Will the US interest rate cut trigger an economic crisis? When and in which country?

Everyone is more concerned about this topic this month. Here I share a long and in-depth article and I hope you can find the answer from it.

In the next one or two years, there will definitely be another major crisis in the world, most likely in North America, one is the United States and the other is Mexico. The East is rising and the West is sinking. Our time has really come. I believe you have heard many explanations for the US dollar interest rate cut.

We tried to talk about something different. We took a quick look at the past 40 years in the United States. Every time the dollar interest rate increased by more than 5% and started to enter the interest rate reduction channel, major events occurred around the world.

In 1980, the interest rate was increased from 5 points to 20 points in 1981, and he began to cut interest rates in 1982. The Latin American crisis triggered the Latin American crisis, which was the worst crisis in the past 40 years.

During this crisis, Mexico's currency fell by about 45%. All national assets of countries like Argentina, Chile and Brazil plummeted, including stock markets and real estate.

The 1980s was a ruined generation for Latin America, which was a change brought about by the U.S. interest rate hike to interest rate cut. From 1988 to 1989, the U.S. raised interest rates again to 9.8%, and from 1989 to 1990, it began to enter the interest rate cut channel. In 1991, Japan's stock market plummeted, so this time the bad luck fell on Japan. From 1994 to 1995, the U.S. interest rate rose to 6%, and in 1997 it began to enter the interest rate cut channel.

Then the Asian financial crisis was triggered. Which country was the first to be wiped out by the Asian financial crisis? Thailand. With the advent of the Asian financial crisis, the entire Asian country was hit hard. Indonesia, including South Korea, was hit hard after this Asian financial crisis. Therefore, many of the so-called pillar industry assets of South Korea were all controlled by the United States.

Do you know which is the largest company in South Korea? Samsung. But you think Samsung is South Korean, but look at its shareholder structure. Samsung is American, so the whole of South Korea is working for the United States. So far, Thailand has not recovered.

From 1999 to 2000, the US interest rate was raised to 6.5%, and then it started to cut interest rates in 2000. As a result, the Internet bubble burst and the US stock market plummeted. From 2004 to 2006, the interest rate was raised to 5.25%, and then it started to cut interest rates in 2007. In 2008, the subprime mortgage crisis was triggered, which affected the whole world.

The subprime mortgage crisis that is most recent to us this time may be the disaster that all Chinese people remember most, Fannie Mae and Freddie Mac.

What happened to the two largest real estate companies in the United States? They went bankrupt. The fourth and fifth largest investment banks in the United States also went bankrupt. Lehman Brothers was such a glorious investment bank back then. But it went bankrupt this time. The United States was hit hard again by the subprime mortgage crisis.

So we all suddenly found that from the 1980s to the present, every time the tide of interest rate hikes and cuts in the United States was initially caused by problems in Latin America and Asia, you will find that the two recent problems were caused by problems in the United States. We suddenly found that the trend has changed a bit, that is, Americans used to mess with others, but now they mess with themselves. The United States is now beginning to adapt to the self-castration style of play.

Now let’s look at the current situation. In March 2022, the United States began to raise interest rates, which lasted until July 2024. In just over two years, the United States violently raised interest rates to 5.5, with a total of 11 rate hikes.

If history can be traced back and if history can be used as a reference, then we can imagine that starting from this year, in the next one or two years, there will definitely be a country or a region that will trigger a financial crisis.

So what will happen next? My prediction is that this time it is likely to happen in North America, in two places, one is the United States and the other is Mexico. Let's wait and see. I may be wrong. In the next one or two years, there will definitely be another big crisis in the world. I just want to tell you that when we study economics, you will find that everything seems to have its own rules. History will not repeat itself, but you will find that history is always surprisingly similar.

My personal prediction is that the financial crisis from 2025 to 2026 may occur in North America, and some signs have begun to emerge. Regarding this interest rate hike and cut, in fact, who does he want to harvest the most? Because he has 35 trillion foreign debts, he wants to fill this 35 trillion foreign debts, but he didn't expect China's resilience to be so good, and it survived. China has its own solution to this dollar shortage. The dollar shortage means that there are no dollars in the world. Because of the interest rate hike, where did all the dollars go back to? They went back to the United States. There is no liquidity in the world, the country has no liquidity, and the company has no liquidity, so the country will go bankrupt, and the company will go bankrupt.

