The crisis and reset of the global economy in the field of US dollar interest rate hikes.
In today's world, raising interest rates on the US dollar has become a mystery. What is its purpose? Why are Americans so calm and not afraid of this? Could it be that the dollar continues to have low interest rates, and people all over the world spend a good time with the dollar, isn't it? Let's take a look today to see why the Fed is so obsessed with this dangerous game.
The latest bad news is that the shock wave of the surge in bad loans in U.S. commercial real estate credit triggered by the US dollar's interest rate hike is spreading from small and medium-sized regional banks to large Wall Street banks. A few days ago, it was reported that the stock price of New York community banks fell by more than 50% due to serious losses due to bad debts in commercial real estate, triggering a new round of runs on small and medium-sized banks, and the risk of bankruptcy of small and medium-sized banks in the United States rose rapidly. The latest data shows that commercial real estate credit defaults on JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, Goldman Sachs and Morgan Stanley nearly tripled to $9.3 billion in 2023. How high and serious is the risk?
According to data released by the Federal Deposit Insurance Corporation, the commercial real estate credit reserves of the above-mentioned large Wall Street banks are seriously insufficient, and there is a risk of a thunderstorm at any time. In 2023, the amount of loan arrears related to other commercial real estate such as office buildings, shopping malls, and apartments in the United States reached $24.3 billion, up from $11.2 billion in 2022. When Silicon Valley Bank and Signature Bank collapsed in the first half of last year, Goldman Sachs had already warned that the risk of commercial real estate credit was rising sharply. Obviously, on the second anniversary of the current round of US interest rate hikes, the credit risk of commercial real estate has become another extremely risky bubble after junk bonds, sounding the alarm for Wall Street and even the entire US financial industry. This is all because of the US dollar's interest rate hike.
So why is the Fed doing such a thankless job? Among the various speculations about the US dollar raising interest rates, the US dollar tidal harvest world is the most widely circulated and most credible statement. However, many Americans do not believe this claim, and they believe in another version: the US economic reset. The underlying logic of this argument is that there is a very obvious but insurmountable drawback in the highly liberal and highly financialized economic system in the United States, that is, in the shadow of certain regulations, non-performing assets continue to breed and even bubbles. As early as the beginning of the 20th century, American bankers had already discovered the phenomenon of bubbles in the overheated development of the economy.
This self-serving and reckless approach has also brought disaster to the world economy. The biggest tragedy here is that the dollar is the world's currency, so every time the dollar raises interest rates, the world has to suffer the pain of sub-monetary tightening, and it has to experience the disaster of the sub-American capitalists harvesting the world. Do Americans know this mode of economic reset in the midst of a crisis? Does Wall Street know? A lot of people are obviously very clear, so they don't panic. They may also know that as long as they survive the crisis, it will be a gluttonous feast to harvest the world, and only those who cannot persevere in the crisis will become pathetic fools and victims. The plundering of the world's wealth is the greatest original sin of the United States today.