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For a long time, the United States, as the hegemon of the world, has relied on its strong military strength and international status to constantly interfere in the internal affairs of other countries, and act unscrupulously, as if it is the master of the earth.
Friends who like finance should have been blown up by a piece of news recently, that is, Europe and other countries announced interest rate cuts, many people may be curious, interest rate cuts will be cut, what is surprising about this, but the problem is here, Europe has always been regarded as its own backyard by the United States.
So no matter what you do, the United States has to do it first, and then Europe is doing it, take the interest rate cut as an example, according to the general situation, first the United States announced an interest rate cut, and then Europe and other countries announced interest rate cuts, but this time it was the other way around, so what is the reason for this time?
First of all, we must analyze the domestic economy in the United States, this year's official data of the US government shows that 117,000 new jobs will be created in California in the first quarter of 2024, but the California Office of Legislative Analysis said that the number of jobs in California has actually decreased by 32,000, so what is the reason for such a big gap between the two?
People who have been to the United States should know that the United States has high wages, so it has attracted many foreigners to work in the United States, and a large number of foreigners have come to the United States to engage in low-skilled and low-wage positions, which has led to an increase in the supply of the American job market, and the employment of American residents has been greatly impacted, and many American residents have lost their jobs.
Although it seems that there are people working in these positions, most of them are aliens who do not have U.S. status, and they cannot be recorded in the list if they are counted, so the data varies depending on the way they are counted.
At the same time, those unemployed Americans have no financial resources and can only use credit cards, and then they can't pay back, so it has brought a great impact on the financial situation of the United States. The data showed that US retail sales data rose by only 0.1% in May, well below expectations of 0.3%.
At the same time, the previous harvest of currency in the United States also brought some negative effects to the country, resulting in poor dollar liquidity, coupled with serious domestic inflation and insufficient purchasing power of residents, which together led to a decline in the US economy.
If the United States wants to solve these problems, it will either cut interest rates or choose to issue U.S. bonds, but at this juncture, Europe has solved its own inflation problem, and seeing that the United States has no idea of cutting interest rates, it announced it first.
In order to solve the problems of the domestic economy, the United States has no choice but to issue treasury bonds, but now that the wave of de-dollarization is rising, even Japan, the most loyal brother of the United States, is constantly selling US bonds, and which country is willing to buy US bonds? At best, it can only rely on the United Kingdom, in fact, the United States likes to issue US bonds when the US economy is in trouble.
According to statistics, in 2024, the U.S. federal debt has reached an astonishing $34.7 trillion, and it may exceed $40 trillion by the end of the year.
There is another thing that also makes the United States deflated, and that is the mess of losing this currency war. As the world's largest currency, the US dollar has brought great profits to the United States, and the United States has also increased its economic strength by harvesting currency over the years, but it did not expect to lose this harvest in Asia, first of all, its little brother Japan began to "backstab" itself.
In order to boost the value of the yen, the Bank of Japan took out 9.8 trillion foreign exchange reserve funds to save the market, and then in order to stabilize the yen exchange rate, it began to sell US bonds.
Although Japan stabbed the United States in the back, the United States still harvested the yen, the won and the rupee, so why is it said that the United States lost?
That's because although the harvest has been harvested, but the global influence of the dollar has declined, in recent years, our country has been advocating all parties in the world to join the Belt and Road, and at the same time, with Vietnam and Thailand joining the BRICS, the United States has completely shattered the idea of using control of Southeast Asia to attack the mainland, on the contrary, the mainland and Southeast Asia transactions are becoming more and more frequent.
On the one hand, the transaction can be settled without US dollars, on the other hand, it has also accelerated the process of RMB internationalization, and now with the improvement of the international status of the mainland, more and more countries choose to join the Belt and Road, which has greatly accelerated the process of RMB to the world.
At the same time, the payment method of oil has become more diversified, in the past, Saudi Arabia in order to better develop its own domestic economy, it signed an agreement with the United States on oil + dollar, which makes other countries and Saudi Arabia can only use US dollars to settle oil transactions, so that the US dollar has been firmly occupying the seat of the world's largest trading currency for so many years.
And now it is different, in addition to the dollar, the yuan, the ruble can be used as a means of settlement, so that the advantage of the dollar in the purchase of oil is gone.
In addition, with the Palestinian-Israeli conflict, Israel's bombing of Gaza has aroused the dissatisfaction of many countries, and the United States, as the mastermind behind it, is naturally dissatisfied with the people of the world, in order to pull the United States down from the position of hegemon, many countries have begun the process of de-dollarization, and the mainland can be said to stand out from the crowd, and has continuously sold US bonds in recent years, according to statistics, more than 400 billion US bonds have been sold.
And Japan also sold 37.5 billion U.S. bonds in April this year, although it was claimed to save the yen market, but who knows whether it is dissatisfied with the United States?
The United Kingdom, one of the European countries, has sold US bonds even more ferociously, and in April this year, the United Kingdom reduced its holdings of US bonds to $17.9 billion, and as the number of US bonds sold increases, the value of the dollar will continue to fall, and the influence of the dollar will also decline.
All in all, whether it is the United States interest rate cut or the currency war, it shows that the United States is now powerless, with the global pattern changing, the hegemony of the dollar is also being challenged, I believe that in the near future, we will be able to completely pull the United States into the water, let them know that this world is everyone's world, not the United States.
What are your thoughts on the U.S. currency war? Welcome to discuss in the comment area!
Information sources:
Wall Street Insights: U.S. Job Growth May Be Fake in 2023? California has exploded into a thunderstorm!