The time to raise interest rates!

Spread the love

Author: Sheng Tang rushong source wechat official account: the chief shopkeeper’s knife has been authorized to reprint

With the order of US Federal Reserve Chairman Powell, the curtain of a new round of continuous interest rate hike in the United States has begun.

In the financial circles, there is a description of the road map for us dollar interest rate hike: the US Federal Reserve continued to raise interest rates ? then the world reserve currency began to shrink ? the capital scattered around the world quickly returned to a few developed countries or economic centers centered on the United States, [mainly the United States] ? then the emerging market capital of the world’s non-traditional economic powers began to flee [the necessity of pursuing profits] ? emerging markets began to break out of financial crisis ? currency depreciation, asset depreciation and stock market price crash in emerging markets. Emerging markets are howling.

When the emerging market economy was depressed, the United States cut interest rates again and implemented quantitative easing policy. It used the previously returned dollars to clean up the mess and buy assets cheaply around the world, causing asset foam or excessive liabilities around the world. The overburdened emerging markets had to sell their high-quality assets to American capital at a low price, and eventually became a capital vassal of the United States. Several years later, when emerging markets finally pulled their economies out of recession through hard work and sweat, the United States will raise interest rates again – Return – Destroy – buy cheaply…. The cycle is endless. By using this routine, the United States can stay at the top of the global food chain forever, and maintain its youth by beating the bones and sucking the marrow of the global people.

We had the honor of seeing this routine twice. The first was the Southeast Asian financial crisis in 1997. After the 1990s, the cold war ended because of the disintegration of the Soviet Union. The global security situation is very good. In the context of security, the social economy is naturally prosperous. As a result, East Asia has entered an era of vigorous development. At that time, Southeast Asia and East Asia, which had good relations with the west, were generally industrious and had low labor costs, showed the most vigorous state. East Asians who only know how to get rich through hard work do not know that a black hand has been stretched out and a pair of fangs have been exposed.

Because of the rapid economic development, the capital investment in this region has increased rapidly, and various construction projects have blossomed everywhere. The construction of factories, production lines and supporting infrastructure all need huge and lasting investment.

For example, a person around us makes money because of a skill he is good at, or because he happens to catch up with the opportunity of the times. At this time, he who is confident and conceited will generally increase his investment in the hope that he can earn more money. Moreover, most of the increased investment is outside his own areas of expertise. For example, if he earns money from cooking, he may invest and set up factories, or even enter the stock market. All these new investments are not his own capital. Generally, he will use his past success as a reputation and attraction to borrow or raise funds to achieve larger-scale development. At this time, if the capital chain is broken or the capital is taken away, the person’s career is basically over, at least at a certain stage. This kind of thing is common around us.

This was the case in Southeast Asia and East Asian countries in 1997. Six or seven years after the countries in East and Southeast Asia enjoyed the benefits of the world security situation, they even emerged as the “four little dragons of Asia”. For a time, they were in the spotlight. All countries are increasing investment and expanding their scale, ready to turn themselves into dragons. At this time, the American financial leaders who had been waiting for the fruit to be picked had made a move. The way to sell is very simple, that is, the US dollar interest rate hike. Coupled with the disturbance of capital pioneer killer Soros in Southeast Asia, Southeast Asian capital quickly returned to the United States, making the whole Southeast Asia like a punctured balloon, withering down quickly. Only a piece of rubble was left. By this time, in fact, American capital had achieved its own strategic goals. Just waiting to clean up the battlefield in this rubble land, South Korea’s Samsung is the booty captured by American capital in this battle.

But the pioneer officer Soros seemed to have more than enough meaning. He took a quick look at the newly returned Hong Kong, so he went straight to Hong Kong with his own capital army, ready to give the newly returned child some color to see. But unexpectedly, in this battle, Soros was finally defeated because the mainland was the strong backing of Hong Kong. However, from the perspective of the whole campaign, Hong Kong was not the key target of American capital at that time. At this time, the financial firewall in Chinese Mainland is very tall and solid, and the mainland market is in a period of rapid growth, which is not suitable for harvesting. So the Hong Kong campaign can only be regarded as Soros’ personal behavior.

In 1997, in Southeast Asia and East Asia [mainly South Korea, at that time, South Koreans donated money and silver to protect national assets. Although they eventually lost most of Samsung’s equity, they still retained some of South Korea’s main industries]. After a few years of happiness, 9 / 11 came. In the seven to eight years after 9 / 11, the United States focused on the wars in Afghanistan and Iraq, and soon consumed almost all the wealth seized from Southeast Asia. So in 2008, the subprime mortgage crisis broke out. At this time, the United States wants to repeat its old skills, but the goal is not easy to find. At this time, Southeast Asia is still recovering from its wounds. It is not suitable for harvesting. Even if it can harvest, it does not have much oil and water. [the most important thing is that this harvesting mode must wait until the farmer is mature, otherwise it is meaningless and cannot be harvested]

The outbreak of the subprime mortgage crisis made the United States dizzy for a while. But they soon decided to choose two goals. One was China, which was now strong and rich, and the other was Europe, which had been reluctant to harvest and regarded as its comrades in arms. At this time, China made a very wise decision, that is to promote the domestic large-scale infrastructure construction. On the one hand, the United States has been relieved by increasing investment, and on the other hand, its infrastructure has entered a real upgrading stage. [high speed rail and central city planning were accelerated at that time] this not only avoids direct collision with the United States, but also benefits the expansion of domestic economic scale. An era has its own background and its tasks and practices. Only by understanding this can we look at the problem more objectively.

