When Zimbabwe in southern Africa is still struggling with GDP per capita of 60 cents, America across the ocean has already bombarded the printing machine with a shocking sound and immersed in the happiness of "freedom of printing money".
says "freedom of printing money" is not an exaggeration. Since 2008, the United States has opened up a hole in printing money crazy. Round after round of QE has allowed the United States to taste the sweetness of "profit and profit".
20, the new crown epidemic broke out around the world, and the speed of printing money in the United States was like a wild horse that had been broken. The surging dollar flowed into the market. In this year alone, the scale of printing money in the Federal Reserve has reached 3.21 trillion US dollars, and the total assets and liabilities have reached 7.34 trillion US dollars. Such crazy printing moves will normally cause inflation and even an economic collapse.
But, surprisingly, this did not happen to the United States, there was no serious inflation, and the dollar did not collapse.
Whether it is the financial crisis in 2008 or the stimulus of the epidemic in 2020, under the two rounds of crazy printing of money, the inflation rate has always been in a moderate range. Even under the impact of the epidemic, the economic shrinkage of the United States is much better than that of Germany, Japan, India and other countries.
This money game that made the United States enjoy playing has not only achieved the goal of "money making money", but also successfully avoided the side effects and passed on the economic crisis . Compared with those countries in history that the economy collapsed due to inflation and finally became infamous, the United States seems to have brought the "halo of a male lead".
So, the question is, why do we print money, and others lose everything, but the United States can escape unscathed and even enjoy profits?
can't even hit the credit of the US dollar if unlimited printing of money and debt defaults. Is the hegemony of the US dollar really unsolved?
Global Payment Deinflation wishful thinking
The United States has printed so much money, why is there no inflation?
First of all, let’s take a look at the flow direction. Everyone knows that when storing water into the pool, if the water inlet is pouring water vigorously but does not overflow, there must be a large-displacement water outlet. So, specifically for the US dollar, where did these crazy-printed banknotes flow?
In fact, most of the over-issued US dollars flows to various financial assets for the accumulation and pursuit of paper assets, while only a small part flows to the real economy, as well as the purchase of consumer goods and means of production. This small part is not enough to cause any waves, so many people do not feel that the country has vicious inflation.
financial system is like a fluffy sponge, playing an important role in absorbing money. Among various financial assets, banks, real estate, stocks and other industries are undoubtedly "big money users". This can also be seen from the soaring yields of US stocks .
A large amount of inflow of US dollars has injected live water into the banking system. Through the continuous shrinkage of credit, the US dollar in circulation has been greatly reduced. In this way, the excess banknotes are well digested. In addition, a large part of the US dollar has flowed overseas. For a long time, the US dollar has gradually established a "hegemony" internationally. When a crisis strikes, global demand for the US dollar will not decline but rise.
Its role as a "safe haven" has also made the US dollar a hot item in a special period. Secondly, the United States dares to print money unlimitedly, which must also consider the domestic demand situation. Looking at the current social situation in the United States, the real economy is in a downturn and the unemployment rate has risen sharply, and the decline in total demand is coming.
has fewer ways to make money, so naturally I am reluctant to spend money in my pocket. In this way, even if the US dollar is overprinted, the amount of currencies circulating in the market has not increased, and it is difficult to get inflation. In the present of global economic integration , all countries are tightly tied together, and the United States is naturally well aware of this relationship, so naturally they are fearless.
transfers the inflation crisis to the whole world, and he is at ease and has a good plan to move flowers and trees.
mentioned earlier the soaring unemployment rate in the United States. Due to the impact of the epidemic, the number of unemployed people in the United States exceeded 500,000, breaking the peak in the past two decades. The emergence of this phenomenon is attributed to the increase in unemployment benefits.
You should know that normally, an ordinary worker’s monthly salary is about US$3,200, while an unemployed worker can receive US$1,050 per week. In other words, as long as you declare unemployment, you can get about RMB 28,000 in a month. This unemployed person is much more "earning" than working.
has such a advantage. Who would still want to work for others? Seeing this, if you have the idea of "America is over", it would be too naive.
