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$1.9 trillion: Joe Biden may be forcing you to buy ingredients. The rally in bulk raw materials will continue

$1.9 trillion: Joe Biden may be forcing you to buy ingredients. The rally in bulk raw materials will continue

2021-03-05

Seriously, it may not be an upstream salesman who is forcing you to buy raw materials, it may be Biden!

The US is pumping out $1.9 trillion, and the world is paying for it!

On Saturday afternoon, the U.S. House of Representatives passed the first major piece of legislation proposed by President Joe Biden, the $1.9 trillion COVID-19 bill, the third major economic stimulus package passed since last year's COVID-19.

The US House of Representatives voted in favor of a new $1.9 trillion economic rescue package early on February 27, local time, CCTV News reported. Under the legislative process, the bill will be voted on in the Senate this week.

The $1.9 trillion new economic relief package, proposed by U.S. President Joe Biden, aims to provide financial support to families and businesses affected by COVID-19. It includes $1,400 in direct payments to eligible Americans and $400 a week in unemployment benefits for eligible unemployed people.

The bailout bill passed by the House of Representatives includes:

1. A $1,400 check for the vast majority of Americans. The US government has sent out two previous rounds of relief cheques for $1,200 and $600 each.

2. Unemployment benefits of $400 a week will be extended until August 29.

3. Expand the Child Support Tax Credit, which the IRS will pay out child benefits of up to $3,600 per child.

4. $350 billion to shore up the finances of state, county and other local governments.

5. Raise the minimum hourly wage from $7.25 to $15.

US $1.9 trillion, equivalent to about 12.3 trillion RMB, what concept?

Hong Kong's deposit balance in the local and foreign currencies was 12.2 trillion yuan last November. To put it simply, this huge allocation by the United States is equivalent to emptied Hong Kong's money and using it to help the United States.

The excess dollar will push up commodity prices and send world prices soaring. From the size of the central bank's balance sheet at the beginning of 2020, $4.14 trillion. To $7.33 trillion today, it printed $3.2 trillion, equivalent to 44% of the current Fed balance sheet, all bought in the past year; Measured by M2, the broad measure of money supply has grown from US $15.3 trillion at the beginning of 2020 to US $19.2 trillion today, which is equivalent to one-fifth of all US dollars in the world's history being printed this year.


With all this dollar printing, the heck is there to be no inflation in the US! As inflation rises in the US, China may also experience "imported inflation".

Open the sluice to release water, bulk raw materials into madness!

If monetary easing, the first to bear the brunt of the bulk of raw materials! Affected by "supply shortage" factor, copper, iron, aluminum, plastic and other raw materials prices continue to rise; As the world's major refineries shut down, chemical feedstocks soared almost across the board... The influence industry involves furniture, home appliances, electronics, textiles, tires and so on! Since the Spring Festival, the world's major markets almost did not rise!

Take the textile industry as an example: as the main raw materials of textile chemical fiber PTA, ethylene glycol, naturally also help fuel, hard to pull up. Driven by the futures market, as well as polyester raw material manufacturers, dealers bullish, polyester raw material prices have overturned the past years of our cognition. PTA from the beginning of 2019 3118 points all the way up to the present nearly 5000 points, ethylene glycol more crazy, from the beginning of 2019 2926 points up to the current 6300 points near, to tell the truth, the rise not only let polyester factory panic, even polyester raw material enterprises are confused. Remember back in 2019, everyone was talking about the bottom of polyester prices, only to know the horror of the peak in just one year.

Polyester raw materials such as this, the natural made of chemical fiber prices are also climbing. In the past polyester factory price adjustment is at most 100-200 yuan range, but also to remind the implementation of the buffer time; At present, it is directly the notice of the range of more than 500 yuan, and the price is raised several times on the same day and implemented immediately, especially half a month after the Spring Festival, whether it is POY or DTY, etc., coupled with the economic guidance after the recovery of the epidemic, the price of polyester keeps rising, which can be said that "the good wind will send me to Qingyun". In the memory of Xiaobian, the current polyester after the Spring Festival price rise is almost unprecedented, the unit price per ton of more than 1000 yuan, this is indeed a history. And many analyses suggest that the odds will remain high this year. Other chemical fiber products, especially in the imbalance between supply and demand of production capacity, elastic fiber demand under the promotion of spandex, the price is absolutely "cattle".

And from the perspective of the industry chain, as the downstream textile enterprises should be the most painful, because they can only "survive in the crevice", how to say?

On the one hand, the price of raw materials is rising rapidly. At this time, we should not only consider the inventory plan, but also implement the price transfer. The further the problem industry chain increases the price pressure, the cost caused by the price can only passively bear a part, but also face the problem of raw materials shortage. At the heart of all these problems is the flow of money, and if there is just a big deviation in price spread and inventory management, it is very easy to cause an otherwise healthy business to have serious and irreversible problems.

In a word, when the bulk raw materials are rising wildly, it is not completely profitable. In fact, how to resist inflation has been an economic issue that has been under global consideration for so many years. No matter investment or financial management, there is no one that can "beat" inflation with 100% certainty.

But at the same time, inflation is not as terrible as you imagine. Don't invest casually without knowing the situation. Once the risk comes, you will lose money, and not only the currency will depreciate. From a macro point of view, the most important is to identify the trend, reduce unnecessary detours and toss. As each link of the chemical fiber industry chain, we need to look at the right time, seize the current market policy direction, and will be able to overcome all kinds of problems!


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