In less than two days, two pieces of news came, and the United States could no longer sit still.
The US debt crisis has not been resolved, the US election is approaching, and the US economy is facing unprecedented difficulties. US Treasury Secretary Yellen rarely shows weakness towards China. Can Sino-US relations be eased?
[Two pieces of news in less than 48 hours made the United States upset]
Since the Sino-US game, the United States has taken several measures to encircle and block China in many fields. But so far, these sanctions have not only failed to achieve their goals, but have made the weakness of the United States more exposed to the world.
In the past two days, two more pieces of news came, which made the United States very anxious. On July 11, the Moscow Exchange said that the RMB accounted for 99.6% of the Russian foreign exchange market.
Did you know that the United States has been increasing its financial sanctions against Russia, which has resulted in Russia being kicked out of the SWIFT settlement system? Since then, Russia has been trying to find ways to break through the sanctions.
The United States is even more powerful, and wants to unfreeze the frozen Russian assets and use them to help Ukraine. Is this what the United States calls supporting Ukraine? This is clearly a disguised occupation of Russian assets.
The rogue United States caused the Moscow Exchange to announce in June this year that it would stop trading in US dollars and euros.
Because of this action, the share of the RMB in the Russian foreign exchange market has increased significantly.
You know, after the Russia-Ukraine conflict began, many countries were afraid of offending the United States and having their assets arbitrarily frozen and occupied by the United States.
What to do? The process of de-dollarization has also begun to accelerate. Many countries have taken out their gold from the United States and tried to use their own currencies to settle transactions with other countries.
For the United States, a country founded on finance, once de-dollarization is successful, its hegemony will no longer exist.
Now the speed has obviously accelerated. In addition, there is another piece of news that makes the United States uncomfortable, which came again in less than two days.
Modi said he would discuss expanding local currency settlement with Russia, which is not good news for the United States. India is the object that the United States is trying hard to win over, but now it has to conduct local currency settlement with Russia, which is sanctioned by the United States. This is undoubtedly accelerating the process of de-dollarization.
Although the internationalization of the RMB is still a long way to go and it is difficult for the RMB to replace the US dollar in a short period of time, in order to counter the US financial hegemony, it would be a success for countries to not use the US dollar.
[The impact of de-dollarization on the United States]
In fact, the reason why the United States can become a superpower and master financial hegemony is because of the hegemony of the US dollar. Since the United States linked the US dollar to oil, countries around the world have to use the US dollar to conduct trade. The United States can gain a lot of benefits just by collecting "tolls" from it.
Moreover, when the whole world uses the US dollar, the Federal Reserve is equivalent to controlling the world's wealth.
The United States relies on the tidal effect of the US dollar to reap the world's wealth by raising and lowering interest rates. With the dollar hegemony, the United States can make money without doing anything and just lies on the printing press.
However, this situation is coming to an end. You know, the dollar's hegemony relies not only on oil, but also on the national credit of the United States.
Why are U.S. debts selling well? It’s because everyone believes in the credit of the United States. Besides, U.S. debts had never defaulted before the pandemic!
But now, the United States has severe inflation and keeps raising its debt ceiling. The US debt is in substantial default, and the money owed to Japan has not been repaid. Until now, the Federal Reserve is still busy with US debt.
U.S. debt is related to the survival and development of the United States. The United States' social insurance, employee wages, and even the loans of many companies are all related to U.S. debt.
In other words, U.S. debt is flooding every field in the United States. If the U.S. debt really defaults, and if the momentum of de-dollarization accelerates again, the impact on the United States will be quite large.
The United States may suddenly collapse from within, and now the United States is becoming more and more panicked.
Yellen rarely conceded to China.
On July 9, U.S. Treasury Secretary Janet Yellen spoke at a hearing about the consequences of the United States' unilateral sanctions against China, Russia and other countries.
What is unexpected is that Yellen was not as tough this time as before. Instead, she rarely admitted that although the sanctions imposed by the United States were severe, they did not achieve the expected results, and that such unilateral sanctions also had a negative impact on the United States.
Yellen believes that the US dollar is very important in international transactions. If the United States uses the US dollar to sanction other countries, it may be somewhat effective at first, but over time, other countries will strengthen their cooperation and the impact will be weakened.
Yellen said: The more sanctions the United States imposes, the more other countries will try to bypass the US dollar in financial transactions.
Oh, what Yellen said is really objective. Sanctions are like the sword of Damocles hanging over other countries' heads. The sword has not fallen yet, and everyone is afraid that it will really fall on their heads, which will have a great impact on them.
But if this sword really falls and the effect is not as expected, other countries will wonder if they can withstand it, or they should find other ways as soon as possible to avoid being hit by the sword.
The United States abuses sanctions, causing them to become less and less effective. But every time the United States wields the sanctions stick, everyone reacts calmly, because the results can be guessed and the countermeasures have been thought out long ago.
However, the prestige, authority and deterrence of the United States will be gradually consumed in the process, and it may eventually lose its dominant position.
Obviously, the efforts of China, Russia and other countries have made Yellen and the United States feel the crisis. One wrong move can lead to a complete loss. Now the United States is unable to take care of itself. With the election approaching, the two parties are constantly arguing and the trend of division is becoming increasingly obvious.
It’s probably going to be difficult for the United States to become great again.