"Feng Yu, why hasn't the news you mentioned come out yet?" Fu Guangzheng was a little anxious.
Feng Yu said with certainty that crude oil prices will definitely rise this time, not only because Iran will definitely reduce crude oil production, but also because Feng Yu analyzed that the Federal Reserve will cut interest rates again.
It seems that the Fed's interest rate cut has nothing to do with the rise in crude oil, but in fact it has a lot to do with it.
If the Federal Reserve cuts interest rates, the cost of using the U.S. dollar will be reduced. The U.S. dollar is the world's common reserve currency. The foreign exchange reserves of all countries in the world basically include the U.S. dollar, which makes the U.S. dollar almost as hard currency as gold.
As the world's common reserve currency, the U.S. dollar is naturally freely convertible. If the Federal Reserve cuts interest rates, many people will exchange their U.S. dollars for convertible currencies that have not cut interest rates, or for other commodities.
What situation will this create, that is, selling the U.S. dollar and causing the U.S. dollar to depreciate.
This is just like the financial crisis in Asia. The Thai baht and other currencies were constantly being sold off and devalued.
You said that the dollar has depreciated, doesn’t the United States suffer
That's not necessarily true. The U.S. dollar is not a foreign exchange reserve in the United States. Euros and yen are. And it can be seen from the several interest rate cuts in China that this is a means to stimulate currency circulation and consumption, which can very well stimulate the domestic economy.
Because at this time, the United States has already seen that their economic growth is slowing down and there are signs of recession. As the world's largest economic power, how can we watch other countries grow much faster than them? In particular, the economies of China and Russia, which they have always wanted to suppress, are growing too fast, which makes them very uneasy.
And in this way, it can also hit those countries with very large US dollar foreign exchange reserves. What is the main reason for this? The main ones are Asian countries, including China, island countries, etc., which are among the largest countries in the world in terms of U.S. dollar foreign exchange reserves.
The devaluation of the US dollar means that the wealth they have stored has depreciated and their wealth has evaporated.
This is a method that achieves multiple goals with one stone, so even though the Federal Reserve is not a political unit, it also represents the interests of the United States and the interests of investors in the United States.
If the Federal Reserve cuts interest rates and the dollar depreciates, what impact will it have on crude oil futures
Crude oil is linked to the U.S. dollar. All crude oil transactions are measured in U.S. dollars. The fluctuation of crude oil prices is also based on one cent. If it is linked, what will be the impact
That is to strengthen the value of the U.S. dollar. Crude oil is the most important energy source in the world. After being linked to the U.S. dollar, the United States can use the U.S. dollar to influence the price of crude oil to a certain extent and ensure their interests. At the same time, it can continue to expand the influence of the U.S. dollar. .
Therefore, the fluctuation of the US dollar price has a very important impact on crude oil. The depreciation of the US dollar means that a barrel of crude oil at the same price has actually depreciated, and its purchasing power has declined.
So how to ensure that the actual value of crude oil remains unchanged? It's simple, increase the price.
Crude oil originally priced at US$55/barrel has risen to US$60/barrel, and its purchasing power has remained the same.
Feng Yu originally convinced Fu Rongqi and the others that crude oil production would be reduced and the dollar would depreciate, so the price of crude oil would inevitably rise.
But the current situation is that only Iran unilaterally announced a reduction in crude oil production, and other OPEC members did not say anything. Although they did not oppose it, they did not support it.
Moreover, the Federal Reserve has not cut interest rates and the US dollar has not continued to depreciate. How can the price of crude oil rise so sharply
He Zhaoji told Soros that each company spent one billion U.S. dollars to raise crude oil prices, which was actually used to suppress the U.S. dollar. Just like when they suppressed the Thai baht, they just keep borrowing from banks and selling them at low prices.
The price difference here must be a loss.
Both parties agreed to prepare for a loss of one billion US dollars.
But this part of the loss can be recovered through the increase in crude oil prices. Moreover, the depreciation of the U.S. dollar will not have a too bad impact on the United States. They can reverse this effect at any time through the Federal Reserve raising interest rates. This is also a way for them to control the economy.
Therefore, Soros and Fengyu Consulting teamed up to suppress the US dollar, and he did not have any psychological burden. Anyway, this way, it is more in line with the interests of the United States.
In the second quarter of last year, the Federal Reserve cut interest rates, which indeed greatly stimulated the U.S. domestic economy. At that time, it also caused crude oil to rise to nearly 80 US dollars per barrel.
Then it slowly fell back to the normal level of fifty or sixty dollars, also because the Federal Reserve continued to raise interest rates.
Feng Yu firmly believes that the Federal Reserve will cut interest rates again. In fact, others do not believe it.
In less than a year, interest rates were cut again. How is this possible
Feng Yu looked at the anxious Fu Guangzheng: "Wait a minute, this news is coming soon. If Soros has not joined, we will still have doubts, but if Soros has joined, then this thing will definitely happen."
Quantum Fund’s clients include many big bankers, including the Federal Reserve Bank of the United States. Moreover, among Soros's friends, there are also executive members of the Federal Reserve, so they will definitely have information channels in this regard.
Of course, one of the executive committee members is also a friend of Ralph. As for how to make friends, I won’t mention it.
Through these people, we can know that the Federal Reserve does intend to cut interest rates again to stimulate the economy and let people spend the money in the bank.
"But how long do we have to wait?" Fu Guangzheng asked.
Feng Yu glanced at Fu Guangzheng: "Guangzheng, why are you so impatient? Although the price of crude oil has been fluctuating these days, it has also risen amidst the fluctuations. We still make a profit.
"
"But the profit is far less than investing in stocks. If we use the money to invest in stock index futures, we will definitely make more." Fu Guangzheng retorted.
Professor Liang shook his head: "Guangzheng, you can't look at things this way. Do you think it was best for us to buy stock index futures urgently before, and then wait for the news of the Federal Reserve's interest rate cut and crude oil production reduction to enter the market?"
"In that case, crude oil prices must have risen a lot, and our profit margins will be much smaller. And there is also a very important point, then we will no longer be a weather vane."
"Now that we have entered earlier, many investment institutions and hot money are staring at us and using our operations as a benchmark. In other words, we can already influence the price of crude oil to a certain extent."
"The biggest advantage is that when we short-sell in the opposite direction, we can also encourage others to follow suit. This can ensure that we get the maximum profit."
"There is an issue of initiative here, which is the most important and can also minimize our risks."
Feng Yu suddenly asked with a smile: "Guangzheng, you borrowed a lot of money, right?"
… (To be continued.)