Economic issues

Maybe I haven’t written for almost two months, so I’ll write something.

I just saw a news that Shanghai is preparing to normalize nucleic acid in September at its own expense.

There are also some consequential things such as the nucleic acid testing agency’s account not being settled, the air conditioner failure and the like.

In addition, Shenzhen and other places have also started to repeat recently.

It may also be a headache to think about the next policy.

Expenses reflect financial expenditures.

Earlier, medical insurance has already transferred the expenditure items to the accounts of local governments.

And this move in Shanghai.

Regardless of whether the source is reliable or not.

At least in terms of attitude, this kind of continuous expenditure is not very recognized.

It may also reflect the continuation of the degree of cooperation in the epidemic prevention policy since March.

But aside from this regional issue, from the perspective of public opinion, the frequency of fatigue is more and more frequent.

Of course, part of it may also be manipulated.

But at least a considerable number of people are dissatisfied.

Including some time ago in the community group, I also saw that there was a replacement for nucleic acid.

Therefore, in terms of compliance, there is not much room to continue the high-pressure policy.

In particular, the direct economic trauma caused by the shutdown of several economically developed regions this year, as well as the recent deposit problems, and the problem of three-party funds in real estate, are all group risks.

Moreover, the economic problem is a national general problem, and cannot be solved in a special way in a single place.

So basically, this may be a challenge point for stability maintenance in the past ten years.

Or maybe some kind of critical turning point.

Especially considering the possibility of a change of office.

So how will the follow-up epidemic prevention policy go, or how can it go?

Zeroing out the previous costs may just be some mobilization and primary economic costs.

To put it bluntly, it may still belong to a stage where the able man will conquer the sky,

Although the cost is high, it is still affordable.

However, the subsequent clearing, from the perspective of public opinion and finance, is almost a situation of powerlessness.

Continuing with the original idea may work, but it will not solve the problem.

Similar to throwing a charge capability into a massive machine gun strafing.

Big, tragic, and possibly necessary, but basically unlikely to have a good outcome.

But the bad results that are not zero have not changed.

It’s just that at the moment, it can be just the pretext for one more mass incident.

Therefore, from a more general perspective of maintaining stability, how to prevent the epidemic is no longer a key issue.

The main risk of the epidemic getting out of control/spread is the direct doctor-patient conflict caused by the increase in the number of medical treatment/cases, the fluctuation of the work cycle caused by repeated infection and transmission, and the conflict of interests of enterprises, and some ethical conflicts derived from special poor families.

Conflict risks that basically fall into the category of social relations.

Looking at it individually, it is not a new problem.

But the problem is that this is an undifferentiated chain of results.

Others, such as deposits and loan resistance/bankruptcy, are economic issues.

It’s still a matter of income.

The simple macro solution is job retention.

But at the micro level, it’s hard to say.

The direct reason for the bad economic trend this year is the shutdown of several economic regions mentioned earlier.

But even if you don’t stop swinging, the results may not make much difference.

It might just be a little bit delayed.

After all, in addition to the physical impact of Covid-19, more importantly, it directly interrupted the industrial chain of globalization.

For a high-speed joint system, once it stops, the cost and cycle of restarting will be very long.

It’s like a factory assembly line.

The production/survival willingness of an industrial chain node will ripple up and down.

And once this kind of negative feedback spreads, it cannot be solved and restored by the active action of a single or a few nodes.

After all, as a chain node, even if you are willing to disregard the cost, in reality, you have to consider whether the downstream is willing to accept it, or whether there is a demand.

And whether the upstream is willing to accompany the supply.

The absence of either party is a prisoner’s dilemma.

In layman’s terms, confidence is more important than gold.

And more generally, Covid has only accelerated this disintegration.

So in terms of causality, today’s situation is inevitable.

So what are the specific starting points for economic problems?

Until there is a sudden shift in confidence, a top-down planned economy may be an institutional advantage.

After all, at least from the design point of view, if the chain is long enough, then the coverage has a certain fixed expected guarantee.

From a dynamic system perspective, there is at least the possibility of some kind of tipping that can gradually generate new positive feedback/confidence.

What this requires is fiscal spending and corresponding easing policies.

But the problem is that there are not many countries that can relax now.

When talking about inflation in the United States some time ago, there was a saying that inflation in the United States is not price-related.

Or it’s not entirely price related.

The angle of this view is that although inflation is reflected in the form of price factors, when the investment aspect is considered, it may be the other direction.

Because of the general expectation of withdrawal, all investment aspects, even if they are not conservative, will be more inclined to some low-risk/good liquidity targets from the perspective of risk hedging.

In a broad sense, cash is the most liquid asset.

So from this point of view, it may be the form of assets that are easily liquidated into which the original large-scale investment has been transferred.

And the purchases these conversions represent actually drive up the price factor.

After all, from the perspective of pure supply and demand, demand has skyrocketed.

So from this point of view, raising interest rates may be a means that is not suitable but has to be done.

To say that it is not suitable is the expectation of deepening withdrawal, and funds will seek relatively safe targets more quickly.

On the one hand, the purpose of raising interest rates may be to centrally transfer risks and link them to relatively non-default or to go to the bottom of sovereign debt as a form of risk containment and digestion.

On the other hand, it may be at least an effort to deleverage and de-risk.

So from these two aspects, not raising interest rates is because the spread of this risk is uncontrollable.

And this is tantamount to giving up treatment under the expectation of regression.

Therefore, for a considerable number of countries, contraction is the only option.

Then for countries where easing is a possible way out, the ideological trade friction at this time may instead be a kind of firewall-like existence.

Replacement transfers to avoid risks.

But according to this defensive line of thinking, the choice of trading partners in the international environment becomes a little more delicate.

Because in terms of purpose, domestic easing may be reflected in international investment flows.

Incidentally, will this investment become a replacement, and more importantly, will it produce a positive chain effect in the country.

This is also a considerable degree of risk behavior in a period of continuous debt default/credit crisis/social unrest in developing countries.

If you think so, it may be a more reasonable choice for a conservative domestic cycle.

Even the output should be the traditional foreign trade surplus type output.

If this economical approach close to the last resort can be effective.

The remaining possibility is how to convert the social relationship risk of epidemic prevention into economic risk.

And this may be the most mature or the easiest to think of is insurance.

Whether it is doctor-patient, labor or ethics, if there is corresponding insurance/subsidy coverage, it may not be a big problem.

So in the end it’s an economic issue.