However, Europe is not so lucky, because they think that they, like the United States, belong to the reaper and are also comrades in arms in the trenches. They simply did not expect that the American capital would cut the butcher’s knife at them this time. But the butcher’s knife was finally cut down. The first thing the Americans detonated was the Greek debt crisis. This is also a bomb planted by the Americans in advance. The financial companies on Wall Street have made false accounts for the Greek government to make Greece meet the debt standards of the European Union, so that it can escape the debt review of the European Union and become a “rich country” that can spend as much money as Germany and France.

The subprime mortgage crisis broke out in 2008. In 2009, the Americans detonated Greece. For a time, European countries have emerged from sovereign debt crisis. Greece, Ireland, Spain, Portugal and other countries took the lead in exploding mines, and then dragged down the economy of the entire European Union. At this time, if there was no German Angela Merkel as the God of the sea, the EU would have fallen apart. It is precisely because of Merkel’s iron fist that she forced all mine blasting countries to reduce their spending, reduce their spending, and provide targeted assistance to all countries, which finally made these mine blasting countries slow down. But Merkel’s iron fist also made the people and even the government of these countries quite dissatisfied with her. Because she ruined their happy life.

Merkel saved the European Union, but she could not stop the United States from harvesting Europe. A large number of capital went far away from the United States in the European debt crisis. So that the United States can be safely supported for another decade. Until the outbreak of COVID-19 in 2020.

At this time, the United States, looking at the world, really has only one place to harvest, that is, East Asia, especially China. The outbreak of global inflation in the United States caused by the COVID-19 is due to two major factors: the US dollar excess in the past two years and Trump’s Global trade war since 2017. The trade war with China is a means for the United States to control China, and the US dollar overload is a harvest preparation for the United States. Americans don’t care about trillion dollars or even tens of trillion dollars. Because they believe that as long as the U.S. means are tough enough and its wrist is high enough, these excess dollars can eventually be digested by the world and itself. We have said this many times.

Moreover, this harvest is a century’s war for the United States. Because China has not changed much from 1997 more than 20 years ago, the firewall is still solid. But the relationship between China and the United States in 2008 has long been different. From Obama to trump to Biden, the intention of the United States to regard China as a major strategic opponent has already been revealed. At this time, it is impossible to expect China’s cooperation. We can only rely on strong suppression and force coercion. In other words, if you want to harvest China, you can only make a strong attack and cannot outwit it. Although the United States has never stopped its single moth against China in recent years, all of them have failed.

As a result, the Russian Ukrainian war broke out, allowing Europe, which had already been harvested, to be harvested again. In addition, the outbreak of the Russian Ukrainian war is not only to harvest Europe, but also to prepare for the next two track world. Because if China can not be won, the United States can only choose two tracks. The primary condition for the dual track is that Europe and the United States should become one. Only when Europe is tied to its own waistband to compete with China and Russia can there be a new cold war that the United States wants.

Originally, the Federal Reserve could have waited a while before raising interest rates, because the current situation of the war between Russia and Ukraine is unclear, and Europe has not been completely tied up. At this time, if the interest rate is raised, Europe is likely to be unable to stand it and submit to Russia. On the contrary, the capital in Europe and other parts of the world will regard China as a safe place for capital, so that the American harvest has become a wedding dress for China.

But rising inflation has kept the Fed waiting. In any case, action must be taken. If we do not act, these inflation will lead the United States into a real stagflation stage, which will evolve into a real and irresolvable economic crisis. So we can see that the Federal Reserve is forced to raise interest rates this time, rather than raising interest rates as planned in 1997.

In the next six months, China and the United States will enter a round of negotiations. Easing China US relations is an effective means to solve US inflation. But forcing China to pay and be cut off is also a goal that the United States must achieve. This has created a contradictory situation. How to break the situation lies in the United States, not in China. Only when the United States recognizes its own situation, recognizes China’s position in line with its national strength, and lifts most of the sanctions against China, can it form the world of common development that China really wants.

However, the United States will not be willing. It is just playing tricks, hoping that China will have fools or that China will have internal changes. In the tangle and waiting of such contradictions, the United States will eventually lose its last chance to retain its dignity and become a declining overlord.

Leave a Reply

Your email address will not be published.