Where will the excess US dollars flow this year? What impact will it have on global trade next year? Since the U.S. dollar has no credit, how should individuals respond? A more reliable idea is that the yen will be safe, the European epidemic will spread, the euro and the pound are dangerous, and Europe and the United States may be in a pot.
he United States has been battered by the epidemic, and the harm to others actually harms itself? Europeans have suffered, and the twelfth lunar month suffers. We embarked on a blockade at the beginning of the year. Europe and the United States chose at the end of the year. The British man-made misfortunes will not come singly. It may turn into a hard Brexit. The secessionist forces will have a referendum. If the sun never sets, the empire will disintegrate. Maybe it will be ahead of the United States?
Ten years ago, the subprime debt crisis made Wall Street drunk. Relying solely on pushing US stocks, there are fewer and fewer dealers. Anchorless money printing has accelerated again. The US dollar is like a flood, with circulation accounting for 20% of the total. The US currency exchange rate will definitely depreciate by 20%. If you change to a different country, hyperinflation will be premature.
The U.S. dollar is too big to fall. Relying on the deterrence of the U.S. military, if there is no money, it may continue to invade. As an international settlement currency, even if it exceeds the US dollar, it can be settled through foreign exchange, and it can also be used as an investment to flow into all parts of the world, which will inevitably have a negative impact on global finance. The price indices of other countries in the world have an important impact.
According to the normal US dollar exchange rate, the conversion cycle is very stable, which is beyond the reach of the world. Forced by the spread of the epidemic, the U.S. dollar will enter a depreciation cycle in the second half of this year. Under Trump’s reversal, the U.S. dollar rose instead of falling, and the amount of expansion of the balance sheet far exceeded expectations. U.S. stocks have been rising steadily, disrupting conventional thinking, causing heavy losses in hot money and cashing out.
U.S. stocks plummeted in early March and lost nearly one-third. Quantitative easing without a lower limit brought the US dollar into a flooding stage, and the huge amount of US dollar was released. It can only re-enter the U.S. stock market and spill over in the second half of the year, pushing up bulk futures and soaring raw material prices, leading to a small boom in some areas.
In the first wave of US dollars after the catastrophe, U.S. debt was in a hurry and flowed to the markets of various countries, but several major holding countries successively stated that they would not be mixed. The Fed bit the bullet and exerted an influence on the bond market in order to hedge against the exchange rate of the U.S. dollar. However, the credit was wiped out. The Fed has been backlashed and has become the biggest taker of U.S. debt.
The internationalization of the renminbi has high expectations from all over the world, and this year is an even bigger trend. The yield on the 10-year Treasury bond has a reciprocal change with the U.S. dollar. After the U.S. stocks released water to raise fish, various countries took the opportunity to take advantage of the opportunity to cash in U.S. dollar assets and put them on the mainland one after another. Japan got off the bus halfway, cutting off the U.S. debt and returning home.
The renminbi is hot, and bond yields have soared, reaching as high as 3.36%, and spreads reached a peak of 250bp. With huge margins for spreads and constant yields, international capital has become more enthusiastic about buying renminbi government bonds. According to statistics at the end of 2019, foreign institutions’ holdings of treasury bonds have exceeded US$2 trillion, with a net inflow of US$1 trillion last year.
The second wave of U.S. dollars has passed through foreign trade deficits and entered various countries. At the end of the year, it continues to hit new highs. The monthly foreign trade surplus is constantly hitting new highs, exceeding 30 billion U.S. dollars per month. Foreign exchange reserves have also increased. In order to revitalize the US manufacturing industry, it is essentially a false proposition.
A large number of foreign manufacturing and Chinese daily necessities purchase excessive U.S. dollars and want to increase foreign circulation, which effectively stabilized the U.S. dollar, but no one took the U.S. dollar and settled in non-U.S. dollars. The result is counterproductive. It stays in the circulation and causes stagflation in the country, which is not like a reserve currency.
