Comment on the crisis

On current situation, the US government will buy (bail out) more. To do that, it needs to borrow more too. But the interesting thing is, the Treasury bill interest rate is down below 1%. How can it be like so, so cheap for US to borrow?

I think it is just because too much money runs out from the stock market and company bonds market, which is inherent becoming more risk. Compare to them, the Treasury bill seems more safe and more attractive, even its return is small. But the difficulty is how to control inflation which is worse and coming. And transfer of investment makes the return smaller. The investors need more time for searching the safer and higher return market. Where could it be?

China, or India? No, I don't think so. India is in troubles already. China is going down too. The short of liquidity of foreign financial institutes is driving their investment out. The Chinese stock market lost more than 60% since last October, and is still going down. Withdraw from it is like a suicide. But the house price is till on the high level. It's good time to cash out. With this impact, the Chinese house price will likely be pushed down to the half, in the future months.

Considering the real estate contributes to about one third of the GDP growth, the economy outlook is dark. But the good thing is, China government is the richest government in the world. It will use fiscal policy to keep the economy from hard landing. I think this kind of policy will be established after the Communist Party meeting and the government meeting in March. Of course, the control of inflation is always important.