The harvester of the world: US dollars

1. The history of the US dollar

As the emperor of Showa sounded on the radio, the Second World War ended.

In this war, the United States became the biggest winner. It developed its military manufacturing industry vigorously and made a fortune from the war. 85% of the world's gold flowed into the United States and the United States became a big gold country.

In order to use the gold in its hands for profit, the United States proposed the White Plan . In the White Plan, the U.S. dollar is indirectly linked to gold through the new currency unit Uninet. 1 Uninet can be exchanged for 10 US dollars or 8.8g. Gold, the exchange rate is stable and must not depreciate.

is essentially still the old set of gold standard system . It is nothing more than adding a new currency unit, Unita, between gold and the U.S. dollar, which indirectly affects the price of gold through its connection with the U.S. dollar.

During the same period, in order to maintain the position of the British pound in international settlements, the old rival, the United Kingdom, proposed the Keynes plan, which mainly wanted to weaken the position of gold in international trade.

Afterwards, in order to regulate the post-war international financial order, representatives of 44 countries attended the Bretton Woods meeting in New Hampshire, USA . Although the United Kingdom showed the limelight at the negotiating table, it could not be worthwhile to play well. With hard fists, the British plan was severely rejected at the meeting.

finally,Representatives of 22 countries and regions signed the Bretton Woods Agreement in the United States. The system is based on gold. The U.S. dollar is used as the international trade storage currency. The U.S. dollar is directly linked to gold, and the exchange rates of other countries are directly linked to the U.S. dollar. Subsequently, the International Monetary Fund, World Bank, and were established in succession. Since then, the world status of the US dollar has been basically established.

But the shortcomings of the gold standard system have not disappeared. The 10-year Vietnam War , a large number of military expenditures, caused the U.S. dollar exchange rate to fluctuate sharply, and the international reputation fell sharply. As a result of economic fluctuations, a large number of countries began to sell foreign exchange and exchanged for value-preserving gold. The dollar crisis broke out. With the continuous decline of gold holdings, the Federal Reserve issued a large number of U.S. dollars to depreciate the U.S. dollar, which indirectly impacted international finance. market.

To consolidate the status of the U.S. dollar, Nixon launched a new economic policy that froze all foreign gold transactions on the grounds of threatening the financial order, causing strong dissatisfaction with countries around the world, and the Bretton Woods system began to collapse , gold standard system ends here .

After the United States stopped exchanging US dollars for gold,US President Nixon agreed to provide arms and protection to Saudi Arabia on the condition that all Saudi Arabia’s oil transactions must be settled in U.S. dollars .

Since Saudi Arabia is the largest oil producer in OPEC and the world’s largest oil exporter, other countries soon adopted the U.S. dollar for oil transactions. The petro-dollar system has since been established and has continued to this day.

Today, the US gold reserves account for more than 70% of the world's gold reserves, and the US dollar accounts for 62% of the global assets. The exchange rate of various countries is still pegged to the U.S. dollar, and the U.S. dollar is still the main currency in international transactions.

The United States masters the core technology of many industries and fields, so in the product manufacturing process, most countries have to do business with the United States.

At the same time, petrodollars and strong military power also escort the U.S. dollar, and countries around the world have to bear the ills brought about by U.S. dollar transactions.

2. The dollar harvests the world

To understand the status of the dollar in the world, let’s take a look at how the dollar harvests the world.

(1) The first step is ,Crazy printing money, throwing money in the global currency market.

Because of the US dollar’s ​​status as a world currency, the money that the United States spills will not stay in the United States and will not cause inflation in the country. These over-issued currencies will quickly be converted into reserve currencies of other countries and exchanged back to the United States. The resources and materials needed to meet the needs of the United States during the recession.

As long as the U.S. dollar is in place for one day, all countries in the world have to pay for the U.S. dollar, which will drag the U.S. economy up.

And this extra dollar flows to countries around the world like a scourge. The prices of various assets have begun to rise sharply, from the stock market to the property market, to the international food prices and then to the prices of various raw materials.

After the financial crisis in 2008, hot dollar money quickly flowed into the Chinese real estate market, and then a large number of rich real estate owners such as Wang Jianlin and Xu Jiayin were overdrawn by high housing prices.

my country has adopted a policy of not housing speculation in 2020, and a large amount of hot money from the United States flows to Turkey, Brazil and India. In 2020 alone, huge amounts of US dollars poured into Brazil, and Brazil's housing prices skyrocketed.

This means that you can buy a house after 15 years of working in Brazil, but now it will take at least 20 years, because the money in your hand has greatly depreciated and is worthless.

However, rich Brazilians who hold a large amount of real estate in their hands have achieved an increase in wealth, because the wage level of the people will never catch up with the increase in house prices, and the result is that the rich get richer. The poor become poorer.

