【Background】
In this turbulent era, currency wars are quietly unfolding. The U.S. dollar, the hegemon of the global economy, has flaunted its power on the monetary stage with its powerful influence. And we, the nations of Asia, like the warriors defending the city, are struggling to defend their currency territories. Today, the US dollar rate hike is nearing its end, but this does not mean that the dawn of peace is coming. On the contrary, this is precisely the time when it is particularly dangerous. The United States, the giant of the global economy, is beginning to show its fangs and is ready to launch a new round of attacks.
Loading...
In this war without gunpowder, there is a particularly striking Japan. As a loyal ally of the United States, Japan always seems to be caught up in various turmoil. This time, the dollar is again targeting the yen and Japanese government bonds. A thrilling gluttonous feast is quietly unfolding on this eastern island country.
One might ask, what is going on in this currency war, and why is it so thrilling? In fact, the answer lies in the seemingly mundane economic data.
[Text]
The yen, once a glorious currency, is now in a predicament that it has never been. Since the beginning of April, the yen exchange rate has been falling sharply like a kite with a broken string. In just a few months, the yen hit its lowest level since 1990. At the same time, the Japanese government bond market has also collapsed, and Japan, which has the highest debt ratio in the world, seems to be unable to resist the impact of the dollar.
So, what exactly caused the collapse of the yen? In fact, all this is related to the high interest rate policy of the dollar. Against the backdrop of the US dollar's interest rate hike, the exchange rate difference between the yen and the US dollar has created a huge room for maneuver. Some speculators began to borrow yen, which they then exchanged for dollars and deposited them in American banks to earn high interest. This operation is repeated over and over again, as if the yen has been smashed again and again.
As the supply of yen in the market continues to increase, its exchange rate naturally begins to fall. When 10,000 yen can only be exchanged for 60 dollars, those speculators can return the borrowed yen and easily earn the difference. This operation is not only simple and easy, but also very profitable, so it attracts more and more capital influx.
In this currency war, Japan seems to have become an "ATM" for the United States. More worryingly, as the yen depreciated, Japan's domestic asset prices began to suffer. Real estate, automobiles and other industries are under tremendous pressure. For foreign buyers, now is a good time to copy Japanese assets.
In this currency contest, not every country appears to be as vulnerable as Japan. Asia's economic giant, China, for example, has shown remarkable resilience to resist. When US financial speculators tried to storm Hong Kong's offshore renminbi market, we responded quickly and resolutely, raising the offshore renminbi overnight lending rate to 6.3%, leaving the big bears in disarray.
Why is this trick so powerful? Actually, the logic is not complicated. Bears who want to short the renminbi will have to raise enough positions in the renminbi first. However, in the current high interest rate environment, the gains they receive from shorting simply cannot cover the interest costs they need to pay for borrowing. This is our ruthless move! In contrast, Japan is somewhat powerless to return to heaven. They did not dare to raise interest rates as decisively as China did, and as a result, they could only watch capital outflows and currency depreciation.
Of course, we should also be soberly aware that this currency war is far from over. The dollar is still eyeing the wealth in our hands. If we are the slightest negligent, we risk repeating the mistakes of Japan.
At the same time, we should also see the deep-seated reason behind this currency war - the change in the global economic landscape. With the rise of emerging markets and the relative decline of developed countries, the dollar's position is no longer as secure as it once was. Therefore, the United States will do whatever it takes to maintain its hegemony and plunder the wealth of other countries through currency wars.
【Sublimation at the end】
In this thrilling currency war, we have seen the game and contest between countries, and also felt the double-edged sword effect of economic globalization. It brings prosperity and opportunities, but also risks and challenges. Therefore, each and every one of us should be a witness and a participant in this war, paying attention to its dynamics and thinking about its implications.
At the same time, we must also understand that currency wars are not just a contest between countries, but a part of each and every one of our lives. It's about our wallets, our work, our future. Therefore, we cannot stay out of the situation, let alone passively accept the arrangement of fate.
In this war, we Asians must unite to resist the onslaught of external forces. We need to strengthen regional cooperation and promote the process of economic integration, we need to improve the soundness of the financial system and enhance the ability to resist risks, and we need to strengthen the education of citizens' economic literacy and raise the public's awareness of financial risk prevention.
Conclusion I would like to say that although the currency war is thrilling, as long as we are united and firm in our beliefs, we will be able to protect our wealth and happiness. Let's pay attention to this currency war! Let's use wisdom and courage to meet the challenges of the future!