This article is the original of "Cai Says Clearly", and it is published simultaneously on various platforms, and it is not allowed to be reprinted.
01
The media are complaining that exports have fallen; Businesses are complaining, orders are gone; Workers are complaining that the breaks are getting longer and the wages are getting lower...
The above situation is generally happening in many Asian countries that are mainly export-oriented, including Vietnam, India, and even South Korea and Japan.
From the data regularly released by the US Department of Commerce, we were surprised to find that the problem happened to the United States: the total amount of goods imported by the United States fell sharply by 6.3%, and Americans could not buy them.
This is the total amount of imports calculated by the U.S. Department of Commerce, and it is not imported from a specific country, which means that the United States in general buys fewer goods from countries around the world than last year.
That's why in the first three quarters of this year, Vietnam's exports fell by 8.2 percent, India's exports fell by 9.5 percent, and South Korea's exports fell by 11.5 percent. It's not that Asian countries can't sell it, it's that the United States can't buy it.
It stands to reason that the US dollar has been appreciating in the past two years, and its purchasing power should be getting stronger and stronger, so why can't it be bought?
The ostensible cause is inflation, which has been rising in the U.S. for 40 years, eroding the purchasing power of consumers.
But the more fundamental reason is that the global financial landscape is constantly changing, and the financial basis for the United States to carry out global harvesting no longer exists.
02
Over the past few years, the US dollar has remained very strong, and has been the world's currency supremacy for decades.
Therefore, the United States can rest assured that it will maintain a trade deficit, although the amount of goods imported from overseas every year is far greater than the amount of American exports, but the US government does not have to worry at all, and only needs to continue to print dollars to continue to buy globally.
Moreover, the United States can also recover the dollars it prints, and the method is very simple, that is, to sell US bonds to other countries.
So in fact, the United States does not buy it with dollars, but with US bonds. Of course, this also comes from the hegemony of the dollar.
With such a hegemonic position, not only can it be purchased globally, but also harvested globally, and by raising interest rates and lowering interest rates, it can guide the appreciation and depreciation of the dollar, and guide the inflow and outflow of the dollar, which can easily push up the asset prices of other countries and easily suppress the asset prices of other countries.
Since all of this is manipulated by the United States, American capitalists can choose to sell at the highest level and buy the core assets of other countries at the lowest level, so as to easily complete the harvest.
However, although this round of US dollar interest rate hikes in a short period of time, it is not like in the past, and it is obvious that the United States wants to reap the global harvest again, but it has failed.
03
From the above analysis, we already know that the United States' efforts to sell U.S. bonds to other countries are an important prerequisite for achieving the harvest.
But now countries are playing out the opposite: trying to sell US bonds, and some countries are even emptying US bonds.
Thus the premise of the harvest is missing.
On the contrary, due to the sell-off of U.S. bonds, the price of U.S. bonds has fallen sharply, the yield has risen sharply, and at the same time, it has also led to the continuous increase in all borrowing costs such as car loans, student loans, and mortgages in the United States.
In the second quarter of this year, credit card debt in the United States reached $1,000 billion. Credit card debt is rising at the same time as interest rates are rising, making it more and more expensive for credit card users to repay their loans.
A team leader at a life sciences company said in an interview that his credit card now has an average interest rate of 18 percent and that he pays $300 more interest each month than before.
The 30-year-old supervisor said that situations like his are more common among friends and colleagues he knows.
Bloomberg also pointed out in its report that the United States will be caught in a potentially very long default cycle.
And now the Fed's layout has to be changed, the original Fed's idea is to raise interest rates quickly to bring down inflation, and then quickly shift to interest rate cuts to support the economy. But now it seems that perhaps the rate hike is not over. And it is even more certain that a rate cut is far from coming.
In this case, the yield on US Treasuries may remain higher and higher for a long time.
As a result, it is difficult for both US bonds and the US dollar to maintain their past positions.
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