Author: Kafka is very busy Source: Outlander’s Perspective (ID: hooyar_380097485)
Today we have foreign trade data for May, and exports have decreased by 7.5% in US dollars. Of course, this also takes into account that half of our imports and exports are settled in RMB, and the US dollar has appreciated significantly this month.
So the 0.8% decrease in exports settled in RMB is already commendable compared to Japan, South Korea, and Southeast Asian countries.
Looking at it better, it is not easy for our trade account to continue to be maintained in such a harsh global economic environment.
But ultimately, the external environment is harsh, and external demand is weak and sluggish. The root cause is still the financial war played by Europe and America, which launched a wave of austerity on the world. It is said that it is suppressing domestic CPI, but for imperialism, you cannot see what it says, it depends on what it does.
I have always said why the United States insisted that inflation was temporary before the Russia-Ukraine conflict broke out, just because of supply chain problems. But after the Russia-Ukraine conflict broke out, a sudden 180 degree turn started an unprecedented wave of violent interest rate increases.
Can interest rate hikes improve inflation issues? Let’s take a look at countries around the world, who has the highest interest rates, who is determined to have the most severe inflation performance, who is still talking about interest rate cuts, and who has the best inflation control.
To be clear, China’s inflation control is the best, while inflation in Europe and America cannot be suppressed at all.
So the root of the problem is not how much you raise the interest rate, but that you don’t print money indiscriminately, drive a Helicopter money to scatter money, and then lie there and play the ghost game of eating shit GDP. The developed countries are called consumption countries.
Consumption is spending money, and no one knows how to spend money. The problem is that if others spend money without labor, currency will collapse. Europe and America have mastered financial hegemony, and printing money can generate consumption power.
What we mean is that until now, the Americans have not controlled their fiscal spending and are actively implementing fiscal policies. The US government has simply not set a ceiling on its debt. Can we solve the problem solely by raising interest rates?
The amount of money in the circulation sector is increasing relative to the supply of goods, which is naturally inflation.
The best solution to inflation in the United States now is to create a Great Depression, eliminate a large amount of additional issuance of dollars, and bring back the billionaires running on Wall Street to poverty. CPI will naturally come down.
In the era of credit currency, inflation is very easy. Learn from Europe and America, and let the whole nation splash money, independently devalue the currency, and pass the price barrier. Do you think inflation can’t afford it?
But suppressing inflation is very difficult.
Let’s take a look at inflation in Türkiye. After so many years, we began to use textbooks of western economics to deal with inflation. Has inflation come down? Finally, simply lying flat and facing the textbook, it was nothing more than that, and it did not deteriorate to any extent.
Therefore, some people often make fun of that economics and Türkiye always have to die. Now Türkiye is not dead, so economics should take care of itself.
So what is the current pattern of the world? The domestic currencies of the United States and the West have flooded, causing inflation to be uncontrollable. The so-called world currencies such as the US dollar and the euro have been pulled back home through financial means, and due to the large wealth gap and uneven distribution, they have all gone to speculate in real estate and stocks, causing capital prices to skyrocket.
The Federal Reserve, which is equivalent to the world’s central bank, has drained global monetary liquidity, leading to a significant decrease in the US dollar in countries outside of the US and the West, showing deflation relative to the US dollar. This is reflected in the forced decline in demand among countries in global trade.
It’s not that I don’t want to spend money, it’s because there aren’t enough dollars to participate in global trade.
The Americans are inflating themselves, but exporting global deflation.
According to the principle, the next step is for the United States and the West to collectively eliminate the drained currency through a financial crisis, and then there is a reason to print money to “rescue the market”, and to export inflation to the world. This way, the US dollar can depreciate smoothly, and the US GDP can actually lower the gap between US debt and US GDP due to the rise of inflation this time, which in disguised form solves the US debt crisis.
Of course, this is a calculation for the better.
But the world may not be as he thought. When the United States and the West were frantically releasing water, China did not follow suit.
The G7 joined forces to play austerity, tighten global liquidity, and attempt to hit China as the world’s factory by creating a collapse in external demand, just as they suppressed Japan in the 1990s.
Unfortunately, in this wave of China’s export of currency, the so-called Internationalization of the renminbi and currency swap plan, many friendly countries that do not have enough money to import from China can first use RMB to buy Chinese goods to solve some demand problems.
Therefore, we see a strange phenomenon: the US dollar and euro, which cannot be suppressed by inflation, have skyrocketed in exchange rate, with no inflation at all, and China’s trade surplus is increasing. In other words, looking at the circulation of RMB globally, it has increased. With a decrease in the US dollar and an increase in the RMB, the exchange rate naturally falls.
This is the exchange rate calculated from the simplest supply and demand relationship.
Interestingly, it seems that the economic situation is very good, but the United States, which can not be better, is extremely anxious. It wants to promote Antony Blinken or Yellen’s visit to China in various ways.
From a different perspective, the United States is no longer able to afford it domestically, and no amount of fancy data can conceal the fact of recession. They are eager to talk to us about a solution.
However, whether it is a hot war or a cold war or a financial war, you can take the initiative to fight, but how to end it is not your the final say. We still need to look at our own actual strength and say who has the initiative.
Although the old lady is in a hurry now, she can still rely on her G7 friends to stay warm and rely on her followers to suck blood from the outside for a period of time.
Because China has always been able to handle it, and external factors such as igniting the US dollar debt of real estate companies and making small essays calling for market rescue have forced China to increase leverage to drive asset prices.
If the stalemate continues, the debt problem and leverage on the American side will be unbearable. A financial crisis has really erupted from the US side, and our losses can be reduced due to the low chassis. At the same time, we can take out useless tools that were stuck in our hands before.
This wave is called ‘Bi Ding Li’, let’s see who can carry it longer.
A few days ago, the US warship Zhong Yun ran into the Taiwan Strait and was intercepted by the 052D of China. A large number of pictures of the US warships with rust spots spread on the Internet, which also caused a lot of discussion. It seems that the US navy, which is so arrogant, is making waves about this product?
Insiders watch the doorstep, outsiders watch the excitement. Just looking at the rust on the plywood, at least it reminds people of the poor military discipline of the US Navy. The easily maintained parts of the plywood are rusted, and how much combat power can they still have?
The US military, which is strong on the outside but weak on the inside, naturally weakens everywhere, only daring to scare and fear it. When encountering those who dare to fight against it, they immediately run away. After running, they even ask Pentagon officials to hum a few times to express their dissatisfaction.
We often say that even the US military, which supports American hegemony, and the leading navy in the US military, are so virtuous. How much weight do you really expect other parts of the United States to peel off their flower racks?
At this critical moment, many people think that foreign trade data is not as good as it looks, and a small essay has also been published. There will definitely be large-scale stimulus policies introduced next, and I think you have thought too much.
Just like what I said, there won’t be a bull market for the time being, nor will there be large-scale stimulus measures. Only when the United States takes the lead in this financial war and cannot withstand it, it triggers a financial crisis, and there will be everything.
The only thing we have now is to adjust the structure, invest resources in projects to improve our own Factor of safety, and continue to expand RMB’s investment in the outside world while the United States is stuck, draw more partners to our settlement system, and support external demand to solve some problems of insufficient demand.
The world has completely changed, and we are all adults now. Don’t make the mistake of seeking help from time to time.