Because the United States prints money crazy to attract disasters. Even if Americans are lying at home and are salted fish, they can still receive high unemployment benefits. In the short term, it will not have any major impact on their own economy, but the people around the world are in trouble and they have to pay for the unemployment benefits of Americans.
US dollar hegemony. The unshakable discourse sovereignty
makes the United States dare to print money without restrictions, which largely comes from the hegemony of the US dollar. In fact, the US dollar has gone from an ordinary currency to establishing a "dominant position" thanks to its relationship with gold and oil.
Let’s talk about gold first. We often hear people calling the US dollar as US dollar. The "gold" in this US dollar refers to gold. The origin of the US dollar and gold can be traced back to the -war period. At that time, European countries were busy plundering resources in the war, but were unwilling to formulate gold standards. While the "tiger" was not at home, the Federal Reserve successfully picked up a leak. What was unexpected was that on weekdays, this inconspicuous little brother held a superior heart and broke the gold standard. Until after in World War II, the United States' ambitions were completely exposed and it established a gold standard monetary system based on the US dollar, which is the famous Bretton Woods system .
According to this system, 35 US dollars can be exchanged for 1 ounce of gold, and this standard has also become a fixed proportion. The Federal Reserve provides governments with US dollars to gold. Under this rule, the reserves of gold also demonstrate a country's absolute strength, and the credit of the US dollar has also successfully laid the foundation for this stage.
According to statistics, the United States' gold reserves at its peak after World War II were as high as US$24.6 billion, which is about 73.4% of the total reserves of the entire Western world. Such a high reserve amount allowed the United States to take advantage of it, and an ordinary dollar has since become a hard currency circulating around the world.
However, gold is not the same as paper money. You can print as much as you want. The non-renewable nature of gold has also caused cracks in the original Bretton Woods system. As time comes, a large amount of gold was redeemed by European countries, and with more and more dollars being printed, the actual purchasing power gradually depreciated, and the United States' foreign trade deficit is getting bigger.
The problem of Triffen, which is a headache, is facing the Federal Reserve. The rapid decline in gold reserves has made the original gold exchange ratio of US dollar and gold in danger. Finally, in 1971, the United States, which was at the end of its strength, had to announce that it would stop exchanging gold to the outside world. The US dollar and gold were officially decoupled and loosened. At this point, the Bretton Woods system also collapsed.
The US national credit fell hard and was smashed. The dollar crisis was triggered. In this stage of review, it is not difficult to find that the establishment of the Bretton Woods system paved the way for future US dollar hegemony, making the US dollar the dominant in the international monetary system , but this system also has flaws. The binding between the US dollar and gold also means that the United States cannot print money unlimitedly. For every extra 35 dollars printed, it will take 1 ounce of gold.
After the system collapsed, the smart United States did not give up looking for alternatives to gold to ensure the dominance of the US dollar. Soon, "black gold" oil became the new fulcrum of the US dollar.
How important is oil?
In 1973, the Middle East War of broke out, and the price of oil took a rocket and soared straight. Oil is the lifeblood of modern industry. The sharp rise in oil prices led to an energy crisis in the world. Industrialized countries such as the United States, Japan, Britain, France, and Germany were in the dilemma of cooking without rice.
The capitalist world economic crisis from 1973 to 1975 has also triggered that you can reject the US dollar, but you absolutely cannot refuse oil. The United States has taken a fancy to the strategic position of oil, so it has set its sights on the leadership of OPEC in the OPEC organization, and signed a series of "unshakable agreements" with it.
The United States can provide security protection for Saudi Arabia, while Saudi Arabia must ensure that the US dollar is the settlement currency of oil transactions. Saudi Arabia also led the signatures of other member states. From then on, the United States has found a better anchor than gold. As long as oil is not decoupled from the US dollar, countries around the world cannot get rid of the US dollar.
