The U.S. has recently implemented a new round of interest rate hikes, which has sparked concerns in many countries, and international markets remain in a state of extreme volatility. Investors are concerned about the possible negative economic impact of interest rate hikes.
Mongolia, however, has signed a high-profile local currency swap agreement with China. At the same time, the debt crisis in the United States has intensified, and enterprises have fallen into difficulties in the capital chain, and even bankruptcy.
The U.S. economy is already in recession and seems to have entered a phase of no return. Despite the fact that the United States** has repeatedly stressed that its economic prospects are good, the outside world can see the real situation.
The Fed has insisted on raising interest rates and is reluctant to admit that it is closely related to the bankruptcy of two major financial institutions, which has long been cited as one of the causes of bankruptcy.
According to the latest statistics, the total debt of the United States has exceeded $30 trillion, which has plunged the United States into a serious financial vortex. Some Egyptian economic researchers believe that the escalation of the debt crisis in the United States was caused by an intra-party struggle.
At present, the United States is at odds with each other, exporting a large amount of economic aid, including military aid to Ukraine, which has further exacerbated the national debt crisis.
Partisan struggles have repeatedly pushed the United States to the brink of default, leading to the gradual loss of popular trust and support, leaving many investors confused about the economic prospects of the United States.
One of the Fed's motivations for raising interest rates is to raise interest rates significantly in order to reduce the amount of money in circulation** in the market, thereby curbing inflation.
Second, by raising interest rates to control the rate of prices**, stabilize inflation, ensure the healthy and sustainable development of the economy, and make prices stable.
In addition, interest rate hikes can help maintain sustainable economic growth, reduce risks to the financial system, and avoid economic overheating. The stability of the financial system and the sustainable development of the economy are of paramount importance to any country.
However, interest rate hikes in the United States, the owner of the main currency in circulation, could lead to an increase in the value of the dollar.
The appreciation of the US dollar is good for the United States, but not for other countries, because the cost of exports increases and the national currency depreciates, which in turn affects the international market price and external **. The actions of the United States appear to be for its own benefit, but in fact they are harming global interests.
The Fed's rate hikes have the most direct impact on some emerging economies, which are in dire need of foreign capital and have a strong demand for borrowing. The Fed's interest rate hikes will lead to asset outflows from these countries, increasing debt pressure.
In addition, the Fed's simple interest rate hikes will affect international interest rates and lead to a rise, increasing the borrowing costs and risks needed to stabilize emerging markets. If this continues, it will lead to an even more severe recession or global economic crisis.
The Fed's interest rate hike has had a huge impact on South Korea's exports, in particular. The 25 basis point hike is the 11th in the past year and the highest in 20 years.
The Fed chairman explained that this move is aimed at curbing long-standing high inflation. Although the Fed aims to keep inflation at around 2%, the core CPI remains above 4%.
The U.S. economy is experiencing a slow recession, so the Fed has decided to take a long-term approach to tackle inflation once and for all.
However, this move is seen as only shifting US risks onto other countries, and this irresponsible approach could lead to the collapse of US hegemony and lower international credit ratings, as no country wants to act as an ATM for the US.
Countries around the globe are gradually reducing their intersections with the United States and are even beginning to look for opportunities to cooperate with other global economies. Mongolia is located between China and Russia, and is a landlocked country with relatively slow economic development but rich mineral resources.
Recently, Mongolia and the United States signed the "Rare Earth Agreement" and the "Open Skies Agreement", which sparked controversy.
Considering Mongolia's unique geographical location, the United States needs to air freight to obtain rare earths provided by Mongolia, which is costly, and may need to seek help from China.
As a result, China and Mongolia have signed a "local currency swap agreement", which allows the settlement of investments and ** in their own currencies without the need to convert US dollars. This measure aims to promote friendly exchanges between the two countries, which can be said to be "more beneficial than disadvantageous".
To sum up, in a globalized market economy, the U.S. interest rate hike policy often triggers a chain reaction. There are no eternal enemies, and there are no eternal friends. A win-win situation can only be achieved through mutual cooperation and mutual support among countries.
It is hoped that the United States will soon realize this reality and realize that world hegemony is not the best choice.