Original: a green wood source official account: distant green wood has been authorized to reprint
Over the past year, the US inflation rate has soared from less than 1% to 8.5% in March this year.
The inflation rate of 8.5% is hyperinflation in any sense, which will lead to a sharp decline in national living standards and trigger strong public dissatisfaction.
Therefore, on March 16, the United States raised interest rates by 25 basis points, which is the first interest rate increase since the United States set the interest rate to zero.
In April, the inflation rate in the United States finally fell by 0.2%, from 8.5% to 8.3%.
The 0.25% interest rate increase only brought about a 0.2% drop in inflation. At that time, I also said to everyone that if the rate was converted according to this ratio, how much would the United States have to raise interest rates to keep inflation down? It would have to raise interest rates by at least 7%?
It is impossible for the US economy to bear the cost of raising the benchmark interest rate from zero to more than 7%, and the Federal Reserve dare not do so as long as it is not crazy.
However, after all, inflation has dropped, which is of little use.
Although it is said that there is no way to keep inflation at a reasonable level, it is better to keep it down.
Better than doing nothing, right.
On May 4, the Federal Reserve raised interest rates by another 50 basis points, preparing to severely curb inflation.
Of course, the 0.5% interest rate hike this time will not eliminate inflation, but it is no problem to cut inflation down. No one denies this.
Now, the inflation data of the United States came out in May. Guess what?
Unexpectedly, inflation in the United States rose again in May. The inflation rate became 8.6%, higher than the peak in March, setting a new record since 1981.
The United States raised interest rates on May 4. The power of raising interest rates will not be fully shown in the inflation data in May, but in any case, the inflation rate in May will not reach a new high.
Even the most pessimistic economists of the United States dare not have such expectations.
The cumulative interest rate increase of 0.75% has attracted worldwide attention, which has caused great turbulence in the capital market. As a result, the interest rate increase has been lonely, and the inflation rate is still rising.
The previous interest rate increase of 0.25% reduced the inflation rate by 0.2%. If we want to eliminate inflation according to this ratio, we will calculate a very terrible interest rate data.
But now, when the interest rate is raised by 0.75%, the inflation rate can still rise. How can this be calculated? Even the pro rata data can not be done.
According to the current situation, it is hard to say whether the US interest rate hike of 7% can eliminate inflation. Maybe a higher figure is needed.
In short, outrageous.
With such a high inflation rate of 8.6%, the US government is completely unable to account to the American people.
Therefore, the United States must raise interest rates, try its best to raise interest rates, and raise interest rates on the edge of the stock market not collapsing.
On the day when the US inflation rate data were released in May, the European and American stock markets collapsed, because everyone expected that the Federal Reserve would certainly increase interest rates in the future.
It is inevitable for the United States to raise interest rates. In this case, it must or can only raise interest rates. I am not surprised that the benchmark interest rate will be raised to more than 2% in the future, because it can not hold down inflation at all. It is terrible.
The inflation rate can not be reduced, but it can not be increased in any case. The result of such a strong interest rate hike is that the inflation rate is still rising, which is a slap in the face in public.
People will be dissatisfied if the inflation rate does not fall, but it is much better than continuing to rise. People will not see the end point if the inflation rate rises again and again, and they simply do not know what level inflation will rise to.
First of all, we will use all the space that can be released for raising interest rates, and we will talk about the following things later.
Why is there such vicious inflation in the United States?
It certainly has something to do with the US imposing tariffs on China, but it is not entirely because of this.
According to the estimates of American economic experts, the complete elimination of the tariffs imposed on Chinese goods can reduce the US inflation rate by as much as 1.3%.
This effect is very good, much better than that of the US interest rate hike, but it is only 1.3%, which is a drop in the bucket compared with the current 8.6% inflation rate in the US.
The main reason why US inflation is so outrageous is that it has abused its currency.
Since the outbreak, in order to alleviate domestic contradictions, the United States has sent out more than $500 trillion at one go. The $5trillion is completely printed out of thin air without any anchor. It is all supported by the credit of the U.S. government.
The $5trillion eventually flowed to the world. Now even the inflation rate in Europe has been pulled to more than 8%, and there is no grass in the place where the dollar torrent passes.
The whole world is helping the United States share the inflation, but the money is too much to share, so the United States is finally eaten by inflation.
During the 2008 financial crisis, the United States desperately printed money and spent a lot of money to save the economy. Everyone was worried that hyperinflation would come to the world. However, in the next decade, it was deflation rather than inflation that bothered the world.