But China has successfully solved it. How did China solve it? Two tricks. The first is to sign currency swaps with 152 countries along the Belt and Road Initiative. I will exchange my currency with your currency. The second is barter trade. The third is digital currency. China has started to launch the digital RMB. We have used digital RMB to buy Australian mines and Middle Eastern oil. Today, the game between us and the United States is actually a competition of endurance to see who falls first. It is obvious that this financial crisis has been won by China in theory.

But it should be noted that the Americans definitely do not want their dollars to leave the US market quickly. If the US dollar leaves the US market quickly, do you know what it means? If your company's original cash flow is not enough, and the American money is not enough now, and now your cash is leaving your company on a large scale, your company will panic. It is said that more than 1 trillion US dollars in cash will flow out of the United States, which means collapse. From the perspective of the Americans, they will definitely not want this to happen. They know what a rate cut means, which usually means cash leaving the country. What are the methods? Generally, there are two methods: first, either keep your money here. Second, mess up the world so that your money dare not go anywhere.

Some people say that now that there is liquidity and the US dollar, will the assets of the whole world soar? This logic is not valid. Capital will not buy cheap things. Capital will buy assets with rising expectations. From a global perspective, Europe is now in a mess and the Middle East is in a mess. So where do Americans think the most valuable assets in the world are rising? They are in Asia. Why are there so many things happening around China? It is because Americans are constantly making trouble here. In this case, capital will not dare to come to East Asia, because they think there is something here, there is a war here, so where will they put their money? From a global perspective, they will think that the United States is still the safest, so the money will stay there. This is what makes capital afraid to go out.

Another is to destroy your capital right on the spot, because the interest rate of the US dollar keeps rising, rising to 5.5%. Many people around the world deposit their money in the United States, how good it is to lie flat. Many companies can't make a net profit of 5.5% in the past two years. You don't have to work hard to deposit your money directly with the Americans and you can get a net return of 5.5%, and there is no cost. So many people deposit their money there. The Americans also know that you come here to get his interest, but he ended up bankrupting his own bank, so Silicon Valley Bank and Signature Bank went bankrupt last year. I saw a rumor on the Internet that the highest amount of principal deposited by a Chinese in Silicon Valley Bank was 4 billion yuan. His original idea was to get 5.5% interest, 11% for two years, and get more than 60 million US dollars in interest, but he didn't expect that he went bankrupt.

The bankruptcy law in the United States stipulates that no matter how much money you have deposited, whether it is 100 million US dollars, 600 million US dollars, or 6 billion US dollars, in one account, I can guarantee that you can get back 250,000 US dollars. You can't take away your 600 million US dollars, but you can take away 250,000 US dollars. You use it for interest, but it ends up using it for your principal. So in this process, some are happy and some are sad. The interest rate cut of the US dollar is a process, and it won't be so fast. It took 2 years and 4 months for the interest rate to rise, and it will definitely take one or two years for it to retreat. Don't expect it to drop to 5.0 today and drop to 0.5 tomorrow. So the interest rate cut of the US dollar is a process. This is the first point.

Second, the United States will definitely stir up trouble in China and Asia, so we must maintain strategic focus. After these two years, the world belongs to us. Many people ask, what does that have to do with ordinary people like me? In the short term, it won’t have much to do with me, but in the medium and long term, it will have huge benefits for China. The first is that the renminbi will appreciate. Everyone has seen this very quickly. It is predicted that in about a year, the renminbi may fall below 7 and come to between 6.3 and 6.7. If you are engaged in cross-border trade, if you are engaged in import and export business, you should pay attention. In theory, if the value of a country’s currency is going up, the country’s assets will definitely appreciate in theory, so the assets you own, in theory, have the possibility of appreciation.$NEIRO $TAO $WIF #HBO纪录片或揭示中本聪身份 #非农人数大幅升温 #加密市场反弹 #EIGEN、OP、ENA大额解锁 #Bitwise申请XRPETF