The material in this article comes from the Internet, if it is inconsistent with the actual situation or there is infringement, please contact to delete.
The world is in the midst of a pandemic, and it stands to reason that this should be a time of prominence for the lighthouse nation. However, the truth is unexpected, and the shadows under the light of the lighthouse are growing day by day.
In the face of the challenges of the epidemic, the United States has implemented a series of stifling measures, but these measures mainly revolve around the large-scale printing of dollars to solve the problem, which is obviously only a delay. During the two presidents' terms, the United States printed more than $30 trillion in currency, compared with only $21 trillion in 2020.
This crazy printing of money will inevitably lead to the emergence of inflation problems, and even more, when the inflation problem has not yet manifested a crisis, the national debt problem has already found the United States in advance. The United States has not only opted for large-scale money printing, but also relied on national debt to fill fiscal holes, which is by no means a good idea.
In the face of various social problems caused by the epidemic, the funding gap in the United States is extremely large. Large-scale money printing, while seen as a way to solve the problem, cannot control the trend of too much money flowing to Wall Street. The $30 trillion in money printing was already staggering, but the US then chose to fill the fiscal gap by borrowing further.
The total U.S. national debt has reached $28.4 trillion, and that number is growing. At the same time, the United States also pays $800 billion in interest annually, in stark contrast to the $3.4 trillion in fiscal revenue in 2019. At this rate, it would take nearly 10 years to repay the debt, even if the U.S. government stopped spending.
More seriously, the US Treasury debt in the hands of many countries is about to mature, which is as high as $7.7 trillion, which undoubtedly further exacerbates the already troubled situation in the United States. It is foreseeable that the United States may adopt a similar method of "tearing down the eastern wall to make up for the western wall" to borrow new debts to repay old debts. There may even be a crisis of debt default.
This way of stopping the bleeding often leads to new crises, but it seems to have become commonplace for the United States. It is not difficult to find that there are clear similarities between the inflation caused by large-scale money printing and the current situation. The debt default issue is a series of signals sent by the United States to the world.
U.S. Treasury Secretary Janet Yellen said at a hearing that a series of measures must be taken to avoid defaulting on the debt. This not only reveals America's current predicament, but also sends a clear signal to the world. However, the impact of this signal extends far beyond the continental United States.
A debt default would have a profound impact not only on the United States itself, but also on the international community. Since the first U.S. Treasury bond issuance in 1791, there has never been a real default, despite some minor tactics. This credit is an important guarantee for the normal operation of the US financial system, and if it is broken, it may trigger the risk of economic collapse.
In addition, the United States plays an important role in international politics. With the collapse of U.S. hegemony, many countries may no longer passively accept its leadership and will no longer easily become its pawns. The crisis caused by inflation will make America's allies suffer losses and will not be able to stand alone.
This signal comes as the United States warns the world that if the dollar hegemony collapses in an instant, it will bring about a generally bad situation. Although the world has long been dissatisfied with the United States' approach, this is not the time to change the status quo.
In other words, if the United States does not take effective measures quickly, it may trigger an economic crisis worse than in 2008. This is a hint that countries closely linked to the US economy should take steps to ease debt pressures, although this is only a palliative problem, but it can temporarily alleviate the US crisis.
Another signal is what the United States often does: raising the national debt ceiling. Whenever the United States faces a debt crisis, it will find various reasons to eventually raise the debt ceiling. However, this practice has become commonplace, and countries around the world have long seen through it.
In addition, the United States is trying to send another signal to the world: despite the current crisis, the United States still has a response. However, this signal is not new
Then, let's dive into the next steps taken by the United States. Their decision to defuse the crisis by raising interest rates is undoubtedly a move to the detriment of other countries. The so-called interest rate hike means that the Federal Reserve raises interest rates and implements a tight monetary policy. In short, banks raise interest rates, causing the dollar to appreciate.
