I agree with Mr. Xie in that inflation is a very power factor to push up housing price. Housing or land asset itself doesn’t create value other than acting as a powerful manifestation for the effect of inflation over the long term. In reality, housing or land is a long-term mirror for inflation. For the short term, they don’t necessarily act in synchronization. Whatever Fed Reserve is doing today, if they can stir up long term inflation, no matter how bad it would be for everything else, it’s going to be very good for real property holders at the expense of everybody else. By reducing the rate, it will contribute to stir up long-term inflation. The other half is being contributed by a natural reduction of price currently going on regardless how painful that’s going to be. Simply speaking, we are in the process of reducing the ratio from 170% to 100%, Half of that reduction is from reducing the interest rate, another half is from price reduction directly. However, Fed’s rate reduction is not going to turn around the housing market immediately. Eventually, it’s going to contribute to inflation, setting the stage for a new cycle, the lagging effect will be powerful.

I agree with Mr. Xie in that inflation is a very power factor to push up housing price. Housing or land asset itself doesn’t create value other than acting as a powerful manifestation for the effect of inflation over the long term. In reality, housing or land is a long-term mirror for inflation. For the short term, they don’t necessarily act in synchronization. Whatever Fed Reserve is doing today, if they can stir up long term inflation, no matter how bad it would be for everything else, it’s going to be very good for real property holders at the expense of everybody else. By reducing the rate, it will contribute to stir up long-term inflation. The other half is being contributed by a natural reduction of price currently going on regardless how painful that’s going to be. Simply speaking, we are in the process of reducing the ratio from 170% to 100%, Half of that reduction is from reducing the interest rate, another half is from price reduction directly. However, Fed’s rate reduction is not going to turn around the housing market immediately. Eventually, it’s going to contribute to inflation, setting the stage for a new cycle, the lagging effect will be powerful.