Lifted a stone and shot himself in the foot. Although we have been reminding the United States, the United States seems to have been turning a deaf ear to this. Now, the stone has fallen on the feet of the United States itself, transforming the dollar from a global currency to an American currency that has become America's own problem.
The dollar hegemony that the United States has always prided itself is rapidly declining, and even the emergence of a dollar tidal wave could cause damage to the United States itself. Does this mark the beginning of the decline of dollar hegemony?Is the biggest victim of the U.S. debt crisis on the horizon?
China's large-scale sell-off of U.S. bonds has turned U.S. bonds from a tonic that gave U.S. hegemony in the past to a global poison that could become the biggest lifeline for the U.S. U.S. Treasuries have always been a globally scrambled asset to buy, and the 10-year U.S. Treasury bond in particular is seen as an anchor for global asset pricing. However, in recent years, it has been found that the risk of US bonds has gradually increased compared to their returns.
In the past, the United States has accumulated a large amount of assets through global ** and wealth, and has used dollar hegemony as an anchor to promote the globalization of the dollar and the global debt of the United States. However, with the issuance of US Treasuries at a faster-than-expected pace and the decline in US solvency, most countries around the world are selling US Treasuries.
From the end of 2021 to September this year, China has continuously kept its U.S. debt below $900 billion, hitting a record low of $778.1 billion. Not only China, but most central banks around the world are aggressively raising US debt, including Japan, the United Kingdom, India, Saudi Arabia and other countries. The U.S. debt of the past is gone, and the U.S. debt of today is full of danger.
However, the U.S. relies on the issuance of U.S. Treasury bonds to keep the economy afloat. Now, the world's central banks have withdrawn, and only the United States itself has taken over. According to relevant data reports, the Federal Reserve has lost nearly $860 billion in recent years, and in the face of US interest rate hikes, the Fed has experienced huge losses that are rare in history.
Compared with the Federal Reserve, it is the American people themselves who are now taking over a large number of US bonds. However, in the face of 33With the scale of 7 trillion dollars, can Americans really afford it on their own?
02 The United States has self-inflicted bitter fruits
There is always some kind of price hidden behind the occurrence of things. The United States, which has long relied on global sustenance, has now come to pay its debts.
Today, the United States claims to have a GDP of $26 trillion, which is mainly consumption-led, that is, the United States spends money borrowed from around the world to boost its own GDP.
Now, however, it may be difficult for the United States to borrow money again, and the time has come to repay the debt. In the past, the United States has borrowed from around the world and then distributed cash directly to the American people, but now the world's money is difficult to borrow, and even more difficult, countries around the world are not only no longer borrowing, but are still borrowing money.
This forced the United States to raise interest rates or ** assets to repay its debts. As a result, we see that the U.S. is now attracting investors by raising interest rates, but these investors are no longer central banks, but ordinary people in the U.S.
In other words, the burden of the last borrowing time that the United States has now passed on to the shoulders of the American people. Considering now 33With a U.S. debt of $7 trillion, it is obvious that the current fiscal revenue of the United States will be difficult to repay. Therefore, the only thing the United States can do is to get out of debt through inflation.
This means that the person who takes over the US debt will bear the greatest price for the United States. However, the United States has previously hoped to harvest global assets through the dollar tide and fill the loopholes of the United States itself.
However, this time the dollar tide did not meet US expectations. Even if interest rates are raised to their current highs, it will be the United States itself that will bear the brunt. As a result, we are seeing huge losses in the Fed and a large decline in US industry and consumption.
Even rating agencies in Europe and the United States have downgraded the rating of the United States. Therefore, it can be said that the United States is likely to end up hitting itself when it carries the big stone of the dollar this time.
The current interest in the United States has reached the scale of nearly a trillion US dollars, and the assets harvested through the tide have not been harvested in large quantities by the United States except for Europe, which has been affected by the Russia-Ukraine conflict. As a result, the so-called "tidal" harvest in the United States has become weak.
If the harvest fails, a U.S. rate cut could be the beginning of a dollar collapse, and the American people will be the last price. What are your thoughts on this?Welcome to leave a message in the comment area to discuss!
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