In fact, no matter what the CPI and non-agricultural data are like
Not important
Because the essence of data is to serve strategic goals
This round of interest rate hike + QT (quantitative tightening)
The Fed has exhausted its monetary policy toolbox
If we continue to tighten
The US banking industry will face a major crisis
The US stock market will also repeat the 2008...
● Interest rate hike: The federal benchmark interest rate reached a record high of 5.25%-5.5%
●QT: The size of the Fed's balance sheet has also returned to the "inflation is only temporary", that is, around the time Biden takes office in 2021
The reason why he still refuses to give up
Because the Fed has not yet achieved its goals.
The "harvest" of a certain Eastern country was completed through the interest rate differential - Failure
Suppressing high inflation by raising interest rates - Failed
●Financial “harvesting” level (US dollar repatriation):
Although the prices of various assets in the Eastern giant
Mainly because the property market and stock market have been under pressure
The exchange rate even surpassed the historical mark of 7.2 in the past decade.
However, through "counter-cyclical regulation" + "capital control"
At least the overall debt chain has been stabilized.
Even a Trojan horse like the "Evergrande crisis"
Nor did it cause systemic financial risks.
●Inflation level (purchasing power of US dollar):
The trade war that began in 2018 has
CN production + US consumption
The “RMB-USD” chain begins to disintegrate
The Russian-Ukrainian conflict + the Israeli-Palestinian conflict that began in 2022 has
OPEC Commodities + US Consumption
The “Petrodollar” Chain is Collapsing
BRICS countries begin to de-dollarize
The dollar's control territory is gradually shrinking
and lost the ability to transfer debt around the world.
This is also the core reason why US inflation is still high.
Even shale oil, a channel for "energy independence",
All of them are out of control due to the increasingly fierce party struggles.
From abroad to China, the "principle of not taking over each other's business" has been deeply rooted in people's hearts......
Looking back at history:
During the 2014-2018 interest rate hike cycle, the government only released interest rate hike signals.
The price of WTI crude oil was directly hit around 50
Then emerging economies including Brazil, Argentina, Türkiye
There has been a serious depreciation of the local currency + debt crisis
The final interest rate level was only maintained at 2.5%.
The current interest rate has reached 5% during the 2022-2024 interest rate hike cycle.
WTI crude oil prices are still in the high 80s
Currently, except Sri Lanka, all major emerging economies
There has been no serious economic and social crisis
This is a clear sign of the decline of the US dollar.
Once the goals of "financial harvesting" and "suppressing inflation" are not achieved
The Federal Reserve begins cutting interest rates
What awaits us is the rapid decline of the status of the US dollar.
Whether it is the huge level of US debt or the purchasing power of the huge amount of US dollars
There should be a big question mark
This will inevitably further accelerate the process of "de-dollarization" in countries around the world.
The "No Takeover Movement" will spread like wildfire and start a vigorous movement
Bitcoin ETF was quickly passed at this juncture
It can be understood that Wall Street is preparing for the collapse of the US dollar.
Currency = Goods + Currency
Since the Fed has exhausted its tightening tools at the currency level
So can we repair the relationship with CN+OPEC from the perspective of “goods”?
Find the target for re-anchoring the purchasing power of the US dollar to commodities + resources
This is the focus that deserves attention next
In exchange, the US will also give up some of its geopolitical interests.
This is a game that no one can afford to lose.
So no one will easily give in until the last minute.
On the other hand, the yen has been under pressure recently and many European countries have begun to cut interest rates
These are all signs that this round of major world situation evolution is coming to an end.
Will there be an unexpected "black swan"?
Let the bullets fly for a while...