On the chessboard of global politics, the United States holds two potentially game-changing cards. These cards could be a lifesaver for the United States in times of crisis.
Shifts in energy policy
U.S. energy policy is at an inflection point. Traditionally, periods of Fed rate hikes have often been accompanied by oil producers increasing production and selling oil at lower prices to ease inflationary pressures. However, this time, the decision of oil producers to jointly announce production cuts and refuse to cut prices has caused a huge shock to the US capital market and could lead to a sharp rise in domestic inflation expectations.
In addition, European countries are facing energy shortages due to the Russia-Ukraine conflict, and they have relied on oil producers to increase production to reduce their dependence on Russian energy. Now, the decision of the oil-producing countries to cut production has made Europe more dependent on Russia, which poses a new challenge to Europe's energy security.
Debt problems have intensified
Debt levels in the United States are rising rapidly. The Federal Reserve announced that it would raise the dollar debt from 31 trillion to 51 trillion, which is four times the total debt of the United States in the first 220 years of its existence. This rate of growth is worrying, as it could lead to the turning of US bonds into junk bonds. In addition, countries such as China and Japan hold large amounts of dollar debt, and they cannot afford to sit idly by.
The impact of the Russia-Ukraine conflict
Although the United States uses its influence to whitewash the situation in Ukraine, this is not the case. The essence of war is to control key geographical locations, not simply gain or lose territory. Russia's strategic layout in the war is obvious, while Ukraine's ** is mostly performative. Ukraine's depopulation and loss of strategic position put it at a disadvantage in negotiations with Russia.
U.S. response strategy
In the face of these challenges, the United States still has some means to deal with them. For example, the U.S. could alleviate its debt crisis by confiscating the overseas assets of Chinese businessmen around the world, or increase tax revenues by expanding drug legalization. However, these measures come at a cost and could damage the credibility of the United States in the global** and financial world.
Overall, the United States still has some cards to play in the face of the current crisis. But whether these hole cards will be used, and how they will affect the future of the United States, remains an unknown.