[Editor's Note] This article is authorized by the author and reprinted from the official account "Chiaoyang Shaoxia". There are many wonderful things, welcome to follow.
Recently, the US media frequently exposed that Biden will soon decide to cancel the tariffs imposed on US$10 billion in Chinese goods imported to the United States, and continue to use the "301 clause " to launch a new blow to China's battery, semiconductor and other industries.
▲The trade war initiated by the US government not only failed to stop China's economic development, but also hurt the US economy like a boomerang. (Comic | Liu Rui)
In 2018, the Trump administration blatantly imposed a large-scale tax on Chinese goods based on the so-called "Section 301". Four years have passed, and the two tariffs expired in July and August this year respectively. The United States obviously did not achieve the goal of reversing the deficit and making the United States "great again".
Not only that, China's exports to the United States increased by 27.5% in 2021, and the trade surplus with the United States reached US$396.5 billion, far higher than the US$323.3 billion before the outbreak of the trade war. The tariff "stick" that the United States has finally fallen on the heads of its own consumers.
▲In June 2022, US Treasury Secretary Yellen said that some tariffs on China during the Trump era were "strategic" and instead increased the costs of American consumers.
Although U.S. Trade Representative Dai Qi insisted that "the important bargaining chip on China should not be given up", it still cannot stop the calls from all walks of life in the United States to cancel taxes. More than 300 American manufacturers jointly wrote a letter to Biden, demanding that the additional tariffs be terminated to protect corporate competitiveness. Economist and former Treasury Secretary Summers urged the White House to cancel tariffs as much as possible to cope with domestic inflation. Treasury Secretary Yellen criticized the Trump administration's tariffs on China for lack of strategic significance. The US Economic Review Report launched by the International Monetary Fund (IMF) also recommends the cancellation of tariffs on China. The editorial of " Wall Street Journal " stated that tariffs on China are like a blunt weapon, which harms Americans more than China.
▲ Behind the US economy is a more serious social problem. The people held up the slogan "This is not just an economic problem, but also a deception, lies, theft, betrayal, and corruption"
30 years ago, the Democratic presidential candidate Clinton once put out a loud slogan: "Idiot, the problem is the economy!" This sentence can be given to the Democratic government intact. Instead of weighing how to use tariff chips to curb China, the United States should first treat its own economy.
One look at the US economy:
Inflation "High fever does not fade"
If the US economy wants to go to the doctor, it must first be a fever clinic. The US Consumer Price Index (CPI) averaged over 8% from March to May 2022, and rose to 9.1% in June, a record high in 41 years. Treasury Secretary Yellen bluntly stated that it was "unacceptable."
▲In June 2022, the US consumer price index soared to 9.1%, a 41-year high. (Source | U.S. Department of Labor)
High prices have become the most important factor affecting the U.S. midterm election this year. Inversely, Biden's approval rating has been "falling" all the way. Civiqs polls show that Biden's approval rating has dropped to 30%, the decline is so big and fast, the highest for presidents since World War II. Among young voters aged 18 to 34, only 21% support Biden. As many as 57% of people are not satisfied with Biden's work performance.
Faced with the inflation rate that has not been seen in decades, the Federal Reserve has a trend of "let the storm come more violently", and has launched the rate hike that has not been seen in the past 30 years - a single rate hike of 75 basis points.
However, everyone remembers that when the inflation rate rose rapidly last year, it was the Federal Reserve who promoted the "temporary theory of inflation". When the inflation rate fluctuated at a high level in the first quarter of this year, it was the Federal Reserve who promoted the "peak theory of inflation". The Federal Reserve recognizes the speed of inflation and adjustment of policies, which is far from keeping up with the speed of inflation itself development and evolution.
▲As US inflation continues to soar, prices remain high, and the outside world's concerns about a recession in the US economy are also increasing.
As former U.S. Treasury Secretary Summers said, “The Fed’s work is like twisting the temperature of a shower faucet in an old hotel.All movements have a delay of twenty or thirty seconds. If you think the water is not hot enough, twist it to the left, there is no movement, and twist it again, there is no movement, and twist it again, and then you scream and jump out of the bathtub. "
Deutsche Federal Bank former governor Carl said, "Inflation is like toothpaste. Once it comes out of the tube, it is difficult to take it back. "Can the Fed raise interest rates vigorously at this time really cure the symptoms of the US economy? To answer this question, you must first know why the US economy is "fever".
Since the outbreak of the new crown epidemic, the Fed has started a round of unbottomed liquidity. Its balance sheet has expanded from US$4.17 trillion to US$8.76 trillion in two years, equivalent to an average annual issuance of 44% of the currency.
▲As the Fed takes more radical measures to deal with inflation, more and more economists believe that the risk of the US economy falling into recession is rising.
money stimulus should be an emergency means to reverse the recession, but the Fed has long-termized this short-term strategy. The huge pool of various asset classes has failed to fully absorb the additional currency, but the flood has flooded but nowhere to leak it. Hong, prices can only rise higher.
