human resource and others, remains a big issue in the euro area.

Japan

  Japan's QEs have grown and moved on and on more than two decades. It tries to stop the falling property price in the frist place. But the property price still falls in two decades until lately. The property price finally stops its falling with the latest Abe round of Japan-QE. The level of government debt is hugh and unbelievable. 90 percent of all those government debts are in the hand of Japanese banking sector. We do not know how the story ends. Lately, we see the negative interest rate policy launched to against the appreciation of Japanese Yen. Japan's QEs do bring lower unemployment rate, but those ones are with too many part-time or dispatched jobs in Japan. People do consider the Japannese QEs as a big failure not to be followed by others.

what's next

  We do see the euro QE may not bring down the currency value of Euro. We don't expect a negative interest rate policy may bring down Japanese Yen in a persistent time. Japan and many euro-area countries are with large foreign exchange reserves. Currency depreciation is not sustainable because of QEs only. Structure and social welfare changes are needed. The brainstorming and good governance are also necessary.

  TUS reconnection with emerging markets from the US may be more powerful than the Red China-QE to the world. We know the US corporation may choose to be a buyer of goods manufactured in emerging markets. In the period of strong dollar, it means those goods are much cheaper. It may bring more profit to US corporations.

  Red China still goes on with its own track which seems to be parallel with no crossing in the world. We do not know the destiny of Red China QEs. But we do know that everything has its limit and its end.