After the interest rate hike, the amount of dollars circulating in the market will decrease, causing the dollar to appreciate rapidly, and it will also cause the exchange rate of the dollar against other currencies to rise, thereby depressing the price of gold and depreciating other currencies. In this case, the relative decline in the value of US Treasuries in the hands of other countries can alleviate the pressure on the United States to some extent. Although raising interest rates can alleviate the crisis in the short term, it cannot fundamentally solve the problem, and this is not the first time that the US has done so.
This approach may be different from the large-scale money printing mentioned earlier, but it also requires global risk sharing. The U.S. Treasury debt is scattered around the world, hoping to spread losses in order to reduce domestic pressure, which is the goal pursued by the United States.
However, one might ask, why not continue to print more money than the total amount of US debt in the past 14 months? Yes, this is a simple and crude way, but crazy money printing has fallen into a vicious circle. Printing money triggers inflation and devalues the dollar, while raising interest rates makes the dollar appreciate. At this level, the two measures are contradictory. To choose one of these two methods, it seems difficult to tell which one is worse.
What these two approaches have in common is that countries around the world will bear the consequences. U.S. Treasuries are spread across dozens of countries and regions, and the United States hopes to reduce its losses. But this is not the solution, just a means for the world to pay with the United States.
So, what is a better way to cope? A tax increase may be an option. By raising taxes, the burden will shift to the American people, and a reasonable tax gradient can minimize the possible social harm. As previously proposed in the "super-rich tax" proposal, taxes on a small number of people can minimize social contradictions.
In addition, maintaining the good credit of the Treasury debt is also the basis for future borrowing by the United States. Yellen's previous remarks also revealed this signal, the United States frequently expressed its intention to talk to China, likely to reduce tariffs on some goods, so that more foreign exchange reserves to buy US Treasuries.
Of course, this is another method of "tearing down the eastern wall to make up for the western wall". In general, for the selfish United States, raising interest rates may be the best option and the way back for which the United States is ready.
But this so-called back road is like there is no Guan Yunchang on Huarong Road. Measures such as large-scale money printing and interest rate hikes are ways to mutualize global risks based on the hegemony of the dollar. However, dollar hegemony is collapsing irreversibly, the United States must retreat, and Huarong Road is their only way out. On this Huarong Road, the United States no longer has a righteous friend.
As mentioned earlier, countries around the world do not want the dollar hegemony to collapse quickly. Because the US dollar is still the main settlement currency for international trade, once it loses this status, international prices will be chaotic and disputes will emerge one after another. It is precisely because of the hegemony of the dollar that the United States has been able to move forward with difficulty on Huarong Road. However, at this time, the United States is facing the endless dilemma of Huarong Road and has no hope of survival.
After the pandemic, the world has become more aware of the true face of the United States. The spirit of great power responsibility and cooperation has won China wide acclaim in the international community. Especially during the epidemic, China's responsible attitude has made it clear to many countries that China is a truly reliable partner. At the same time, the United States continues to spread lies in an attempt to smear China, but this practice only shows their hypocrisy.
Therefore, the measures taken by the United States after a series of crises are actually a helpless retreat. They chose to retreat, bowing their heads on the rank of world hegemon and voluntarily giving up. The signal that the United States has released to the world is the truest portrayal of their gradual withdrawal from the stage of history. And Huarong Road has become the only way for the United States.
The above content and materials are derived from the Internet, and the author of this article does not intend to target or allude to any real country, political system, organization, race, individual. The above does not mean that the author of this article endorses the laws, rules, opinions, behaviors in the article and is responsible for the authenticity of the relevant information. The author of this article is not responsible for any problems arising above or related to the above and does not assume any direct or indirect legal liability.
Due to the rules of the platform, you will only be recognized as a fan if you have more interaction with me. If you like my article, you can click "Follow", and you can receive the article push as soon as you become an iron fan. This article is only published in today's headlines, please do not move.