" Financial Times " published an article pointing out that the current inflation in the United States is not only a monetary phenomenon, but also closely related to supply factors. The new crown epidemic, the Ukrainian crisis, coupled with the trade war of decoupling and chain breaking, the normal operation of the international supply chain has been disturbed, and it has also pushed up prices from the supply side.
The debt problem of the United States is a shadow behind the interest rate hike. The scale of US Treasury bonds has exceeded US$30.3 trillion, with the deficit ratio of in the 2020 and 2021 fiscal year deficit ratios were 14.9% and 12.4% respectively. The total federal debt remains above 130% of GDP, setting a record since 1945. The rapid interest rate hike of the Federal Reserve will undoubtedly intensify the pressure on treasury debt repayment The strength may even make the US government "close" again.
The Fed's uncontrollable release of water once created the so-called "strong recovery" of the US economy. However, when the tide recedes, we can only see who is swimming naked. The US economy fell by 1.6% in the first quarter of this year, opening the prelude to economic contraction.
Bridgewater Fund founder Rui Dalio pointed out that without causing economic weakness, the Fed will not be able to take any measures to fight inflation. Wall Street giant JPMorgan Chase general manager Jamie Dimon predicts that an economic "hurricane" is coming. US stock Nasdaq index closed down in 12 weeks in the past 15 weeks, with its market value falling by 1/4.
In addition, the impact of Fed rate hike on a global scale is also huge. The appreciation of the US dollar has caused a large amount of capital to flow into the United States, and what is harvesting is the world's leeks. Recently, the euro-dollar exchange rate has reached nearly 1:1. The European allies of the United States may have to be forced to shorten the time for bathing this winter. A warm reminder - don't wash in the "old Fed hotel", a scalp will be a scar...
2 Discover the US economy:
Industrial development "tumour is abnormal"
Inflation in the United States is high and the economy is in recession, but a few industries still maintain wild growth, like tumors, eroding nutrients from the body of the US economy without restraint, feeding a few capital, and harming the general public.
The financial industry is a typical example of abnormal development, accounting for more than 20% of the national economy. For a long time, the United States has relied on its dominant position as the world's major trade settlement currency and reserve currency. By issuing US dollars indiscriminately, it can charge the world seigniorage , and it makes money by sitting on the sofa and eating potato chips.
The huge dollar foreign exchange reserves held by various countries often return to the US market in the form of purchasing US dollar bonds; while US capital injects these funds into high-return investment projects in emerging economies represented by China to obtain high returns. In this way, Wall Street occupied a large amount of social resources in the United States, and even kidnapped economic policies on the grounds that it was "too big to fail", forcing the US government to take action to save large enterprises in the financial crisis.
▲The American movie " Wolf of Wall Street " tells the story of Wall Street legend Jordan Belford. The scene where the protagonist played by actor Leonardo is a microcosm of Wall Street's elite life.
Financial tycoons continue to conduct political lobbying and contribute political contributions. Their agents are senior executives and go into politics when they go out, firmly binding themselves with the US government. The unhealthy development of the financial industry has exacerbated the gap between the rich and the poor in society. According to research by economist Piketty, the return on capital in the United States has long been higher than the economic growth rate, which has led to increasingly concentrated social wealth in a few people. The wealth of 1% of the rich in the United States has exceeded the total wealth of the bottom 90% of the population.
The medical industry is also a major "tumor". In 2021, the medical and health expenditure in the United States has reached 18% of GDP, while the average of the world's major developed economies is only 8.8%. However, high health expenditures do not mean that Americans' health is better cared for. On the contrary, the average life expectancy in the United States has dropped from 78.86 years in 2019 to 76.6 years in 2021, which is lower than that in China. For ordinary Americans, high-quality and inexpensive medical services, they can only quench their thirst.
▲The percentage of US medical and health expenditure in GDP far exceeds the world average. (Source | World Bank)
The reason is that the private medical industry in the United States is a powerful interest group, ranking among the top in the field of political lobbying. Through one "irrefutable condition" after another, the government's efforts to expand the coverage of medical insurance and compress the profit margins of the medical industry. The results of the "Obamacare reform" that were difficult to pass were even written off by the Trump administration. If you are sick and make money, only God knows whether the treatment is good or not.
The military industry is even more inflated. The U.S. military budget in 2022 has reached US$770 billion, accounting for 40% of global military expenditure. Although the United States has strong military power, how much money does the taxpayer spend on the knife?
▲The percentage of US military expenditure in GDP far exceeds the world average. (Source | World Bank)
25,000-ton dock landing ship , a US Navy ship cost US$1.46 billion, more than ten times the cost of the Chinese Navy's landing ship , which is equivalent to the tonnage of the tonnage of the Chinese Navy.
