🌐 Has China's monetary policy changed? The market speculates that the QE era is coming!
After the release of the US CPI inflation report last week, the price of Bitcoin quickly soared by more than 9% from a low of less than $59,000, breaking through the $64,500 mark at one point. Market analysts began to speculate that China may be about to launch a new round of quantitative easing (QE) policies, that is, stimulating the economy by increasing the money supply.
Then let's take a look at the fiscal strategy announced by the Ministry of Finance of China earlier today, which shows that China may be about to enter a QE cycle, which is still the first among the major economies in the world.
At the same time, as the world's second largest economy, China's monetary policy changes will undoubtedly have a profound impact on global financial markets. In particular, if the Chinese government begins to implement QE policies, this may be seen as good news because it may dilute the value of the RMB and cause it to depreciate.
We know that in the historical development cycle, any country will cause the value of its currency to decline when it prints a large amount of money and dilutes its own currency. This is also one of the main reasons for the continuous depreciation of currency value and inflation in the past few decades.
However, as the Chinese government may begin to implement quantitative easing (QE) policies, the market also predicts that the US government may follow suit in the first or second quarter of 2025 and enter a QE cycle. If the two major economies of China and the United States relax monetary policy at the same time, it may cause asset prices to continue to rise and inflation problems may persist.
In this case, converting cash into assets such as gold, silver, stocks, bonds, or cryptocurrencies such as Bitcoin may be an effective way to protect your wealth from inflation.
If individual investors fail to grasp this trend in time and continue to hold a large amount of cash, they may face the risk of a significant depreciation of their assets. Therefore, it is important for investors to pay close attention to changes in global monetary policy and adopt appropriate investment strategies to protect and increase their wealth.
