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U.S. monetary policy has been dominated by the dollar for nearly 50 years, maximizing benefits through massive asset flows. However, this practice has been seen through by countries around the world, and the credibility of the United States is getting lower and lower. In order to solve its own economic problems, the US government has constantly raised interest rates in an attempt to repeat the good drama of harvesting leek assets in various countries in the past, but this practice can no longer continue.
70% of the US budget is tied by fixed expenses such as social security, military spending has only increased, and interest on US debt is also rising. If it does not continue to borrow, the current budget, the Biden administration can control only 14% of spending. Therefore, now the Biden administration can only talk about values in diplomatic settings, and the Fed has to work with the US government and Congress to solve the current economic problems in order to avoid raising interest rates again this year.
However, to solve the problem of inflation, it is necessary to lay down the current high-cost commodity, which requires greater courage and determination on the part of the Biden administration. The US government shutdown has aroused global attention, the Trump administration continues to play the anti-China card, will the Biden administration continue? The U.S. Congress is still divided over budget negotiations, with right-wing Republicans demanding deep spending cuts from the federal government, making it impossible to move forward with the process of passing the budget in the House of Representatives.
However, expenses cannot be reduced, and it may just be a matter of laying off a few people to make an account. In the face of countries around the world preparing to deal with the dollar liquidity crisis passed on by the United States, what should the United States do next? If you only use the dollar as a weapon, you will not harvest high-quality assets, and Argentina and Brazil are using the yuan to prevent their assets from being harvested.
The subsequent confrontations such as science and technology wars, financial wars, external alliance confrontations, and industrial chain transfers are all means of attack and require our continuous attention.
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