The United States used to drag down the Soviet Union with an interest rate of 20%, and now the Fed only needs to continue raising interest rates to bring down China.
On the Internet inside the wall, 1450, there are too many people who kneel and kneel, and there must be people who receive funding to stir up social stability, so let's talk about the 20% interest rate here.
Has there ever been a 20% interest rate in the United States?
Yes, and three more.
In the 80s, the United States started with inflation of 14.6%, due to which inflation could not be controlled.
In January 1980, the federal funds rate was adjusted to 14%, but it had little effect and inflation persisted. By December 5, 1980, the Federal Open Market Committee (which sets monetary policy and directs and oversees open market operations) raised interest rates by another 2%, bringing it to an unprecedented 20%.
In fact, the 20% interest rate lasted only 24 days before it ended, and then, on February 3, 1981, May 18, 1981, the interest rate was raised to 20% twice, and after November 17, 1981, the Fed rate hit a record again in 2008 (0 interest rate in the 2008 economic crisis).
Why the U.S. is adjusting interest rates to 20%
This starts with the collapse of the Bretton Woods system.
Throughout the 70s, after enjoying the Bretton Woods system for nearly 30 years, the United States found that due to overprinting too much money, gold reserves could not be exchanged for dollars according to the agreement, resulting in uncontrollable inflation, Nixon terminated the peg of the dollar to gold, and the gold standard became legal tender, which marked the collapse of the Bretton Woods system and entered the post-Bretton Woods period.
Even so, it could not prevent inflation from happening – unemployment due to industrial relocation, price increases due to over-issuance of money, and the dollar entered a 10-year cycle of interest rate hikes in order to maintain stability.
In fact, for the United States in the past 10 years, it is very appropriate to describe it as "crossing the river by feeling the stones". From January 12, 1971, until November 17, 1981, the Fed tried to use financial means to influence inflation.
Did the US dollar hike have an impact on the USSR
Yes.
It had an impact, but the United States at that time was also unable to protect itself, and the original world economic system was on the verge of collapse. In that situation, it was only more incompetent to entrust the Soviet Union.
During the Brezhnev period, Alexei Kosygin was appointed to take charge of the economy, which allowed the Soviet economy to recover for 15 years after 1964.
The Soviet-Afghan war of 1979 was one of the most important factors that triggered the collapse of the Soviet Union, the other being corruption.
But if Alexei Kosygin had not died, the USSR would not have at least declined so quickly, alas, in 1980 Kosygin, who was almost the only top of the Soviet economy at that time.
The next 10 years were 10 years of world economic recovery, but the Soviet Union, without Kosygin, tried its best to fish and finally collapsed.
illustrate
This article just doesn't want the information on the Internet to be spliced by people with intentions and cause panic.