Recently, US President Biden is a little annoyed, a little confused, why is there so much chaos in the country, isn't it just a rate hike? Previous US presidents often play this game, the whole world cut leeks so cool that it is cool, how come I can't cut leeks?
Forty years ago, US President Ronald Reagan swung his scythe and harvested Latin American countries.
Lured by low-interest rates, Latin American countries such as Argentina, Brazil, Mexico and Peru have borrowed large amounts of debt denominated in hard currency. The laissez-faire borrowing environment and the unreasonable development strategy have continuously pushed up the scale of foreign debt.
When the scale of external debt eventually became unbearable, the United States began to raise interest rates, and Latin America's debt ratios rose to unsustainable levels as interest rates rose, capital flows reversed, and developing countries' currencies came under pressure to depreciate.
Finally, in August 1982, Mexico declared its inability to pay its foreign debt, and the Latin American debt crisis broke out, followed by difficulties in repaying debts in Brazil, Venezuela, Argentina, Peru and Chile. The debt crisis has plunged Latin American economies into a "lost decade" and a "middle-income trap."
Thirty years ago, U.S. President Ronald Reagan swung his scythe and harvested Southeast Asia, South Korea and Japan, devastated the economies of those countries.
In 1985, the United States forced Japan and West Germany to sign the Plaza Accord, which began to suppress Japan in various aspects such as finance, trade, semiconductor technology and politics. This caused huge losses to the Japanese economic icon, whose economic losses exceeded those of the defeat of the icon in World War II.
Japan's economy is mired in lost two decades and prolonged deflation, Japan's political influence declines, and the dream of superpower is shattered.
When Clinton became president of the United States in 1993, he was the most economical president of the United States, and his campaign slogan was: "This is the economy, stupid!" ”
From 1994 to 1995, the Fed completed another 12-month rapid interest rate hike cycle, which directly triggered the Southeast Asian economic crisis.
The Fed's interest rate hike has led to capital outflows, the appreciation of the dollar has constrained exports, and the economic slowdown has weakened foreign confidence. The fixed exchange rate system attracted international liquidity to short the Thai baht, eventually bursting the bubble. From the loss of the Thai baht to the outbreak of the regional financial crisis, large-scale capital outflows.
20 years ago, from 2004 to 2006, when George W. Bush was president, the Fed carried out a 24-month slow interest rate hike cycle, and then directly triggered the subprime mortgage crisis in 2008, but then the Fed passed on the financial crisis by overissuing dollars, and by triggering the European debt crisis, it not only led to the near bankruptcy of Greece, Iceland and other countries, but also successfully suppressed the momentum of the euro surpassing the dollar.
Eight years ago, from 2015 to 2018, when Obama was president, the Fed once again completed a three-year cycle of slow interest rate hikes, this time the worst was in South American countries, Venezuela, Argentina have broken out serious economic crises, once again successfully harvested South American countries.
Now I, Biden, the president, the Fed has begun to raise interest rates, and before it can harvest other countries, the banks in their own country cannot resist first, and there have been thunderstorms one after another, and three banks have already been bankrupted and closed by the run on depositors.
Make me dilemma, raise interest rates and there will be bank failures, if you don't raise interest rates, domestic inflation can't be suppressed, and you can't harvest leeks, which is equivalent to losing your previous achievements.
Could it be that my Biden level is too bad, and I am too bad compared to several predecessors?