Unprecedented, the dollar is scarce, but the United States is more panicked.
As of May 23, the United States owed $30.47 trillion, or 129 percent of U.S. GDP.
In other words, even if it does not eat or drink for a year, the United States will not be able to repay its foreign debt.
So what to do?
The United States has used its usual currency operations, shrunk its balance sheet by 9 trillion yuan, and passed on debt risks to other countries, especially high foreign debt and low foreign reserves, which has led to at least 12 countries falling into a "dollar shortage". A few days ago, India released a report saying that it had fallen into a dollar shortage ahead of schedule and would take at least 12 years to overcome the loss.
However, compared with the reduction of the balance sheet, the United States owes more money, so why is there still a dollar shortage in the market?
In fact, the global economy has developed to this point, and everyone is printing money or borrowing money to develop the economy, which is the so-called "credit expansion" model. For the United States, if it wants to stabilize the expansion of debt, it must be based on the unshakable credit of the dollar.
Therefore, the Fed's strong interest rate hike and strong balance sheet reduction not only accelerated the "transition from flood to drought" of the US dollar, but also released a signal of "ending the long-term base money supply".
What is the United States trying to do?
It is to tell everyone: are you not selling US debt, no problem, but after the sale, there is no way to exchange it for dollars. The advantage of this is that it stabilizes the price of U.S. Treasuries and the credit of the debt as a whole.
As a result, the water released by the United States earlier not only returned, but also doubled the return, but also led to a surge in short-term liquidity demand for the dollar, and there was a "dollar shortage".
In the long run, though, this is not a good thing for the United States.
The simple reason is that when there is a risk of a dependency, then this dependence will definitely be reduced slowly. So the "dollar famine" not only shows the status of the dollar, but also exposes the fragility of the dollar, the ultimate victim may be the United States itself, it seems that every step is full of calculations, in fact, it is more than one act of injustice will kill itself, you say right?