In recent days, two major events have taken place in the European direction. First of all, the ECB made it clear that it will not cut interest rates in April, and it will not consider cutting interest rates until June this year at the earliest. Second, the leaders of several major European countries have begun to engage intensively with China.
On April 15, German Chancellor Olaf Scholz will carry out a round of "moving visits to China". I say "moving" because this time German companies are almost "pouring out" to visit China. The list listed by Reuters includes at least 11 companies including Siemens, BMW, Zeiss, BASF and Volkswagen, and the list continues to expand.
German companies are putting on a posture of moving ants, and regard China as a lifeline to save themselves. Scholz's government entourage this time is also very interesting. According to German media sources, Scholz plans to bring three ministers with him, but this does not include Baerbock, who is keen on concocting anti-China issues and advocating "systematic strategic competition" with China, but three ministers from the Ministry of Agriculture, the Ministry of Digitalization and the Ministry of Environment.
German Chancellor Olaf Scholz
Before the visit to China, a number of German museums also announced that they would start a "tracing research" on Chinese cultural relics in China, and strive to return these cultural relics to China as soon as possible. Although neither Chinese nor German officials have clearly disclosed what they want to talk about, Germany has given a lot of sincerity this time just by looking at the specifications of the delegation and the direction of public opinion.
In addition to Germany, France is also expected to make big moves recently. This year marks the 60th anniversary of the establishment of diplomatic relations between China and France, and according to AFP, China's top officials are expected to return to France in May. Taken together, it is not difficult to conclude that Europe is "saving itself". With the successive defeats of NATO and the Ukrainian army on the battlefield, the United States and the West have in fact entered the stage of dividing the pot.
It's just that the first pot is not on the battlefield, but economically. With the European Central Bank announcing the postponement of its interest rate hike plan, a new round of "economic war" between Europe and the United States has actually begun. The Federal Reserve is certain to cut interest rates this year, and it is likely to do so in the first half of the year. This is determined not only by economic factors, but also by political factors.
The United States and Europe
If Biden wants to run for re-election, he must make good-looking economic data in the sprint stage of the general election, and how to do this economic data? Naturally, it is to put a watermark on money and scatter money on the people. Although this practice is to drink water to quench thirst, it is indeed convenient and easy to use. Nearly every president in U.S. history has asked the Fed to release water when seeking re-election.
One of the most typical is that in the sixties and seventies of the last century, Nixon forced the Federal Reserve to cut interest rates when inflation was not contained, and finally detonated a "financial bomb" and caused an epic stagflation. The United States now faces the same problem. With the U.S. economy maintaining high interest rates for four consecutive months, the core CPI has been exceeding expectations, and the release of water will almost inevitably bring inflation, and even hyperinflation may occur.
So, how can Biden "release water and control inflation at the same time"? Naturally, he is extending his "sickle" to his allies. The U.S. has been doing something lately, which is to force its allies to take over the massive amount of dollars that are about to pour out, which is manifested in asking the Bank of Japan, which is a safe-haven currency, to abandon the YCC policy and push the yen to depreciate, and at the same time, to let the euro cut interest rates before the United States, so that the euro will also depreciate.
Biden
The calculation of the United States is very clear, it is going to explode the thunder anyway, then it must let either Japan or Europe explode first. As long as these two economies can't hold out before the United States, the currencies depreciate, and asset prices hit the bottom, then the United States will take the opportunity to put watermark money, and a large number of dollars can rush overseas to buy the bottom, so as not to rot and brew a new round of big inflation at home.
Of course, the U.S. scythe was originally aimed at China. But China is too hard, and the sickle of the United States cannot be cut for a while, and it is anxious to wait for the rice to go to the pot, so it turns to harvest Japan and Europe. However, the United States has encountered a new problem, although Japan and Europe are easier to cut than China, they are also very limited, and the Federal Reserve's calculations The Bank of Japan and the European Central Bank have also seen it.
While announcing the suspension of YCC, Japan is still buying Japanese bonds, which is equivalent to playing a word game and draining the United States; Europe's attitude is even more resolute, directly announcing that it will not raise interest rates before June, which is equivalent to holding up until the United States releases water before following up, and will never use the euro as a cushion to help the dollar land softly.
Dollar
Under such circumstances, the United States began to make "off-the-counter moves." As for Japan, this off-the-counter move is to use the Tokyo District Public Prosecutor's Office, the shadow department of the CIA, to liquidate the entire high-level politicians of the Liberal Democratic Party, completely dissolve the three major factions, and tie Japan to the anti-China chariot of the United States. As for Europe, the US has thrown out an off-the-counter move to provoke war.
This is actually an old trick and a new one. At the end of the 90s of the last century, the euro was born with a strong momentum, which seriously threatened the status of the dollar as an international currency. As a result, the United States launched a series of heavy blows against Europe, first bombing the Federal Republic of Yugoslavia, and then setting off the second Gulf War.
And now this scene is a classic reproduction, and the surrounding area of Europe has become a mess, from the Red Sea to the Mediterranean, the clouds of war are shrouded. Recently, protests by tens of thousands of people have erupted in Hungary. And where Hungary is located, is the heart of the "Balkan powder keg".
Central
The attitude of the United States is very clear, if the ECB is unwilling to cut interest rates, then the war will be burned to the economic center of Europe little by little, and the euro must depreciate before the dollar in any case. Against this backdrop, China has become Europe's last straw. Looking at the world, China, which advocates multipolarity, is the only country that can help Europe in terms of willingness and ability.
In the economic field, China can deepen cooperation with European companies to share development dividends and help them tide over the most difficult periods, and at the same time, a large number of high-quality and low-cost goods from China can also help the EU stabilize prices and reduce inflation.
Politically, China has some influence over both Russia and Iran, and can push the parties to the Palestinian-Israeli and Russia-Ukraine conflicts to the negotiating table as soon as possible. At present, Lavrov has arrived in Beijing, and the Russian side has made it clear that it wants to hold in-depth consultations with the Chinese side on the Ukraine crisis. All indications indicate that China intends to build a bridge between Russia and Europe and completely bankrupt the US plan to ignite the powder keg in Europe.
Russian Foreign Minister
This point is becoming clearer and clearer for several old European powers. But then again, if Europe wants China to take action, the sincerity shown by just one visit to China is far from enough. The scale of Scholz's visit to China is very large, but it remains to be seen how much cooperation can be reached in the end and how high the gold content will be.
Although Europe has a demand for China, it is clear that it is still unwilling to let go of the "developed country" shelf. Although von der Leyen and Baerbock, the two US proxies, are gradually marginalized within the EU, the EU has not yet shown its determination to clean up the "legacy" left by this group of people, and is still following the United States to find fault with China on the issues of new energy, electric vehicles and semiconductors.
In this case, China will not easily nod to help Europe save its life, and Scholz and Macron will have to show greater sincerity.
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