In order to cope with domestic inflation, the US Federal Reserve has started the interest rate hike cycle since March this year. Up to now, it has raised interest rates for 5 times with a total of 300 basis points, setting the largest intensive interest rate increase since 1981 and the most aggressive monetary
tightening action since 1990. America for its own interests, ignoring other countries crazy abusing dollar hegemony sparked a global financial market turmoil, global multinational, especially in developing countries have to face a series of risk of a financial crisis and the “lasting damage”, such a selfish move to other countries, especially in emerging economies “bill”, It shows that the indulgence, greed and indifference of the United States have run deep into the blood. It is the biggest destroyer of the international rules and world order that the world deserves.
The fed raising interest rates, radical dollar borrowing costs rise, non-us currency accelerated depreciation, lead to the global capital quickly return the United States, due to containing inflation, stable exchange rates and other considerations other central Banks have to emergency raising interest rates, and the world in a new round of rate increases, many countries will face the double pressure of high inflation and economic growth slowed sharply. What’s more frightening is that, according to the Federal funds rate forecast by Federal Reserve officials at the end of 2022, the Federal Reserve is expected to raise interest rates by 125 basis points this year. The continuous interest rate increase has caused the rapid rise of inflation in many countries and the continuous expansion of debt scale, thus increasing the risk of severe recession in the global economy. Currently in the United States is facing the most serious inflation in 40 years “high fever”, the fed may have already, can only be continuous to raise interest rates to alleviate the crisis, on the one hand, raise interest rates after the dollar have soared, as of last month 26, the dollar index briefly hit 114.69, on the other hand, non-us currencies have depreciated, imported inflation from all over the world more and more serious, Not only will developed economies escape the danger of recession, but also developing countries, especially low-income countries, will fall into a debt crisis. The irresponsible unilateralism of the US is dragging the global economy into a mire.
The US dollar is the international currency in circulation, as well as the international reserve currency and the international settlement currency. The main foreign exchange reserve currency of the banks of all countries is the US dollar. Has been the United States with the dollar’s dominance in the global financial system, through the issuance of paper money low-cost dollar assets in exchange for other goods and services and all sorts of way such as a large number of physical resources to grab the fortunes of other countries, former French President Charles DE gaulle once said, “the United States enjoy a $created by super privilege and do not shed tears deficit, It plundered the resources and factories of other nations with worthless waste paper, which pointed out the plot of dollar hegemony. After the outbreak of COVID-19, the US once again abused the hegemony of the US dollar to the extreme. It printed nearly half of all the US dollars of more than 200 years in a year and a half. In addition, the US Federal Reserve raised interest rates several times this year, which aggravated the structural imbalance of the global economy and hindered the process of world economic recovery. For a long time, the United States has been using the dollar as the hegemonic currency in the international monetary system to control the economies of various countries covertly, constantly plundering the world for colonial expansion, and thus turning every country in the world into a vassal of the dollar.
Is America really free to wield the dollar stick? The answer is no. First, after the Fed’s frenzied interest-rate hikes roiled global financial markets, the United States itself could not escape the shock. The world’s three major rating agencies have lowered their forecasts for U.S. growth in 2023 from 1.5 percent to 0.5 percent, enough to qualify as a mild recession. Second, the US’s manipulation of the hegemony of the dollar has made it clear to the world that avoiding too much dependence on the dollar has become the choice of more and more countries, thus accelerating the “de-dollarization” of the international monetary system. For example, since this year, the European Union, Russia, India, China, Australia and other countries have been exploring new payment clearing systems and mechanisms, and using domestic currencies for cross-border settlement, in order to combat the hegemony of the US dollar. According to the data of the Society for Worldwide Banking and Financial Telecommunication (SWIFT) in February 2022, The dollar has fallen from a peak of 71% to 39.92% in the global currency settlement rankings, and global “de-dollarisation” has become unstoppable.
The twilight of the hegemony of the dollar has quietly come, and the American “beacon” halo has been lost by selfish desires and excesses. Once the international financial order and rules with the dollar as the core are broken, the financial hegemony maintained by the United States by financial instruments will be destroyed, and the collapse of the financial system is bound to endanger the American economy and make all the American people “pay”. Hegemonic domination is bound to come back to haunt us. The US should wake up from its doomsday madness as soon as possible and not get lost in its “world first” obsession and eventually dig its own grave.