Unless, who can make up for the purpose of not using oil or complete a complete energy revolution? At present, both of the above situations are difficult. The US dollar flows to the world with the help of oil trade, and the "petrodollar system" officially lands on the stage of history. This system has truly enabled the US dollar to establish a hegemony.
Treasury bonds are under the strong confidence of printing money frantically
In the agreement signed between the United States and Saudi Arabia, there is actually another important content, which is that Saudi Arabia needs to invest the dollars it earns into US Treasury bonds. In this way, the US dollar issued by the United States goes around in circles and returns to its own hands, forming a cycle of the US dollar system.
Similarly, the US dollar exported to the world in the United States eventually returned in the form of government bonds, and most of the over-issued currencies also returned to the government bonds, which did not have much impact on the actual prices. The United States has also officially used this US dollar circulation system to maintain the stability of the US dollar and consolidate the hegemony of the US dollar.
From another perspective, the capital game played by the Federal Reserve can also be called a trick to flee the world. As a valve controlled by the US dollar, how does the Federal Reserve manipulate the flow of the US dollar?
The key is hike rate and slash interest rates. In the case of free currency exchange, when the Federal Reserve cuts interest rates, it is a good time for the United States to export currency to the outside world. Based on the principle of profit-seeking, if the interest rate in the United States is low, then the US dollar will inevitably leave its own country and go to countries and regions with high interest rates.
At this time, the Federal Reserve will open the valve, print money, and export more dollars to obtain high returns in other markets. As a large amount of dollars flows out, inflation in the United States will naturally be diluted, and the crisis will be passed on.
When the Federal Reserve raised interest rates, the funds that were once exported were successfully attracted back by high interest rates. With such a process of lowering interest rates, the US dollar was released and reflowed. And in this process, only the United States is the beneficiary, and those countries that act as guest roles in the dollar cycle system eventually become cannon fodder. Why do
say so?
Because when interest rates were cut, the US dollar went to other countries to buy special purchases, pushing the country's prices and stock markets to high levels, and then the US dollar raised interest rates back to the United States. However, the country's prices and stock markets fell rapidly, causing economic problems. The United States successfully got fleece from this process, and also took the opportunity to control inflation and maintain the stability of the US dollar's currency value.
Seeing this, it is not difficult for us to understand the intention of the United States to print money frantically and the sinister intentions behind it. Under this system, as long as the cycle is not broken, no matter how much the US dollar is printed, its credit can still be maintained. It is precisely because of the government bonds to support the bottom that the United States has the confidence to print the US dollar indiscriminately.
However, then again, although the Federal Reserve has arrogant capital, it also knows how to restrain itself and understands that government credit cannot be overdrawn. In fact, from the establishment of the Federal Reserve in 1913 to 2013, the total issuance of about $10 trillion in currencies was about $10 trillion, but optimistic words cannot be said too early.
Because as early as 2008, in order to deal with the economic crisis, the Federal Reserve implemented four rounds of quantitative easing policies. In 2020, under the critical hit of the epidemic, the Federal Reserve released more than $3 trillion in the market. When Biden first came to power, it planned to launch a US rescue plan involving $1.9 trillion. No matter how strict the system is, there are times when it is too tight to hold back. It is unknown how long the United States' "unlimited printing of money" model can last.
looks at the long-term. Perhaps now, the risks faced by the US dollar are not going to cause it to collapse, but no one knows how big the impact of its "sequelae" is!
In recent years, the international call for "de-dollarization" has become increasingly high. European countries have jointly established INSTEX (a tool to support trade exchanges). BRICS countries are building a "BRICS payment" system. China continues to expand the scope of signing currency swap agreements with various countries. More and more countries and regions are trying to break free from the pressure of US dollar hegemony.
As of the end of 2020, 53 countries have chosen to go to the US dollar, and 29 countries have sold nearly one trillion US dollars in bonds, and an unprecedented wave of de-dollarization is taking shape. Against this background, if the Fed still lets go of "water marking money", the US bond market will shrink sharply and lose liquidity.
By then, if the United States still wants to use the hegemony of the US dollar to cut leeks, it really depends on whether countries around the world can buy it or not.
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