So much money was printed in 2008, but there was no inflation. The more money was printed, the more deflation occurred, which completely subverted the traditional cognitive view.
Therefore, the school of economics in the United States has come up with a view called “printing money is harmless”, which means that because of the development of productivity, printing money will not cause inflation, which is also the reason for the crazy printing of money in the United States in 2020.
When they printed the $5trillion, they really didn’t think anything would happen.
However, in the decade after 2008, the reason why printing money is harmless is that China has provided enough commodities to the world. It has forcibly hedged those currencies with the crazy growth of commodities. Therefore, inflation has not come, but deflation has come.
At that time, to save the United States was to save China, so we had to do so.
But now it is not. In the current situation between China and the United States, we have absolutely no need to save the United States. Whether the United States is alive or dead has nothing to do with us, even better when it is over.
The United States wants to find other countries in Southeast Asia as new world factories to replace China’s capacity gap.
China has no problem, but do those countries in Southeast Asia have such strength?
Ten years ago, the United States was supporting alternative countries. It was not just doing so. Has the support come out?
The indiscriminate issuance of currency will certainly lead to inflation. It is an accident, not a normal situation, that China, a country that can create economic miracles, should be the sole supporter of the super factory.
Some time ago, the United States wanted to suppress inflation by abolishing tariffs on China, but no one dared to say so. So it repeatedly hinted at China, hoping that China could talk to itself, make China soft and give itself a step down. Then the United States went down the slope and cancelled tariffs.
However, China completely ignored the United States and did not give the United States this level at all.
Foreign Ministry spokesman zhaolijian also said a few days ago:
The essence of China US economic and trade cooperation is mutual benefit and win-win results. There are no winners in trade wars and tariff wars. The unilateral imposition of tariffs by the United States is not conducive to China, the United States and the world.
What does this sentence mean?
The responsibility for the tariff war lies entirely with the United States. It is caused by the unilateral tax increase of the United States. It is suggested that the United States should cancel the tariff by itself and give China a soft shoulder.
The United States cannot accept this.
The great beautiful country of China is the center of the world. The Heavenly Kingdom and the light of civilization, how can we be soft to the foreigners of Dongyi?
It is absolutely impossible for the United States to accept China’s proposal, but the United States cannot force China to bow down.
China has played too many cards, but it has not been effective. The American people have gradually become immune, so Biden urgently needs to find a new man to explain why the U.S. economy is so bad.
On June 10, US President Biden delivered a speech calling on Congress to crack down on international shipping companies.
Biden said that in 2020, the freight rate of a container was $3500, but now it has increased 10 times, which is the main cause of inflation in the United States.
Biden used “theft, fraud, exploitation, extortion” and other words to describe international shipping companies in his speech, which is very serious.
But in fact, first of all, the rise in international shipping prices is due to the lack of transport capacity. Simply intimidating shipping companies cannot reduce freight rates.
In addition, even if the freight rate is reduced, it will not solve the inflation problem in the United States.
It’s nothing more than looking for someone to throw the pot. The rising sea freight is not a new phenomenon today. We knew it two years ago.
The United States is a country that attaches great importance to the economy. In history, a president who has not done a good job in the economy can only serve one term, and it is extremely difficult to be re elected.
Biden asked the pot bearer to divert his attention. I don’t think it will have much effect. I think his re-election is hanging.
But even if Biden is replaced, what can happen? This time, the U.S. economy is not entirely Biden’s responsibility. It is the combined effect of many factors.
When the $5trillion water was released, they all supported it, because they met the interests of all people and did not consider any disaster at all. Now, no one has any way to deal with an accident and all are shifting their responsibilities.
The real reason for the huge problems in the US economy lies in the fact that the United States likes to make great achievements, is unrealistic, and various domestic parties fight openly and secretly.
At the beginning of the dream of Red Mansions, the Jia family was actually going downhill, but it still spent a huge amount of money to build the Grand View Garden. In order to maintain the surface scenery, it continued to spend extravagantly, exhausting the last trace of vitality.
At the last moment before the final collapse, Jia’s house was still fighting openly and secretly. Almost every chapter described the collusion and calculation between brothers and sisters.
People don’t care whether the Jia family will be finished in the future. They only care whether their own interests are satisfied. If they are not satisfied, they will do something. When something happens to the Jia family, no one thinks they should be responsible for it.
In the end, the author writes the real reason for the death of the Jia family.
“We can see that if such a big family comes from outside, it will not be killed for a while. This is what the ancients once said, ‘a hundred footed insects, dead but not stiff’. They must kill themselves at home before they can be completely defeated!”