The American holds the dollar paper,In exchange for real gold and silver in the world, leaving a place in other countries. The matter is far from over.

(2) The second step is , and the dollar is recovered.

After the global blood sucking, the US economy began to pick up. Recently, the US economy has shown signs of recovery. Vaccines have been widely vaccinated, factories have started, workers have been employed, and the US economy has come back to life.

The United States has opened a new harvest mode: interest rate hike. We have to know that when the US dollar was thrown out, not only interest was not required, but it may not even be the principal.

Now you deposit US dollars in the United States, and the US government pays you interest. Anyone will use the money to exchange US dollars to buy US debt.

Just imagine that Brazil's housing prices are too high by the United States. The possibility of Brazil's housing prices rising is very small, because there is no new dollar entering, housing prices are likely to fall.

At the same time, U.S. Treasuries start to raise interest rates. You will immediately throw away the Brazilian real estate in your hands, make a wave of price differences, and then buy U.S. Treasury bonds and settle interest rates. It is another happy day! The Turk successfully became the successor.

Other commodities are the same. When the price reaches a high level, it is almost time for the dollar to harvest.

By this time, the currencies of all countries in the world have switched to U.S. dollars to buy U.S. bonds, and the U.S. dollar has become the hard currency of the world. The U.S. dollar appreciates, and the local currency of other countries depreciates The U.S. dollar has returned to the United States and harvested another wave of countries around the world, bringing high inflation and currency depreciation to other countries.

(3) The third step , the world was crazy to buy, buy, buy

The US economy came back to the strong world, and the company quickly returned to the blood. Acquire high-quality companies.

Koreans spend their entire lives working for Samsung, while Samsung's life is indeed working for the United States. After the Asian financial crisis, the Korean real estate bubble burst and Samsung was forced to sell itself to the United States. About 54% of Samsung's equity is controlled by the United States, and Koreans have since been working for American workers.

In order to avoid repeating the mistakes of South Korea, Brazil must raise interest rates in advance to keep the US dollar in the country, but how can you keep the international hot money? A large amount of capital has fled, frantically buying U.S. debt, and at the same time consuming interest while preserving its value. Brazil's stock market, property market, and foreign exchange are facing a crash across the board.

The rich take money and run away, the dollar returns, and the poor have nowhere to go. They have become the ultimate leek for the dollar to harvest the world.

The road to dollar harvesting can be described as a goose plucking the hair, draining the last penny in your pocket, and not even a bone residue will be left for you. How cruel and rough this is!

3. What should China do

Among the two largest assets in my country, one of them is foreign exchange.

decades of reform and opening up,Working people have accumulated US$3.2 trillion with their hard work and hard work. As one of the world’s largest foreign exchange reserves, the money printing machine that has not paid for decades equals the US's 5.8 trillion yuan.

In the past, we could only watch the depreciation of the U.S. dollar and were forced to depreciate the renminbi. We exchanged a lot of goods for the water-infused U.S. dollar and became American wage earners. Not only that, but also facing US sanctions and prohibiting us from exporting high-tech products.

We made a change.

First of all, is to strengthen the domestic economic cycle, allowing the people to spend more to stimulate the economy. At the same time, we should curb housing prices and prevent high housing prices from continuing to compress the consumption level of ordinary people.

Followed by , in the context of currency depreciation around the world, the renminbi appreciates and does not follow the monetary policy of the United States, and M2 will fall back appropriately.

and then , reduce production capacity, control the surplus, increase product prices by restricting production, and alleviate the impact of the depreciation of the dollar.

Finally, foreign exchange controls are still not relaxed. There is a limit to the outflow of hot dollars from China to prevent capital flight and protect the basic market of China's economy.

4. Enlightenment for us

So far,The US dollar is no longer the only choice for investors, and the renminbi can also be the best choice for everyone.

In the context of the epidemic, the Sino-US trade war has intensified. my country can still stand tall and the RMB is still strong. It also shows that the country has made certain breakthroughs in the fields of industry, technology, and military. If you blindly follow and don't follow, you should always have your own judgment, and don't lose confidence in the country because of the existence of China's collapse theory.

The US dollar is not a panacea, and the renminbi is also constantly rising. Only by calmly analyzing various domestic and international forms and judging the investment direction in depth is a good choice for everyone. The foreign exchange market is constantly changing, and the crowds are also undesirable, so calm analysis is the most important thing.

In this great economic harvest, each of us will be both prosperous and prosperous with our country. We can have less complaints about the country and a better understanding. It has some areas where it is not doing well, but we are still trying to persevere. Understanding the policy is also understanding the country. It is worthy of our admiration for its unwillingness to follow South Korea’s old path. It’s time to give With a little encouragement, let the motherland go further!

Okay, that’s all for this issue. If you have anything to say and communicate with each other, please leave a message below~

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