preface:
At present, the global economy has been hit hard by the new crown epidemic, and it is originally a state of sailing in a big wave and with turbulence. As one of the world's major economies, the EU plays the role of ballast stone.
In order to solve its own dilemma, the United States plans to throw away the ballast stone of the European Union, so that the ship can travel faster and facilitate its own escape at the bow of the ship. It is a pity that the EU economy has collapsed, and the ship will have to overturn if it does not reach the other side, and no one will be able to run at that time.
Due to the "big release" after the start of the epidemic, the domestic currency in the United States flooded and prices soared, forcing the Fed to start a rate hike tool to close the dollar in circulation in the market to alleviate domestic inflation.
But at this time they will face a huge risk, that is, after deflation, loan interest rates will increase, there will be less money available for investment in the market, the economy will face downward pressure, and after the Biden administration comes to power, the layout of the "big infrastructure plan", "new energy and semiconductor manufacturing industry" and so on will face the dilemma of no money available.
The Fed's interest rate hike policy landed
In a word, without interest rate hikes, prices soar, the American people can't stand it; interest rate hikes, investment is weak, the US economy can't stand it, and it has to lose the time window for investing in the future.
In this dilemma, the US government "found another way" to provoke a war between Ukraine and Russia, forcing European capital to flee and pour into the US market to "hedge".
In this way, the Fed can confidently and boldly raise interest rates to alleviate the problem of US inflation. At the same time, due to the influx of European capital, the United States does not have to worry about the dilemma that there is no money available in the market after the interest rate hike, which is equivalent to "borrowing chickens and eggs" and using European money to maintain the growth rate of the US economy and the future investment of the United States.
Theoretically, this trick can be said to be a "stroke of genius" and should be able to effectively solve the economic problems of the United States. However, from the current results, inflation in the United States has not eased, but has been pushed up because of factors such as rising energy prices.
So, what's wrong with that? Can the United States really save its own economy by harvesting the European Union?
First, take the road of the EU, so that the EU has no way to go
First of all, judging from whether the United States' move of "one arrow and three eagles" can be effective, the answer is yes. Since the end of last year, the Fed has let go of interest rate hikes, and now it has begun the process of raising interest rates.
Although the level of inflation in the United States is still high. But at the same time, it should be noted that the speed of economic growth in the United States has not slowed down significantly, and the new domestic employment rate is still in a relatively good range.
High prices, on the one hand, because under the influence of the epidemic, the global production sector has not yet fully recovered, the supply of commodities is insufficient, under the economic law of supply and demand affecting prices, the United States, such a daily necessities, a large number of countries imported from abroad, prices remain high, it is inevitable.
On the other hand, although the Fed has begun to raise interest rates, after all, this is only the beginning, and the funds that can be withdrawn are limited. In the whole epidemic, the fed released water to more than $7 trillion. So much money wants to be fully returned, it takes time, it can't be achieved overnight.
During the epidemic, the Fed has successively "released water" on a large scale
Therefore, the current high inflation in the United States does not mean that the United States has failed to use the Russo-Ukrainian war to harvest the European Union.
On the contrary, good employment rates, as well as the rate of economic growth, reflect the success of this program. According to information released by the U.S. Department of Labor in early March, the number of new non-farm payrolls in the United States reached 678,000 throughout February, and the unemployment rate fell further, from 4.3% in January to 3.5% in February.
This data proves that in February, when the situation in Russia and Ukraine became increasingly tense, and even in February, when war finally broke out, the investment situation in the United States increased without decreasing.
The Fed's interest rate hike is a news that has been confirmed since last year. Raising interest rates means that the dollar will become more valuable "money", and people are more willing to deposit money in the bank to earn interest, so where does this capital for expanded investment come from?
Of course, it was absorbed from the EU market with the help of the Russo-Ukrainian War. This was demonstrated during the Kosovo War of that year. In 1999, after a dozen kosovo wars, the euro was hit hard, and nearly $1 trillion of European capital ran to the United States to "hedge".
When these capitals arrive in the United States, it is impossible to wait for inflation and currency depreciation. Definitely invest in various businesses and projects in the United States. This undoubtedly provides financial support for the "big infrastructure plan" and the layout of the new energy industry that the US government is now pushing.
EU stocks plunged
Even better, the money is the eu's existing capital, not the Fed's new print, although the influx into the United States in the short term has contributed to the rise in American prices.
But in the long run, the total amount of dollars circulating around the world has not increased significantly, but because the Fed has raised interest rates. The dollar is more "valuable" because it is less, so prices will naturally fall one day.
As a result, the United States received at least three benefits. First, with the help of the Russo-Ukrainian war, Russia was further weakened; second, it harvested EU capital and borrowed chickens and eggs to ensure the speed of economic development of the United States and investment in future great power competition; third, the Federal Reserve raised interest rates, prompting the dollar to flow back, alleviating the problem of dollar depreciation and soaring prices.
Logically, there is nothing wrong with this process. So, can the United States really solve its economic problems by harvesting the EU?
Second, the United States underestimated the impact of the Russo-Ukrainian war on the economies of other countries
Speaking of this, it is not difficult to find out whether the United States' move of "one arrow and three eagles" can ultimately work, and the core question is whether the serious inflation in the United States is temporary or long-term.
If in the end the price of the United States is reduced, then "one arrow and three eagles" is successful; but if the inflation in the United States does not fall in the end, then even if the economic growth and employment data are very good, but in the context of wage growth can not keep up with the speed of price increases, the American people still have to be hollowed out.
When they find that the money they have earned is not enough to maintain their livelihood, the desire to go to work will be greatly reduced, and the desire to engage in "zero yuan purchase" will be greatly enhanced.
