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«——[·Preface·] ——»
The United States has always been regarded as a shining star on the world stage, especially the United States claims to be a world hegemonic country, and its hegemonic position in the financial field is not easy to shake.
All countries in the world are very jealous of the United States, and even accustomed to the hegemonic position of the United States, but a recent news brought the United States to the cusp overnight.
The 5.9 trillion assets of the United States were evaporated overnight and even reharvested, what is the matter?
Netizens started a heated discussion that the US economy has suffered an unprecedented blow, and small and medium-sized banks in the United States may face bankruptcy.
Even if Wall Street's financial giants come, there is no way to successfully complete the harvest.
In this battle, the United States has already lost and will even be counter-harvested.
First, the current state of the US economy
In recent years, the US economic downturn has been very serious, and it is not only the people who are panicked. Even countries around the world are very concerned about the economic development of the United States, and they are holding a wait-and-see attitude.
Because the dollar is the world's currency, many countries have bought U.S. Treasury bonds. But as things stand, the Fed has raised the zero interest rate to more than 5%, and the Fed's interest rate hike policy has not been as effective as expected.
The United States originally wanted to control inflation by raising interest rates, but if you compare the consumer price index with last year's 9.1%, this year's US consumer price index has fallen a lot.
This set of year-on-year data can be seen that the market price growth has slowed down this year, but the month-on-month data has not declined.
The year-on-year decline is only because last year's base is already very high. The United States is most affected by inflation by businesses and consumers. The pressure on businesses is too great.
Especially for some enterprises that rely on imported raw materials and products, for them, the production cost is higher, the cost increases, and the final consumer will buy the product price will be more expensive.
If this continues in the long run, a vicious circle will be formed.
For consumers, it is not cost-effective to buy cost-effective products at affordable prices, but now they have to buy them for more money.
Many people have begun to question the Fed's series of policies, can the government's announcement of interest rate hikes really curb inflation? Wouldn't excessively high interest rates be counterproductive?
If consumers' purchasing power declines, won't the economy weaken further?
Second, small and medium-sized banks in the United States face bankruptcy
The Fed's big policy of raising interest rates is most under pressure from some small and medium-sized banks.
In March and May of this year, some small and medium-sized banks in the United States went bankrupt.
Because the state raised interest rates, the cost of capital for these banks increased, and defaults on loans climbed.
More residents may need fewer loans, put money in banks, and pay more interest on deposits when due.
If this continues, banks' balance sheets are bound to have problems, and capital flows are not as active as before.
It is very likely that many more people are depositing than taking loans, which is impossible for small and medium-sized banks to maintain normal operations.
Small and medium-sized banks can't move, so the large banks seem to see this opportunity to successfully acquire some small and medium-sized banks.
The big banks have harvested all the assets and customers of these small and medium-sized banks at a lower price, seemingly making a wave of profits, but the long-term risks they face have only just begun.
Why do you say that?
Because this harvest has many drawbacks, because small and medium-sized banks themselves provide financial services for more small and medium-sized enterprises and communities.
If these small banks disappear, credit markets will become more concentrated.
To put it simply, those large banks do not have much energy to serve, those small enterprises or individuals with small loan amounts.
SME lending will become more difficult and subject to more restrictions.
The bankruptcy of small and medium-sized banks means that credit will be tightened even more, and the real economy will encounter unprecedented difficulties.
Especially in the case of high interest rates and high inflation in the United States, it is inevitable that small and medium-sized enterprises urgently need funds, but the needs of large banks for some small and medium-sized enterprise loans may not be well balanced.
In this case, once the capital chain of small and medium-sized enterprises is broken, then the factory production and the normal operation of the company will be stopped.
Some low-income families want to take out loans, which are obviously impossible according to large bank loans, and their lives will be even more difficult.
Some of the big banks on Wall Street in the United States seem to be profitable at this time, but after all, it is not a long-term solution.
The actions of these big banks will have a negative impact on the entire real economy and social structure of the United States.
Most likely he lifted a stone and hit himself in the foot.
Third, 5.9 trillion assets evaporated at once?
The major and small banks in the United States are facing bankruptcy, and the real economy of the United States is also dying, but I did not expect that at this time, the US stock market also had turmoil.
In the past 2022, the total amount of private wealth in the United States shrank by $5.9 trillion, which is the largest amount in the world.
The U.S. stock market has fallen sharply, and many Americans have lost a lot of money investing in the stock market last year.
Although the stock market has rebounded somewhat this year, this volatility has not brought any real gains to these investors.
Because a large number of retail investors have begun to re-enter the stock market, but there are too many uncertainties for retail investors themselves, they may not be well aware of the risks facing the stock market today.
If you follow the trend into the stock market, it is easy to create an asset bubble.
epilogue
In just a few short years, the US economy has had so many problems at once, the interest rate hike policy has failed to curb inflation well, major small and medium-sized banks seem to have ushered in a wave of bankruptcy, and the wealth of the American people has shrunk again.
All these things seem to argue that US financial hegemony is not guaranteed, and that the US is also facing the risk of credit downgrade.
Once Wall Street capitalists pinned their last hopes on raising interest rates to complete the global harvest, but it is clear that the harvest in the United States is self-reaping, and it will eventually be eaten back.
What do you think about this?
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