Asia is fighting a currency war
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Facts
The yen has been crumbling in the storm of the US dollar in Asia, while the renminbi has shown surprising wisdom. It's a currency war without gunpowder, a contest for wealth, power, and influence.
As the end of the dollar's interest rate hike approaches, what should have been the dawn of peace seems to herald an even bigger storm;
Everyone knows that the United States, the global economic giant, is beginning to show its sharp fangs.
Its gaze was tightly fixed on the yen and Japanese government bonds, as if a well-planned predatory operation was about to begin.
During Japanese Prime Minister Fumio Kishida's visit to the United States, a large number of dollar capital bears quietly gathered in Japan.
Is this a coincidence? Or is it an ingenious arrangement by someone with a heart? In the cruel game of the capital market, the law of the jungle is the eternal theme.
Europe has already experienced a round of harvesting, and now East Asia has become a new battlefield.
In the face of the strong offensive of the United States, the countries of East Asia are united as a rock.
This time, the United States seems to have changed its strategy and decided to take Japan, which has already fattened up, first.
The yen's rout fell like a cliff, hitting its lowest level since 1990. Japanese government bonds collapsed across the board, and a heavily indebted Japan was unable to resist the onslaught of the dollar.
In this currency war, Japan seems to be the next target of the United States.
So, how did Japan get swallowed up by the United States step by step?
1. The exchange rate difference between the Japanese yen and the US dollar provides investors with a huge room to operate.
2. The interest on deposits in the US dollar is as high as 5% or more, while the interest on deposits in the Japanese yen is almost zero.
3. This interest rate differential attracts a large amount of capital to borrow the yen to exchange for the dollar, thus exacerbating the depreciation pressure on the yen.
In this currency war, we have seen the helplessness and struggle of Asian countries in the face of the US dollar offensive. It is precisely in this predicament that the renminbi has shown surprising wisdom.
Netizens
epilogue
16 years of reincarnation! 08 is just right now! Only Asia can still wear wool, so be prepared for the financial crisis.
In order to prevent the United States from harvesting, Asian countries have no choice but to report to the group to confront. The Chinese government can come forward to negotiate with Asian countries to come up with a currency, which can be called the Asian renminbi. In this way, it can confront strong currencies such as the dollar and the euro, and although it is not possible to defeat Europe and the United States, there is no problem in self-preservation.
Of course, these need to be supported by a stable economy, and after entering the industrial age, science and technology are the primary productive forces, and those countries around us that have cutting-edge science and technology are all together with the United States.
In the past, economic experts were always preaching that when China's economy would surpass the United States, and what about now? If the United States steps on Japan, it will make Japan's economy stagnant for decades, and the same will be true for the world and other countries, and this is the hegemony of the dollar, which can harvest the whole world at will.
If it had been before, buying U.S. bonds would have been crazy. China has bought a lot of U.S. bonds.
Because in the past, the interest rate of U.S. bonds did not rise, but actually fell, and the so-called rise in the yield of U.S. bonds actually fell in the transaction price. For example, a U.S. bond is bought for 100 yuan, with an interest of 4 and 104 at maturity, but now someone sells it at 98, and you still get 104 when you buy it at 98, and the yield rises. But 98 people take 8% of the dollar savings, and the final income is still higher than yours. The above is an analogy.