In 2024, the United States will launch a final showdown against China in the financial field. This is not alarmism, this is a historical fact that each of us is about to witness. The reason is that the United States is now in a difficult situation at home and abroad, and it urgently needs to tear off a large piece of meat from China to regain its own blood.
According to the Federal Reserve, the total federal debt of the United States has exceeded $34 trillion, with an annual interest rate of more than 4%, and the annual interest expense of the Treasury bond alone is 1$4 trillion. How big is this interest expense? Let's compare a few numbers and it will be very clear. The total military spending of the U.S. military in 2023 is $858 billion, that is, the annual interest expense of the U.S. national debt will cost nearly two years of U.S. military spending. The total revenue of the United States in 2023 is about 4$4 trillion, and more than 30% of the annual income of the United States** has to be used to repay interest. And that's just the interest on the national debt, the 34 trillion principal, the Americans haven't paid a dime yet. The huge interest expense on the Treasury bond has been accompanied by severe inflation in the United States. According to the U.S. Bureau of Labor Statistics, in the last three years, the U.S. domestic core product inflation rate has accumulated 40%, while the total wage rate has not exceeded 15%. In other words, the average American's standard of living is now at least 20% lower than it was at the end of 2019.
You must know that this year is the first year in the United States, and the American people are extremely dissatisfied with the status quo, which is also the fundamental reason why Trump can make a comeback. Biden must show real political achievements to stand a chance of re-election, and the election situation has forced Biden to take bigger action. In the face of difficulties, the logic of Americans' thinking is not the same as ours. We always like to reflect first when we encounter things, but Americans have pirate thinking, and when we encounter problems, we do not reflect on ourselves, but rob others, as long as we grab other people's wealth into our own hands, all problems will be solved. Looking around the world today, the only one that still has the capacity to fill such a huge hole in the United States is China. Europe has already been reaped in the Russian-Ukrainian war, and there is no oil and water in the short term. Japan and South Korea are the backyard of the United States, and they can take it at any time, but their current life is also very difficult, and they cannot engage in killing chickens and taking eggs. As for the Middle East, Latin America, Africa, Southeast Asia, and the like, there is not much meat in itself, and it cannot solve the urgent needs of the United States at all.
At the critical point in time when blood is urgently needed, the final decisive goal of the Americans can only be aimed at China. According to the news released by the Federal Reserve, the United States is expected to cut interest rates as early as June this year. From now on, there are still three months left in the time window for the United States to launch a general financial offensive against us, and once it enters the channel of interest rate cuts, the United States will lose the opportunity to attack. Here's a little explanation of why the U.S. can only financially harvest the world if it maintains high interest rates. The U.S. dollar is the world's main currency, and there is a fixed amount of U.S. dollars in circulation, that is, the more U.S. dollars in the United States, the fewer U.S. dollars the countries around the world hold, and the two are mutually beneficial. The main purpose of the Fed's continuous interest rate hikes is to promote the return of dollars from countries around the world to the United States, and then reduce the amount of dollars held by other countries. The number of dollars in the hands of countries around the world has decreased, but their huge debts must be repaid in dollars, in order not to default on their debts, countries will either use foreign exchange reserves to repay debts, or sell their own assets to pay off debts.
Taking China as an example, during the period of rapid economic growth in the past few decades, the total amount of US dollar bonds borrowed by various Chinese companies exceeded 850 billion US dollars, of which more than 1 4 were borrowed by real estate companies. If the state does not care, it is likely that the high-quality assets of these companies will be bought by the Americans at a very low fracture price, and the assets that were originally worth 100 yuan may be more than 10 yuan when the debt is disposed of. If the state manages, then it must use foreign exchange reserves. Now our foreign exchange reserves are 31 trillion US dollars, which can really be used at any time is about 800 billion US dollars earned from the ** surplus every year. China is also the world's largest importer, and it has to import overseas raw materials every year in huge quantities of US dollars. If all of China's foreign exchange reserves are slammed into debt repayment, China's economic recovery will be hampered, and Americans will be prepared to seek a financial showdown with China in the coming months.
The way they will do it is the same old way. The first is to crack down on Hong Kong's Hang Seng Index, which will lead to the outflow of capital from Hong Kong, and then cut off our channels for continuing to raise funds through Hong Kong. The second is to maintain the Fed's high interest rates, pull the first and virtual currencies, and lure domestic capital to flee. The third is to instruct Japan to raise interest rates and lure global capital to Japan to eat interest. Fourth, we will continue to promote de-sinicization, and various ** and rating agencies will take turns to short-sell China's economy and force domestic capital to flee further. Finally, we are forcing the world's companies and countries that owe dollars to debt, depleting our foreign exchange reserves, forcing us to sell our assets at a low price, and then the dollar flows back out of the United States to complete a new round of harvest for the world. Seeing this, many people may be very puzzled, since this process is so easy to use, why didn't it use it before? Could it be that Americans are showing kindness? The Americans have been harvesting the whole world with this set for decades. Typical examples are the Asian financial crisis in 1997 and the European debt crisis in 2010.
Every time the harvest is harvested, the Americans make a lot of money, and the contradictions in the United States are naturally eased. However, in this round of interest rate hike cycle, the United States has encountered hard stubble, and the Federal Reserve has pulled interest rates above 5% for a long time, but still has not been able to complete the harvest, the main reason is that we have withstood it. In the past two years, with our continuous industrial upgrading, high value-added products such as electric vehicles, photovoltaics, and lithium batteries have occupied a large share of the world's mid-to-high-end markets. Now our ** surplus has exceeded 4 trillion, and with these huge ** surpluses as a guarantee, we don't need to sell assets cheaply to deal with the United States. Similarly, if the United States cannot harvest China quickly, it will have to bear the backlash of high interest rates and high inflation. China and the United States are now competing for internal strength, and the competition is to see who falls first, and the winner will then eat the other. In the coming months, the financial war between China and the United States will be decided.
Of course, all of the above derivations are a defensive counterattack around the dollar, a real attempt to defeat the hegemony of the dollar, and to promote "de-dollarization" around the world. China is the world's largest industrial country, and whether China's industrial products are traded in US dollars is one of the most important cornerstones of US dollar hegemony, and its importance is even greater than that of oil transactions in the Middle East. For a long time, China was reluctant to take the initiative to challenge the dollar's dominance as a global currency, but now the United States will not give up until China is brought down. Therefore, blindly backing down will not lead to a way out, and will only make the Americans gain more inches. In order to protect China's hard-won wealth and the world's hard-won wealth, we must completely bring down the hegemony of the dollar. This is the sacred mission entrusted to China by the times, and we cannot shirk it.