The U.S. national debt is a big problem, and some say it's like a game of drumming and passing flowers, that is, constantly borrowing new money to pay off old money, rather than relying on one's own strength to pay it back. If this continues, sooner or later something will happen, because there is always a limit to borrowing money, and creditors will not trust the United States anymore.
Will the United States be able to get out of this trouble? Of course, a technological tornado can reduce the pressure of debt, if the economy soars, more wealth and jobs can be created, and the government can collect more taxes and spend less money.
Want to know what the future holds for the U.S. economy? Let's go back to the 90s of the last century and see how the United States came out of the predicament at that time. At that time, when Bush Sr. was in power, the US economy was in shambles, with high inflation, high debt, low growth, and more and more debts, and no one in the international community was optimistic about the United States.
However, after Clinton was elected, he had a unique vision, seized the opportunity of the Internet, vigorously invested in science and technology and the Internet, enabled the information industry to flourish, and led the US economy onto the road of recovery and prosperity. During his eight years in office, the United States performed a miracle, not only with a fiscal surplus, but also with a significant reduction in debt and a stronger dollar.
Now, some people say that AI is the next tech outlet that can bring new vitality to the U.S. economy. However, we must clearly see that AI has not yet matured and cannot change the world, and compared with the Internet at that time, it is still far behind.
In recent years, China has raised interest rates to stimulate people's savings and consumption, resulting in rapid economic growth, becoming the world's second largest economy and the largest creditor of the United States. As for Europe, because of the conflict between Russia and Ukraine, energy and finance have encountered crises, and the euro has also plummeted, which is not good for the United States and investment.
The United States is the leader of the global economy, and its currency, the US dollar, is also the strongest currency in the world. However, the strength of the dollar is not due to how good its economy is, but because of its financial strategy.
The U.S. financial strategy has two key points: one is to use its influence to make other countries' currencies follow the dollar; The second is to use their own technology stocks to let global funds flow to the U.S. market.
The dollar's main competitors are the euro and the yuan, which represent the eurozone and China, respectively, and the two economies that are also the strongest in the world. However, if there are problems in the eurozone and the Chinese economy, their currencies will become weaker and the dollar will be stronger.
If the economic growth of the eurozone and China slows down, then the exchange rate of the euro and the yuan will be **, and the exchange rate of the US dollar will be **. The United States can also use "coercion and inducement" to get the Bank of Japan to lower the exchange rate of the yen, so as to give the dollar an advantage.
In this way, the dollar does not need to follow any economic laws or financial signals, but only needs to use the means of "coercion and inducement" to make the currencies of other countries obey its command.
U.S. technology stocks are the strongest in the U.S. financial war**, and their rise will attract more investors, especially foreign investors, to invest their money in the U.S. market. In this way, the United States can use the money to develop its own economy, while also making the value of the dollar higher. In order to support the rally of US technology stocks, as well as the strength of the dollar, the Fed may choose to "not land", that is, instead of raising interest rates or printing less money, it will continue to release water and fill the market with money. Doing so, while it could lead to rising inflation or a financial bubble, would also allow the United States to take the initiative in the global financial war.
Not landing means that the economy is running in a state of high speed, high temperature and high pressure, which is manifested in soaring prices, soaring prices, crazy consumption, and abundant employment. This state of affairs sounds wonderful, but it is actually very dangerous. Because it means that the economy has gone beyond its normal growth trajectory and has entered an unsustainable bubble phase. This is known in our economic history as "overheating". Over the past 40 years, we have been very careful not to "overheat" because we know that once the bubble bursts, the consequences will be catastrophic.
Why would the United States choose a seemingly irrational path? They don't worry about long-term risks and only want short-term benefits. This is the common choice of the American elite and the financial oligarchy. They don't care about the balance and stability of the economy, they only care about their own power and wealth.
Looking back over the past few decades, we can see that the United States has often made wrong decisions at critical moments of global economic crises, sacrificing long-term interests in exchange for short-term advantages.
For example, in 1997, after the Southeast Asian crisis erupted, the United States should have adjusted its technology bubble to prevent global economic turmoil. However, Greenspan, under Clinton's hints, deliberately indulged in overheating in order to maintain US hegemony. He argues that as long as the U.S. economy remains strong, it can ignore the plight of other countries. This self-serving approach led to the bursting of the Internet bubble in March 2000, which brought huge losses to the global economy.
For example, after the subprime mortgage crisis erupted in 2008, the United States should have tightened its regulation of financial markets to prevent a similar crisis from happening again. However, George W. Bush chose a large-scale bailout and stimulus plan in order to stabilize his position. He argues that as long as U.S. housing prices and consumption remain high, it is okay to ignore the debt problems of other countries. This short-sighted approach has led to the financial chaos we see today, and to a large extent, it is a bitter fruit left over from the subprime mortgage crisis.
There is a strange phenomenon in the US financial markets: every 7 to 10 years, there is a major crisis, and then it slowly recovers. It's like a periodic high fever that requires medication and rest to get better.
But since the mortgage crisis of 2008, America's financial tycoons have not wanted to comply with this phenomenon anymore. They would rather use all kinds of means to delay the crisis, and even want to make the market more lively.
Even if the new crown epidemic in 2020 caused the US stock market to collapse temporarily, they immediately took action and used countless money to stimulate the market, creating an unprecedented bull market.
What is the result? It is to cover up the already serious financial risks with a bigger bubble, so that they will pile up more and more, and it will become more and more difficult to deal with.
Imagine what a horrific spectacle it would be if this bubble suddenly burst, unleashing more than 30 years of accumulated risk!
We don't know when that day will come or how devastating it will be. We can only remain vigilant and prepared.