Federal Reserve's "Strong contraction" policy calamity all over the world
Author:Henan Daily Client Time:2022.09.30
Xinhua News Agency reporter Fu Yunwei
The Fed announced last week that 75 basis points raised interest rates, which has raised interest rates for the third time this year. This shows that before the level of inflation has fallen significantly, the Federal Reserve will not stop its "strong contraction" policy.
Observed people pointed out that radical interest rate hikes are the strategy for the United States to repeatedly calculate after calculation, which is intended to borrow the US dollar hegemony to pass the crisis out of the country. It is essentially harming the self -interest and the world.
Global bitter beauty
Since March this year, the US Consumer Price Index (CPI) has increased by more than 8%year -on -year. Worried about inflation out of control, stimulating the Federal Reserve's sudden brakes and turning on monetary policy. Since March, a total of 300 basis points have been raised.
Out of consideration of defending the exchange rate of the local currency, preventing foreign investment escape, and curbing input inflation, many central banks have been forced to raise interest rates on the Fed. The World Bank recently pointed out that by 2023, the average level of interest rates of global monetary policy may rise to nearly 4%, which is more than two percentage points higher than 2021, which will suppress the world economy that is downturn.
Under the pressure of the Fed's "strong shrinkage", from Europe to Asia, from Latin America to the Middle East, many countries' local currency exchange rates fell to low points in the low point, input inflation pressures increased sharply, debt default risks rose, and the financial market shook fiercely. Some economies are difficult to choose between economic and stable exchange rates, and major western economies such as Japan and other major Western economies have even been forced to intervene in market stable exchange rates.
The Director of the World Bank Development Forecast Bureau, Aihan Cesse, pointed out that today's situation is similar to the debt crisis that is frequent in the 1980s, which is worrying.
In the early 1980s, due to factors and other factors such as the early currency easing policy, the U.S. inflation rate rose to dual digits. At that time, the Fed Chairman Paul Walk controlled inflation through continuous rate hikes. In order to create a debt crisis in many countries such as Latin America and other countries, it has fallen into long -term economic turmoil. In addition, before and after the outbreak of the Asian financial crisis and the international financial crisis, the United States has played a role in helping the flames.
The Spanish "Uprising" recently pointed out that some economists, including Milton Friedman, found that a series of Federal Real Estate attempts after World War II deliberately triggered economic recession to reduce inflation, and in Poland, Latin America , South Africa, South Korea, and other regions of Sahara triggers debt crisis.
"I am very worried that the same debt crisis chain may occur." Cecer said.
This concern is constantly becoming reality. Under the pressure of the Federal Reserve's "strong shrinkage", the recent recent debt repayment pressure from Sri Lanka, Pakistan, and Egypt was forced to ask the International Monetary Fund for help.
"US dollars" harvested the world
The crisis of artificial manufacturing and passing the crisis is the privilege of the United States. This privilege is based on the US dollar hegemony, that is, the US dollar is the unique status of the world's number one payment currency and reserve currency. At present, the US dollar's share in the global central bank's international reserve is still nearly 60 %, accounting for nearly 40 % of international payment.
The American Cable Television News Network pointed out that when the US economy is very strong, the US dollar will often appreciate; and when the US economy is weak and the world economy is facing recession, the US dollar will often appreciate. This phenomenon is usually called "US dollar smile" because the dollar will strengthen in both extreme conditions.
In other words, when the economy is expanding cycle, the Fed can allow cheap Wall Street capital to "siege the city slightly" through loose monetary policies to create bubbles and harvest the world through speculative transactions.
When encountering economic dilemma, the Fed tightens liquidity, increases the exchange rate of the US dollar, promotes the return of the US dollar, and boosters the domestic economy. Harvest global.
Under the current conditions, Washington obviously does not mind a decline with "strong contraction". Because, according to past experience, as long as you need to ensure that the situation of other economies is worse, you can make the recovery of the opportunity after a short fluctuation of the US economy.
A few days ago, Bloomberg published an article entitled "The United States is exporting inflation, and the Fed's interest rate hike will make the situation worse."
In addition, the Fed's "strong shrinkage" will deteriorate the economy of other countries through the manufacture of financial dilemma, triggering capital escape, and suppressing economic output. As the United States Cable Television News reported that the "US dollar smiling" frowned in other countries in the world.
Hegemony addiction is difficult to ring
Goldberg, a professor of economics at Yale University, pointed out in an article entitled "Federal Reserve's Invoic Inflation" in an article entitled "Federal Reserve's Infusion Can't Contain Inflation". The energy crisis caused by the shortage of labor and the upgrade of the Ukrainian crisis has also played an important role.
In other words, the simple "strong contraction" policy is conducive to curbing demand expansion, but it cannot solve the supply side of the supply side caused by complex factors such as geopolitical crises, protectionism and supply chain crises. To solve the problem of high inflation in this round of high inflation, combination therapy is required instead of blindly engaging in "strong contraction".
Analysts believe that for the US government, the correct policy options include and are not limited to: cancel unnecessary trade and investment barriers; to cool down the situation in Ukraine through diplomatic efforts, alleviate the energy and food crisis; take necessary measures to increase domestic labor participation rates ; Improve infrastructure, alleviate logistics bottlenecks; strengthen international policy coordination, etc.
Is it a new way to open the right and difficult to do, or the old road that continues the error but go?Washington obviously lacks the new vision and motivation of Ding Ding, and he can't hold back the impulse to use hegemony to pass on the crisis. He has gone further and further on the road of internal fiscal deficit and abuse of financial sanctions.The cost is constantly damaging and overdraft US dollar credit.The price is showing.According to data from the International Monetary Fund, in the fourth quarter of 2021, the share of the US dollar in the global central bank's international reserve fell to 58.81%, a new low of 26 years.
"U.S. monetary policy will eventually allow the United States to eat its own fruit. This is only a matter of time." Anna Marlin Bog-Uy, deputy director of the "Asian Century" Institute of Strategy in the Philippines, told Xinhua News Agency.
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