Trump’s spoof of Huawei has obvious technical differences, forcing allies to follow closely, and almost self-deception and humiliation. Viewing from the sidelines of various countries has brought 5G commercial channels into a new dimension. In terms of 5G, it means popularization, high-tech comparative advantages, and the purchase of American products, causing the U.S. dollar to return to the U.S., forming a pseudo-circle of U.S. dollar.
Since the Bretton Woods system, after the crash 50 years ago, the U.S. dollar has decoupled from gold, and new gameplay has been brewing. Petrodollar is the most prominent, attracting downstream players. Since the Reagan era, American capital has prospered and the local manufacturing industry has flowed out, almost like twin brothers. It must rely on the trade deficit to allow cheap daily necessities to enter, otherwise the big cycle will not be able to play. The expansion of the trade surplus is the best place for over-issued U.S. dollars.
The third wave of U.S. dollar issuance was horribly backlashed by the epidemic, trapped by the U.S. deficit. Relief continued to hit new highs, widening the U.S. debt gap, pushing up raw material prices, driving non-ferrous minerals, and coal and oil prices soaring because of bulk raw materials. , All US dollar settlement, and the superimposed raw material rise, the two factors superimposed, pushing up inflation expectations.
This year, the epidemic has increased the number of elections, and most of the circulation links have been stopped. It is not possible to feel the shortage of goods in the market in the process of digesting the backlog of inventory. New products have not yet been manufactured. As soon as next summer and autumn, new products will enter circulation, and there will be real feelings. The United States will be inflated due to the trade war and the shortage of Chinese goods.
this year was heartbroken and his nightmare was coming to an end. But next year, it will be warm or cold. Trump will not admit defeat. Biden’s extradition case for embezzlement of Mexico seems to be concealed. The result of the US general election is worthy of its name and has a huge impact on the economy. If the policy is unsustainable and the deficit loopholes are difficult to fill, the US debt will continue to expand.
Destocking will bottom out next year, and the source of new goods will be exhausted. Americans feel most tangibly that shortages have become the new normal. Inflation, which has not been seen in 20 years, is estimated to have intensified, affecting the lives of Americans, and the plunge in US stocks has been even more tragic. Even if Biden can be president, he may stay for three to five months before Jiang Lang resigns?
It is expected that the epidemic will disappear, and I am afraid that we will have to wait for the vaccine. The British are cross-infected and more contagious. The newly mutated genetically modified virus will make vaccine research and development start from scratch again, and the cycle will take one and a half years, affecting or full coverage every year. The real economy is blocked, the source of goods is also pantyhose, the United States and even Europe, hardly come singly. The market is looking east, speculating on the real impact of the US epidemic. Globalization is increasing day by day, China’s industrial chain is complete, and the products are cheap and good. Even if Europe and the United States want to replace it, it’s a pity that time doesn’t wait for me. When the market is in short supply, the so-called pricing power dispute in the United States may be even more unrealistic.
The United States still has hegemony, Germany wants to overtake in corners, and Japan is also scrambling to get ahead. The era of full-scale inflation is conducive to the internationalization of RMB and has a more tangible impact. State-owned enterprises still have the right to speak in the reform and opening up, and the development of small and medium-sized enterprises will still be difficult. After all imported inflation, as the price of Australian iron ore doubles, the periphery still has pricing power.
The excessive flow of US dollars may have a negative impact. If you live on wages, you used to be frugal, and the meager living money you saved would be exploited in disguised form by inflation. High income is another matter. High-yield financial products have been exploding in recent years. Regardless of the real estate or property market, stand still and become a big winner.
With the improvement of the national economy, family investment and financial management have gradually emerged and entered the public’s field of vision. After income minus expenses, the proportion of net income is increasing, capital income is rising, investment in education is about 30%, studying abroad is the main theme, and the demand for US dollars is soaring. And low- and middle-income families, even accounting for up to 70%, seriously affect the quality of life.
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