The United States started a currency war, the Asian market situation is critical, China stabilizes the market and takes decisive countermeasures, Wall Street fails to harvest, who will kill in this financial war between China and the United States?
Under the U.S. interest rate hike policy of more than 5%, the proportion of interest repayment in the United States has increased sharply, especially under the high fiscal deficit of the Biden administration, the Federal Reserve has issued a voice of surrender calling for interest rate cuts, but if the United States cuts interest rates at this time, it is equivalent to working in vain. Against this backdrop, the U.S. has been clamoring to continue to raise interest rates to 8%, while starting the harvest to "regain blood" for itself. In the exchange rate market, Japan's yen exchange rate has collapsed recently, falling below the 153 mark, and the South Korean exchange rate has also plummeted, with the South Korean won depreciating by as much as 7%, and the yuan has also suffered a certain impact.
Japan and South Korea are loyal allies of the United States, but they are also the weakest countries in the currency war. Take Japan as an example, the current total debt has been nearly 10 trillion US dollars, and its total economic output is only about 4.2 trillion US dollars, under the huge debt pressure, Japan's government bond interest rate has remained at 0% for a long time, that is, there is no pressure to repay interest, the Japanese government only needs to "tear down the east wall to make up the west wall" to borrow new to repay the old way to maintain operation. However, as the Federal Reserve continues to raise interest rates, a large number of yen has been converted into dollars and flowed into the U.S. capital market, the yen exchange rate has collapsed and depreciated rapidly, coupled with Japan's liberal policy of international capital, it can be said that the United States has harvested Japan as easily, and South Korea is the same.
Against this backdrop, Wall Street capital began to short Japan aggressively. As of the first week of April, the net amount of yen airdrops held by global hedge funds and asset management companies was as high as 148,388, reaching the highest level in nearly 20 years, and the practice of the "international air force" accelerated the depreciation of the yen, while the U.S. capital led by Warren Buffett was heavily invested in the Japanese stock market, and the Nikkei index rose all the way to 41,000 points. This is in line with the old adage that it is dangerous to be an enemy of the United States, but it is deadly to be an ally of the United States.
Compared with Japan and South Korea, although the exchange rate of the renminbi has fallen slightly, it is generally within a controllable range, which is not only due to China's huge foreign exchange reserves, but also inseparable from China's financial "firewall", and it is almost impossible for the United States to harvest China. In addition, in response to the financial war launched by the United States, China aimed at the pain points of the United States, and sold a total of 41.3 billion US bonds in January and February this year, which had a certain impact on the debt crisis of the United States. Under the easing of the situation in the Middle East and the Federal Reserve's interest rate hike signal, gold prices have plummeted, and the vitality of the dollar has recovered, but the United States has just passed tens of billions of dollars in aid to Ukraine and Israel.
The financial war is a war without gunpowder, but its destructive power and intensity are no less than that of a hot war, the United States has come to the last moment under the increasingly high interest rate hike policy, and opened the prelude to the harvest in advance, for China, only to maintain a high degree of strategic determination, adhere to the last "hard days", in order to have the last laugh.