When interest rates increase, the dollar becomes stronger and more valuable.
Goods imported into the US will become cheaper, because dollars will buy more.
And America's exported goods will become more expensive, forcing other countries to spend more money to buy them.
This is not beneficial for most countries, the stronger the country, the more damage it will suffer, because its influence goes deeper into the product composition, because everything is priced in US dollars, Therefore, input import costs of countries will increase.
For example: in China, Germany, or Korea, producing cars in the world. When the dollar increases in value, their currency loses value, they also have to import some input materials at high prices, because everything is denominated in dollars, a mechanism that the Fed has installed for many generations.
That's why the selling price of a car per team is high, that is, the cost of inflation is pushed onto consumers.
So the more a country has products sold worldwide to more users, the more strongly it will be affected, which is why Vietnam can avoid these inflations better than developing countries.
Research shows that when the dollar increases in value by 10%, the world's GDP will tend to decrease by 1% per year, but developing countries are more severely affected, decreasing by up to 1.5% per year. So it is said that the US exports inflation to the world.
And this cycle, experts estimate, always lasts at least 2 to 2.5 years, especially for countries that cannot withstand the heat, like Argentina, which owe more debt, because they previously borrowed in US dollars. , not only will the time period become more negative, but it will also incur high interest rates when the dollar increases in value.
This cyclical cycle is a way to attract all the resources and political power that runs a small country to a big country, all boiled down to the word "Debt".
Imagine, in the past they could borrow new debt to pay off old debt at low interest rates, but now they have to borrow new debt at high interest rates to pay off old debt, which means the debt is even more debt, the mother's interest is the child's interest, which is the interest rate. What about reverse double? The same goes for smaller models like our brothers who play real estate and borrow from banks. I understand why banks always give low interest rates for 1 or 2 years, then always return to real interest rates, floating according to the market, and the loan cycle is always the same. Does it have to last at least 10 - 20 years? Because that time is the time when you will definitely be caught in the world's rising interest rate cycle, it will be difficult to operate, and once you get stuck, you will be like poor countries, gradually losing the right to own many things.
The following article will write more clearly about "Debt" and how to handle debt, sell debt, package debt and how to never default on debt.
