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Since World War II, the U.S. government has responded to the accumulated debt problem by increasing the debt ceiling. At the heart of this approach is the continued increase in the number of dollars through large-scale money printing and bond issuance, which in turn drives up the prices of various commodities. According to statistics, the US government has raised its debt limit more than 110 times in the past century.
Against the backdrop of continued interest rate hikes in the United States, the global economic and trade order is in jeopardy. At the same time, the United States is also in deep trouble, with soaring commodity prices and increasing employment problems. Not long ago, Silicon Valley Bank, as a well-known US banking institution, had to declare bankruptcy due to operational risks, which is only the tip of the iceberg of the US banking crisis.
The bankruptcy of the Silicon Valley Bank only marked the beginning of the collapse of the American economic myth, which led to a severe vicious circle. The United States has long profited handsomely in World War II, but these accumulations have been nearly exhausted by the current government, leaving only a heavy $31 trillion in debt. The storm of Silicon Valley bank bankruptcies has swept across the United States, and many large countries have reduced their holdings of U.S. debt, further weakening the U.S. banking sector.
With the vacillation of the dollar's hegemony, the United States has to seek a path of decoupling, and even provoke conflicts in some regions. However, once the US debt ceiling is broken, the US may default, which the government does not want to face. Therefore, in order to avoid a direct default, the United States seeks to undermine the existing international order. However, the dollar-centric global system has been weakened, and it is no longer possible for the United States to plunder the wealth of other countries by hegemonic means.
Entering 2023, US prices are soaring, and the Fed's ostensible view of raising interest rates is to curb inflation, but it is actually transferring risks. However, this approach is no longer effective today, the dollar's hegemony is shaken, and it is difficult for the United States to transfer the crisis to other countries.
The bankruptcy of the Silicon Valley Bank was the result of a large reduction in the holdings of US debt by many large countries, and the banks faced a run crisis when the US government was unable to issue a large amount of US debt. The bankruptcy of the Silicon Valley Bank was just the beginning of the bursting of the U.S. bank bubble, the dollar's international influence declined, and the Fed's water release exacerbated the debt crisis.
To save the economy, the Fed needs to rely on global trade and reserve funds to ease inflationary pressures and export high inflation to other countries. In order to escape the dollar shock and avoid becoming a victim of the US financial turmoil, the international community must join forces to de-dollarize and weaken the impact of the dollar. Many countries have moved in this direction, and India has decided to bypass the dollar and settle in its own currency. South American countries such as Brazil are also looking for alternatives to the dollar, signing agreements with China to trade in their own currencies. ASEAN countries are discussing de-dollarization, European countries have sharply reduced their holdings of US debt, and the dollar hegemony has disappeared after being abused
The dollar's hegemony is already in jeopardy and is now facing unprecedented challenges. Several countries are looking to wean themselves off the dollar and find alternatives to ensure the stability of their economies. Globally, the trend towards de-dollarization is intensifying, forcing countries to rethink their currency settlement and trade methods.
However, the United States Government continues to try to maintain its hegemonic position by various means. Not only provoking conflicts internationally, but also trying to pass on risks through interest rate hikes. This time, however, the United States found that what had been done in the past was no longer working. The dollar's influence is declining, and the international community is beginning to recognize its vulnerability. Behind the Russia-Ukraine conflict, the role of the United States as a behind-the-scenes promoter in international affairs is highlighted.
In today's complex and volatile international environment, the United States must face up to reality and realize that its hegemonic position is no longer secure. Gone are the days of hegemonic control over the global economy and wealth. The international community is no longer willing to be bound by the influence of the dollar, and more and more countries are actively looking for ways to get rid of the hegemony of the dollar.
In general, the decline of dollar hegemony has become an irreversible trend. In economic, political, trade and other aspects, the United States is facing severe challenges. As countries accelerate the pace of de-dollarization, the dollar's position is increasingly precarious. This opens up new possibilities for changing the international economic order and gives countries more autonomy in reshaping the global landscape.