US President Joe Biden bowed to the US Republican Party for the first time since he became US president, in exchange for the passage of a bill by the House of Representatives of the US Congress to raise the ceiling of the US national debt. The Republican Party of the United States controls the members of the US Congress, so it requires the nod of the Republican Party in the United States to have a chance to pass the relevant bill. For US President Biden bowed his head, Speaker of the House of Representatives of the US Congress McCarthy publicly said that this is a victory for the US Democratic Party, and McCarthy's statement is quite proud. In fact, US President Biden bowed his head, only to solve the risk of default on US Treasury bonds, and the ensuing problems of the US banking industry can be described as "trouble one after another".
The lifting of the US Treasury crisis will have an immediate negative effect, because the US Treasury will promote the issuance of $1.4 trillion of US Treasury bonds, which will immediately lead to the loss of US bank funds, thereby aggravating the dilemma of US bank funding. Since entering 2023, three banks in the United States have failed in just two months, and the reason is invariably due to insufficient funds. In the face of the US Treasury putting in $1.4 trillion of US Treasury bonds, investors will be the first to buy US Treasuries, and in terms of long-term returns, US Treasuries are much higher than the returns of existing banks, which will lead to the rapid flow of funds from US banks to the US Treasury.
When the US banking industry is short of funds, the US Treasury, the Federal Reserve and the US Federal Savings Insurance Agency have injected a lot of money into the US banking industry, and now the US Treasury is "difficult to protect itself", so to obtain funds by issuing new Treasury bonds, it is equivalent to overturning the previous measures to save US banks, so the US banking industry may usher in new turmoil. For the United States, foreign investors buy US Treasury bonds is the safest way, because it will not affect the problem of insufficient funds in the US banking industry, which is an important reason why the United States urgently needs to dialogue and communicate with China, which has the world's largest foreign exchange reserves, so it has become a target for the United States.
The United States abandoning manufacturing has doomed the United States to the current embarrassing situation, because in essence, the financial industry of the United States cannot create wealth, only manufacturing can bring real value to the United States, but the United States has released its original manufacturing industry through globalization. Although then US President Trump realized the importance of manufacturing, but the American elite and vested interests have been unwilling to revive manufacturing, so Trump's series of measures have not been able to change the decline of the United States, so that now the United States is still very passive, the Biden administration in the United States has been in the point of having to live by borrowing.
Now the United States has fallen into a spiral of decline, what the United States has done can no longer be reversed, from the continuous increase in the scale of US national debt, it can be seen that the United States will never be able to pay off its debts, which determines that the United States can only keep "tearing down the east wall to make up for the western wall", followed by the continuous loss of dollar credit. 202306084/Global Defense Watch/Ali, for US President Biden, in terms of the increase in the US national debt ceiling, it is only necessary to lower his head once, but he has to face many problems, and what Biden can do is only maintain the operation of the US government, and there will not be too many variables at present.