At that time, it is a point-by-point, collapsing economic rout.
So, will inflation in the United States be significantly alleviated in the coming period?
Global prices are rising
To understand this problem, we have to look at it from two aspects. Inflation, in the simplest terms, is more money and less goods. Therefore, to solve it, no matter what method you use, you will inevitably end up with two basic points:
First, reduce the amount of money circulating in the market.
Second, increase the number of goods circulating in the market.
At present, the Fed's interest rate hike and withdraw the dollar is to reduce the funds circulating in the market. When the dollar decreases, if there are still so many goods circulating in the market, or even more because of the expansion of production, prices will naturally fall.
Therefore, the most critical question has become the increase or decrease in the number of goods circulating in the global market in the future.
Judging from the current situation, the answer to this question is probably not very friendly to the United States. With the development of the Russo-Ukrainian War, Europe and the United States imposed a series of strict sanctions on Russia, which, together with the Russo-Ukrainian War itself, caused two problems in the global economy.
The first is panic in small and medium-sized countries. In Serbia, for example, before the war broke out, Serbia hoarded tens of thousands of tons of sugar and cooking oil, as well as hundreds of thousands of tons of grain, from the market.
This is similar in other countries, notably the European Union. The uncertainty brought about by the Russo-Ukrainian war has prompted every country to want to turn the money in its hands into various strategic reserves.
Rising energy prices have affected economic recovery
After all, in a turbulent world, the most reliable things are always food and other practical goods.
When all countries in the world began to hoard goods, there were naturally fewer goods circulating in the market.
Second, Russia and Ukraine, which account for less than 2% of the world's GDP, are two of the world's major energy exporters and the other a major food producer.
When war broke out in these two countries, the supply of energy and food, the two most basic commodities, suddenly decreased. The rise in energy and food prices will inevitably lead to an increase in the production costs of enterprises.
The production cost of enterprises increases, and the price of commodities will rise. When prices go up, consumers can't afford it. Consumers can't afford it, and merchants don't dare to expand production...
Such a vicious cycle is a word that is more economically terrible than inflation, stagflation. Stagflation, to put it bluntly, is the result of long-term inflation.
Obviously, combining the above two factors, it will be found that it is unrealistic for the United States to want to reduce prices in the short term. However, if prices do not fall and inflation does not ease, the United States' elaborate "one arrow and three eagles" strategy will be blinded.
This is also the reason why the United States is now easing relations with former enemies, including Iran and Venezuela, and wants them to increase energy exports.
The Russo-Ukrainian war prompted U.S. oil prices to soar
At this time, a new problem has arisen, and when the INTEREST groups in the United States planned this plan, did they not think that they would encounter the current problems?
Third, only care about yourself, do not care about the results of others
You can underestimate the conscience of a capitalist, but you should never underestimate the greed and cunning of a capitalist.
As the framers of the current global order, the Cunning and Greed of the United States and the capitalists who manipulate the United States behind the scenes are beyond doubt. From the strategy of using the Russo-Ukrainian war to harvest the European Union and realize the interests of the United States, we can see the viciousness of these people's vision.
So, why did such a smart group of people not expect that the so-called "one stone and three eagles" would finally be a lose-lose situation?
The reason is very simple, this is a typical embodiment of the long time, the United States only cares about itself, does not care about others, "greedy and clumsy". In the vernacular, it is too self-centered, and when thinking about things, the eyes are only focused on the benefits that can be obtained, but they cannot see the damage caused to others.
Today, when the trend of economic globalization has been formed, this is the last straw that crushes the camel.
In the words of the mainland folk, economic globalization has prompted all economies in the world to become grasshoppers on a rope, and if you cut off any link, the ultimate loss will inevitably be borne by everyone together.
The Fed "harvests" the world by raising interest rates and cutting interest rates
As soon as the Russo-Ukrainian War broke out, European capital did run to the United States to help the United States "lay eggs." But at the same time, the war has also affected the productive sectors of Russia, Ukraine, and indeed the European Union. At the same time, the panic caused by the war has prompted a large number of small and medium-sized countries to extensively hoard resources and restrict the export of key materials such as energy and food.
As a result, the total number of commodities produced by the global production sector is a large part of the total number of goods, not to mention, and some commodities, because of the hoarding of various countries, are piled up in warehouses and do not participate in circulation.
As a result, the goods circulating in the entire global market are even rarer. Although the dollar has become more valuable because of the interest rate hike, the price of commodities has also increased because of the shortage of quantities.
Finally, there is a closed loop where wages cannot outperform the level of price increases. As soon as this situation appears, with the urine nature of the American people, running to participate in the "zero yuan purchase" is unavoidable.
In this sense, the United States wants to use the Russo-Ukrainian war to cooperate with the Fed to raise interest rates and harvest the EU to solve its own economic problems, but it is likely to fail. Because in the global economic system, this is a typical "loss is not enough to have more than enough", and the method of exhausting the fish is doomed to not last.
IV. Conclusion
Two days ago I learned an Indian proverb that says, "Help your friend punch a boat across the river, and you'll be able to get to the other side."
Now in order to solve its own dilemma, the United States plans to throw this ballast stone away, so that the ship can travel faster and facilitate its own escape at the bow of the ship. It is a pity that the EU economy has collapsed, and the ship will have to overturn if it does not reach the other side, and no one will be able to run at that time.
Moreover, before the European Union collapsed, the other people on the ship saw the United States doing this, and they dismantled the ship board as a life raft, and the ship did not need to be destroyed by wind and waves, and it disintegrated from the inside, and what to talk about reaching the other side.
Are you saying they're stupid? No, people are very intelligent, but greed and selfishness cover up wisdom.