Everyone knows that debt is a forward currency. Currency is now a concept of current debt. The current beautiful country is showing a government's ability to deleverage . How did they do it?
As we all know, the most feared thing about debt is to compare it with GDP. We are not afraid of the expansion of absolute debt, but we are afraid that the asset value cannot keep up, and cash flow cannot keep up. Just like the real estate market, the amount of loans in the market has far exceeded the amount decades ago, but why do you still dare to borrow money? Because asset prices are rising, and everyone's income is also increasing. Although everyone's average debt is rising now, it is not dangerous, because debt and GDP are the proportion of the process of value creation, rather than the absolute amount, it comes from the growth of prices and substantial amounts. So beautiful countries are now facing a special environment, which is the growth rate of high GDP, as well as the high inflation and high interest rate environment. The combination of these three can trigger rapid deleveraging by the US government. Once the US government changes from a deficit to a surplus, it is equivalent to depriving residents of their savings, that is, government deficit = residents leverage leverage , and government surplus = residents deleveraging. Just like when I save money, it means someone spends money, and vice versa.
USD is an international currency. How did the US government cut leeks? The US government's deleveraging is not based on deleveraging American households, but targeting global enterprises and residents with dollar deposits to cut leeks. Therefore, whether the intrinsic value of the US dollar will continue to rise has already escaped the interest rate issue. But with the acceleration of deleveraging and internal growth, including the rise in GDP and interest rates, it is pushing up. In the past, we believed that the bright-eyed interest rate affected the value of the US dollar, but now we can conclude that behind the nominal interest rate is high inflation, which has pushed up the acceleration of nominal GDP and further accelerated the process of US deleveraging. The United States' deleveraging, fiscal surplus, and debt stocks decrease. Judging from the dilution of purchasing power, global investors and global producers share the responsibility. This is the biggest thrust for the US dollar to continue to hit highs in the next wave. Finally, let's wait and see.