US military invested Afghanistan in 20 to $2.26 trillion, and the average daily expense of $300 million was not able to escape the fate of hasty evacuation. Pentagon was also revealed to have spent $6 million to air transport nine goats from Italy to Afghanistan, in the name of supporting Afghan animal husbandry, but the sky-high lambs were not adapted to the local environment and died early.
Former US President Eisenhower once warned the American people to be wary of the harm brought by the "monster" of military-industrial complex . More than half a century has passed, and today there are still lobbying groups of more than 4,000 military-industrial complexes active in the American political arena, spending huge amounts of money to lobby American politicians, fund so-called policy experts, and shape the US defense policy.
Under their influence, the Pentagon has been constantly issuing white papers to exaggerate security threats. The US government is looking for enemies and provoking troubles all over the world under the guise of maintaining "national security" and promoting "democracy and freedom". In the books of the continuous increase in military expenditure, behind a series of wars such as Afghanistan and Iraqi , under the crazy words of "fighting to the last Ukrainian ", the US military-industrial complex won the battle, but the people of the world were cheated.
Three Explorations of the US economy:
Economic structure "hemiplegia"
The United States is indeed still an economic giant, but it has become a "mud foot giant".
The United States once had a strong manufacturing industry, but after the collapse of Bretton Woods system, the United States lie on the credit book and allows US dollar capital to expand in disorderly around the world, as if it is a golden collar with disdain to swing a hoe, and capital and production are further separated.
▲From 2000 to 2020, the proportion of US manufacturing in total GDP continued to decline. (Source | World Bank)
For fifty years, the US manufacturing industry has gone from "strong body" to " four-body lack of effort" to "shrinking limbs". Many industrial cities with unlimited glory in the past have long since become " rust belt ". Although the US government has expressed its determination to revive the manufacturing industry, even if it uses all its strengths, the manufacturing industry's production capacity has declined.
▲ "City of Automobile" Detroit's prosperous manufacturing industry once supported the US economy in the 20th century, but now a large number of factories have been closed and have become a "rust belt" city.
With the outflow of manufacturing, the proportion of service industry in the US economic structure has been rising, and it has now exceeded 80%. A large part of them are non-tradable goods, which are essentially mutual transfers of domestic wealth rather than creation of wealth.
▲In 2020, the US service industry accounted for more than 80% of the total GDP. (Source | World Bank)
When the supply of goods encounters a bottleneck and there is a shortage of infant formula, these "fat" GDP is useless at all, so the Biden administration has to launch the " National Defense Production Law " to force intervention in the market. The United States itself fell into the abyss, and the "invisible hand" could not be retrieved.
The shrinking of US manufacturing capacity and excessive virtualization of economic structure damage the internal circulation of the US economy, the long-term competitiveness of the US economy, and the impact of the shelves and vegetable baskets of American people. Baby milk powder will never be the last product to be short of.
▲In May 2022, the United States encountered an infant formula crisis. The shortage rate of milk powder in the United States in the first week of May was as high as 43%, and the price soared by 18% compared with the same period last year.
" Han Feizi " records a story: During the Warring States Period, the miracle doctor Bian Que , three-sight Duke Cai Huan , respectively pointed out that Duke Cai Huan had already entered the texture, the muscles, and the stomach. Duke Cai Huan ignored it and finally died.
Three After exploring the US economy, we found that the US economy has weak heat inside, swollen outside, and atrophy of limbs, but it only hikes interest rates. I am afraid that Ming Guangzong took red pills - he was afraid that his life would be long. As economist Judy Sheldon said, if rate hikes become the only thing the Fed can do, the real problem cannot be solved.
Some American politicians turn a blind eye to their problems, but only want to turn the blame and curb China. But no matter how these politicians pass the blame, the economic laws are there. If the Biden administration allows internal lesions to deteriorate while manipulating tariffs on China, it will be hit by economic laws and will eventually have to cut off the flesh and remove the disease. Sadly, it was never the politician elites who were sucked by bones.
▲In recent years, the average life expectancy in the United States has been declining year by year. (Source | University of Colorado Sociology Research Report)
China's development can withstand the wind and rain, and the strong performance of export trade data is proof of it. The US tariffs are the "Sword of Damocles" placed on the Biden administration. They cannot scare the Chinese and cannot scare the Chinese. The only thing that is scared is the United States itself.
The essence of Sino-US relations is mutual benefit and win-win. The key to solving the US economic dilemma lies in letting go of arrogance and prejudice, regaining rationality and pragmatism, abolishing unreasonable tariffs on China, seeking a rebalancing between the US's capital and technological factors and China's production capacity, and reconstructing the economic and trade relations that China and the United States have achieved mutual success.
is now at this time. The White House must think clearly whether to take the blade or hold the key in your hand.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-