Beijing time, at 2:00 am on September 19, 2024, after nearly four years of interest rate hikes, the Federal Reserve announced a 50 basis point rate cut.

This news shocked the world, and people around the globe celebrated with song and dance, eagerly welcoming the long-awaited economic spring.

However, will the economic spring truly arrive with the Federal Reserve's rate cut?

I dare not give a direct answer here, as I fear it might be too much to bear.

Essentially, the Federal Reserve's rate cut signifies that the United States has conceded, halting its plan to reap global benefits, which is good news for all countries around the world.

After all, without the pressure of the United States' reaping, all countries can focus entirely on improving their own economic conditions.

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However, the world is currently in an economic state where the demand of the poor is extremely asymmetrical to the demand of the rich.

As long as this state cannot be broken, the global economy cannot welcome spring.

Here, the demand of the poor refers to the collective consumption volume of the poor group, and the demand of the rich also refers to the collective consumption volume of the rich group.

In economic activities, as long as the collective consumption volume of the poor group is consistent with the collective consumption volume of the poor group, social wealth can maintain equal flow between the poor and the rich.

This equal flow of wealth can keep the social economy in the most active state.

Because in this state, the rich will invest money desperately to meet their own needs, and such investment will allow the poor to consume without hesitation when they can easily earn money.

Therefore, it is clear that this convection of social wealth will create a prosperous economic situation.

However, the rich now do not follow the rules of the game, only making money and not consuming, thus forming the current distorted economic state of the world.

On the Internet, I always hear people praising the two American stock gods, Buffett and Munger, saying that they have made so much money, but still live in the same house for decades, very simple.

For this, I can only say that there should be fewer rich people like them in the world, because their existence is not beneficial to the development of the world economy.

You must know that the total wealth of the world is equal to the total amount of demand that the world satisfies for many years, and the growth part of the world's total wealth is the part that the world needs to satisfy the new demand.

In other words, how much wealth there is in the world depends on how much demand in the world is satisfied.

Once the demand satisfied in the world is zero, then the wealth of the world is also equivalent to zero.

It is very clear that whether wealth exists depends on whether transactions will be generated.

Objectively speaking, the more transactions, the more the total value of wealth in the world.

However, one thing must be stated, transactions will only produce wealth numbers, but wealth numbers are not equal to real wealth.

For example, I have a mooncake, I bought it from A, but A did not eat it, he sold it to B, B took the mooncake and did not eat it and sold it to C. In the era of credit money, to meet the demand for transactions, money will increase, so such transactions will create a large number of wealth numbers.

However, the real mooncake is only one, so these wealth numbers have a lot of water.

Real wealth should be, A has to eat a mooncake every day, he works hard every day to earn money to buy that mooncake, this money is the wealth that is really born.

That is, the value produced by the long-term balance of input and consumption is the effective wealth in the world, and other numbers are bubbles that dilute real wealth.

In today's world, the poor work like cattle and horses every day to exchange for three meals a day, creating real wealth numbers for the world.

What are the rich doing?

They are saving food and clothing, reducing expenses, and taking the money saved to do arbitrage transactions, creating a large number of data that dilute the real wealth of the world every day.

So, a very magical scene appears, the total wealth of the world is constantly increasing, but everyone's life is getting more and more difficult.

This is the predicament that the world is facing now.

If this situation is not changed, no matter how much the Federal Reserve cuts interest rates, no matter how much the world releases water, everyone should not have too much hope for the future global economy.

To be blunt, if the Federal Reserve does not cut interest rates, everyone will only understand the difficulties in the economy as the reason for the Federal Reserve's interest rate hike.

In this situation, although everyone lives a difficult life, at least there is hope in the heart, after all, no matter how much the Federal Reserve raises interest rates, it is impossible to go on forever, and one day he will cut interest rates.

Now it's good, the Federal Reserve has cut interest rates.

Suppose after the Federal Reserve cuts interest rates, if the economic prosperity that people expected does not appear, and the difficult days do not change much, then it won't be long before everyone's heart will be broken.

At that time, what the world will welcome is not spring, but a very severe winter.

The current world wants to reverse the economic situation, in fact, it is not to cut interest rates and release water, but to find a way to change the current world's consumption structure, enhance the consumption desire of the rich, achieve the consumption scale of the poor group and the rich group to be equal, and let the world's wealth always flow between the two groups.

Only in this way can the world's future economy enter spring.