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I often tell many researchers not to blindly make simple comparisons when studying the world economy. I estimate that many research reports make this mistake, often comparing with the 1970s and 80s. Such comparisons are purely for filling report word counts. From my perspective, I wouldn't even finish reading them; I'd just tear them up and throw them in the trash. I actually feel sorry for these brokerage researchers. Why? Because they have to write a report for every issue, and a report has to be tens of thousands of words. It's tough, and in the end, no one reads it.

What is top-level generational change, or what everyone often talks about as cyclical generational change? Remember one thing: top-level generational change is ideology. The development of social politics is essentially a cyclical group ideology, which is what we learned in ideological and political courses as "left" and "right," left-leaning and right-leaning, left-wing and right-wing, collective and individual. The fluctuations of these things are the biggest changes in the world economic cycle.

What is the current situation? The big leader's statement is very accurate: a great change unseen in a century (百年未有之大变局), essentially marking the end of a complete cycle from the 1929 Great Depression to post-World War II. The world has gradually developed from the extreme right after World War II to center-right, then to center-left, and finally to the extreme left over the past 20 years, ultimately leading to a resurgence of the right. This world is very interesting; no direction is absolutely correct.

I have always advised everyone not to argue online. I stand on the left, you stand on the right, PK, and must discuss who is the best, who is the most correct. There’s no need. It’s like wanting to find a girlfriend who is beautiful, tall, busty, slim, wealthy, and loves you dearly. You’re asking for too much; just pick one. Where is perfectionism? The final result is that in the process of movement, it influences politics, which in turn influences the economy, which then affects the financial market. Always remember the logic of the pyramid.

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China is also moving towards inclusiveness and integration, which is why we have had very good operations like entering the market, WTO, and reform and opening up. I often say that women in families are naturally right-wing. Right-wing has a typical characteristic: it can be called populism, nationalism, or patriotism; extreme right can be called Nazism. But the characteristics of the right are very obvious: "I am not wrong; it’s all your fault." That is the right.

Women in families inherently carry this; of course, I am not discriminating against you ladies; it’s in your DNA, carried in the two X chromosomes. If the males in the family are left-wing, the family is happy. What does that mean? "Wife, it’s okay, it’s all my fault." The male is a leftist, and the family is good, left + right.

If both the male and female are left-wing, it’s simply incredibly happy. The male comes home, and the female puts down the slippers and says, "Honey, you play games for a while; I’m cooking. I’ll call you to wash your hands and eat when it’s ready." This male really goes to play games, and after eating, says, "You take a break and watch a show; I’ll wash the dishes." You must not be a typical straight man who throws the pot and goes to play again; that won’t do. Over time, she will become right-wing.

At this point, if you also show left-wing characteristics, your family is integrated. If there are two right-wingers in the family, it’s doomed. It’s all your fault; I’m not wrong. Why should it be my fault? It’s your fault; you did wrong. Generally speaking, straight men and women don’t make good combinations. Two right-wingers lead to war, fighting until divorce.

Don’t think this is just discussing family and marriage; it’s also discussing nations and the world. When the combinations between countries all become left-wing, it’s a great historical environment for inclusiveness, integration, and global growth. When everything is right-wing, it leads to war.

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The same goes for all countries. In the 70s and 80s, the UK had anti-Chinese sentiments, and now it’s starting to be anti-Muslim again; this is normal. The world’s turmoil is not simply reflected in pure assets. A few days ago, the UK introduced a new policy: anyone who is not a British citizen, in principle, must pay inheritance tax. The UK government will also collect your inheritance tax. I previously told many wealthy people not to think about tax evasion every day. When inclusiveness and integration are present, hiding some private money is fine. But when everything becomes right-wing, hiding private money will lead to disaster. What is the world’s big trouble now? Finding a place with a low tax rate to pay what you owe. When Trump came to power, he said that as long as you were willing to bring capital back to the US, it would all be legalized at a 20% rate. Look at how much capital flowed back! So you should understand the general framework and characteristics of left and right; that’s the true essence of my book, but it was deleted.

If you understand this, you can penetrate it into the economy, interest rates, and assets; you will be clear about it. This is the essence of major asset classes, the real essence. If you ask who created this, it’s people like Soros and Benson. The overall framework is the same for everyone.

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I might send my younger son to Japan next year. I’ve made it very clear to him: I don’t need you to study artificial intelligence or AI. Why? You don’t seem that smart, and you’re not an IT guy. Just learn Japanese well; getting into a good school is enough. There are many traditional noble girls in there; just marry one. It’s best if their families are 80 or 90 years old; you’ll win by lying down. When their families pass away in the next couple of years, the house is yours, the equity is yours, the land is yours, the wealth is yours, and the savings are yours. We’ll participate in Japan’s 40-year wealth redistribution. Buffett participates with money; we participate with people. Essentially, it’s the same. You buy stocks; I marry my son off. This is all participating in wealth distribution.

You need to understand what Japan's core is. Japan's core is participation in distribution, not participation in growth. Many people don’t quite understand this because they haven’t participated in distribution domestically. They always think about where growth is happening. If I’m closer to power, resources, and capital, I’ll eat more, while those selling labor will eat less. When economic growth slows down, the lowest level will have no food to eat. Economic growth of 5 may feel completely different across various classes, which is why some people online say economic data is fabricated. Is it really fabricated? Maybe not. Five represents the overall cake, while your feeling only represents your class.

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First, after the pandemic in 2020, during the Changbai Mountain Forum, I made it very clear to everyone that I said very bluntly that the asset-liability situation of Chinese residents has problems. At that time, the brokerages were all very happy because they always need to be happy and can only go long. But for us coming from a hedge fund background, I can’t do that; if I do, I’m finished. My money is in there. After October 8, was anyone still in there? Don’t self-anesthetize; that’s nonsense. Generally speaking online, it’s okay to use such things to deceive others, but if you believe it yourself, you’re done. It’s like back then when they said, "6000 points is not a dream; 10,000 points is just the beginning." Remember, that was said to retail investors. If you believe it, you’re finished. What’s the core? From our perspective, it’s very clear: everyone’s expectations are high, but reality is brutal.

During those two years, when I communicated with various public funds every quarter, they couldn’t understand the current economic situation. For example, I told them about ride-hailing drivers and food delivery. During those two years, a large number of my research sample parameters were from the lower class. When economic growth and consumption expansion upgrade, the research samples are rich people first going to five-star hotels, rich people first buying supercars, rich people first eating seafood, and then your sample parameters sink down to the point where ordinary people eat seafood, drive cars, and enter five-star hotels.

But when the economy contracts, it reverses; the first to contract is the lower class. A few years ago, I said that now there are several million new ride-hailing drivers each year. Did you ever think about where these people come from? Some said rural laborers moving to the city. I said, what era is this? Are rural laborers still moving to the city? This is not when you were doing large-scale infrastructure urbanization and needed migrant workers. Go look at the current rural areas; where are the laborers? Besides the old, weak, sick, and young, is there any labor force left? You didn’t think about where the suddenly increased two million ride-hailing drivers came from in the past two years? The answer is simple: the fall of the middle class. It’s just that your class is different, and you see the problem differently.

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I’m saying ride-hailing drivers. If you do research in Guangzhou, their characteristics are whether they have money or not; today they all eat Longjiang pig trotter rice. But pay attention: how much do ride-hailing drivers in Beijing’s North Fourth Ring eat for lunch? Does it cost 15 yuan for a box lunch with a bottle of water, plus pot-wrapped meat, pork stewed with vermicelli, and tender meat? But remember one thing: never ask how many years the meat is; if you do, you won’t be able to eat it because it’s basically all 80-year-old Lafite. It must be frozen meat, frozen for 20 years or more; otherwise, how could it be so cheap? So don’t look down on pre-prepared dishes; I think pre-prepared dishes are great. Without pre-prepared dishes, ordinary people’s lives would be harder. With pre-prepared dishes, ordinary people’s lives are a bit better. Why? Because for 12 yuan, you can fill your stomach and still eat meat, getting enough protein.

Just remember one thing: when you’re eating for 12 yuan, do you still care how many years the meat is? It’s very interesting when statistics in China talk about demand. I never use a single number; I never use China’s CPI. China’s CPI has always had a big problem. When macroeconomic data was set up, the first goal of Chinese people was to solve eating and dressing, to solve basic needs. So for us, fluctuations in vegetable prices, pork prices, grain prices, and oil prices are more significant than anything else.

Generally speaking, when leaders go down to do visits, the first thing they do is lift the lid at home; the action is very standard: open the pot to see what you’re eating. This action is actually because our important issue back then was to solve the basic needs of the people, so my first concern is what you’re eating. But after the reform and opening up, if eating becomes a problem, that’s a big problem.

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In Western economic research, immigration policies are studied, while China, South Korea, and Japan study population birth rates because the history of these countries determines that they won’t have large-scale immigration. Don’t casually say that aging and low birth rates are happening; look at how the Nordic countries are doing. Goodness, you’re making a sweeping comparison. Have you played "Civilization"? Soon "Civilization" will be released anew; everyone can download it on Steam and play. The starting resource factors are different, and the civilization and empire development strategies you form are also different. Don’t casually make useless comparisons; that’s a big problem for the Chinese economy.

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Investment behavior driven by government debt is theoretically reasonable as long as it can generate tax revenue. In 2008, two economists discussed whether high-speed rail should be built. At that time, I stood with the latter; it should be built because whether to build it depends on whether taxes can be collected. But their calculation methods were different. One calculated according to standard market economics, where tax is based on whether the project can make money. After the high-speed rail from Hangzhou to Shanghai is completed, the cost is calculated, and the second-class ticket needs to be 150 yuan. Can the people afford it? If they can afford it and operate it, the project will break even. So his often-repeated slogan is that if the project can’t make money, then in principle, high-speed rail is a waste, pure debt. This statement was incorrect at that time because China is very unique. China’s taxes are divided into direct and indirect. All the cost calculations you just did were direct taxes, but China’s characteristic is to reduce direct taxes and increase indirect taxes. This gives the Chinese people a very good feeling: our high-speed rail is fast, good, and cheap. The ticket price of 150 yuan only costs us 60 yuan, and the people feel that life is convenient.

How naive and lovely you are! I just want to ask you, who pays the remaining 65 yuan? Then someone says, domestic debt is not debt; the state pays. How is that possible? Who pays this money? Do you know why all infrastructure must follow urbanization? It must be built in new cities. The land for high-speed rail in new cities is very cheap. After the area is enclosed, once the three connections and leveling are done, the land is sold, and houses are built. The 80s generation buys houses for 10,000 or 20,000 yuan. What does this mean? This is called indirect tax. We collect indirect taxes to supplement direct ones.