National debt issued by various countries, whether domestic or international, has certain interest, which is equivalent to a certain return on investment. So generally speaking, issuing government bonds is a win-win situation. Because of strong economic strength and developed financial industry, many countries usually buy American debt. However, in the past two years, the Federal Reserve frantically printed money and repeatedly raised the US debt ceiling, which increased the risk of US debt because the United States owed more and more money.
In this case, the risk of American debt will be passed on to those countries that have bought American debt. Whether crazy America will explode is anybody's guess. Will the United States default because it has not paid its debts? Our country has purchased more than 1 trillion US dollars of US Treasury bonds, so our country is also very concerned about this issue.
A country with a particularly developed economy, the world's largest economy, suddenly began to issue American debt crazily, resulting in more and more debts owed by the US government. Last year, American debt exceeded $4 trillion. So far, the United States has accumulated $30 trillion in debt.
More seriously, the United States has no money to repay such a huge debt. Originally, the United States borrowed money and paid off a batch of debts, so it could live indefinitely. Us treasury secretary yellen called in June this year that if the us government could not raise the debt ceiling, the us would default on its debt. At that time, a disastrous and huge economic crisis was inevitable.
Now the international community is in a panic. Some countries have bought a lot of American debt, and some countries have long relied on the United States for economic development and have always been fans of the United States. In fact, it is right to worry, because the amount of debt owed by the United States is now too large to be repaid. We can look at the GDP of the United States last year. Last year, it was 2 1 trillion dollars, which is not as high as the debt of the United States. In other words, the American people only work, don't eat or drink, and can't afford to pay off such a huge debt in one year.
If you calculate this account carefully, the average American family will bear a debt of $280,000. It must be said that the debt owed by the United States today is the highest in history, and there is no guarantee that this figure will be broken in the future.
The United States blindly owes money, on the one hand because the United States is now plagued by the epidemic. Today, there are still more than 10000 confirmed cases in the United States every day, and 49 States are infected with the new mutant strain "Delta". The epidemic can't be effectively controlled, the United States can't resume work and production, and the economy can't recover. So we have to overdraw the credit of US dollars to print money, give money to the people and stimulate the economy. In this case, the unlimited expansion of the US debt ceiling is like a time bomb hanging over the US government.
So at this time, US Treasury Secretary Yellen stood up and shouted that if the high US debt ceiling is not mentioned, the United States will not be able to pay back the money, which will trigger an economic crisis, which is equivalent to igniting a bomb. Who is not afraid of the debt relationship between the international community and the United States now?
This will lead many creditors to want to sell American debt in succession, otherwise what will happen in the future? But if this is done, the goal of the US Treasury Secretary will be achieved. Because this is the way for the United States to harvest global wealth.
Some people may think that American debt has reached the point of selling. How to use it to harvest global wealth? First of all, we must know that American debt is bought with foreign exchange in the hands of various countries. Where does this foreign exchange come from? A country's industrial development will buy raw materials from other countries and sell them to some countries that need finished products. In this way, you can earn some difference. If these foreign currencies cannot be used directly in China, they will be converted into local currency, and if necessary, they will be converted into foreign exchange.
Foreign exchange earns a little more than it spends, so you can save some for a rainy day. For example, in recent years, the industrial structure of China has been transformed and the development of science and technology has been accelerated. Now I earn more and more, and the proportion of money spent on buying raw materials is getting less and less. Moreover, our country has less money to buy technology, because we have our own corresponding technology. Slowly from making money for processing, it has become making service fees and technical fees.
In addition, China now exports more and more products, and its trade surplus has also increased. The money earned is far higher than the money to be spent. We have been holding this money in our hands, and it may depreciate. In order to prevent this consequence, it is a wise decision to buy government bonds. This can greatly ensure that the money will not depreciate and there will be a little interest. As the world currency, American debt, combined with the strong comprehensive national strength and stable income of the United States, is the priority investment target of many countries.
Others, such as the euro and the yen, are not as stable as the dollar, because China may have to buy American debt to tide over the difficulties when the economic crisis comes. If we buy some international hard currencies, such as oil and gold, we will not have enough foreign exchange when we need foreign exchange to buy goods from other countries. In contrast, the US dollar is guaranteed by the US government and is also the world currency, so many countries buy US debt.
Does the United States dare to default? We can imagine that the national debt issued by a country is basically the embodiment of a country's credit. If the United States defaults, then America's credit in the world will disappear, which is likely to push a country to the abyss of destruction. Unless a country is cornered and about to fall, it will not dare to default easily.
In fact, judging from the law of economic development for such a long time, as long as a country issues treasury bonds, as long as the country does not collapse, then issuing treasury bonds and buying treasury bonds are both win-win. But if one country suddenly borrows a huge debt that may not be repaid, then other countries should be careful.
The United States will borrow so much money because the economy stagnated and the people lost their jobs during the epidemic, all of which need money to solve. After all, unemployed people need money to eat, soldiers need wages, scientific research needs money, and the president needs money for infrastructure or other projects. Although the tax revenue in the United States is not low, it still cannot make ends meet for all kinds of emergencies during the epidemic.
Therefore, US Treasury Secretary Yellen had to stand up and call on Congress to raise the debt ceiling and borrow new debts to repay old debts. However, there are some special things about American national debt. Because the United States has dollar hegemony as a weapon, the dollar is still the world currency, which is quite reliable.
America has been playing the trick of left hand in and right hand out. While raising the debt ceiling, the United States urged the Federal Reserve to print money. Even if no one buys the newly issued US debt, the Fed will only buy it by itself, and then the wealth of the rest of the world will be passively diluted. The more dollars are printed, the more risks these countries take.
Moreover, the United States really has a history of trying to get rid of debt. This can be traced back to 18 in the 1970s, when the United States was at war with Britain during the American Revolutionary War. The United States turned to France for help, and France happened to be competing with Britain for colonies. The United States and France attacked Britain together, and France gave a lot of money and military support.
However, after winning Britain, the United States reconciled with Britain a year later and tried to pay off its debts to France. As a result, the credit crisis has led to people's lack of interest in US Treasury bonds. For the sake of national interests, Hamilton, then US Treasury Secretary, made a speech to persuade Congress and the people to do their best to pay their debts in order to tide over the credit crisis.
It can be seen from this that a country may default if it is not for the unbearable consequences of debt default. Imagine, if a country's comprehensive national strength is very strong and it is no longer afraid of the consequences of default, can we still guarantee that this country will not default? The reason why the United States still talks about credit is only because if it really defaults, the consequences will be too serious. Weighing the pros and cons, the United States can't just default. Of course, other countries will also choose American debt, just because the United States is too big, and American debt is still a better choice.
So how does our country respond? First of all, we should try our best to promote the RMB and make it move towards the goal of more countries' foreign exchange reserves. Imagine that if all international trade between our country and other countries is settled in RMB in the future, and even international trade between some other countries is settled in RMB, then we can better develop our economy and enhance our international status.
Moreover, our country has been sparing no effort to promote the "Belt and Road Initiative". Our country has both US dollars and industrial products. Then we might as well invest in infrastructure development in these countries. When these countries are well developed, we can vigorously promote RMB in these places.
The United States and other western developed countries do not have this idea to help these developing countries develop their economies. However, China has always enjoyed a high reputation in the world and has been actively practicing the strategic policy of * * * common development. In addition, we have indeed made some achievements: eight countries related to the Belt and Road Initiative have started to establish RMB settlement systems, and the RMB cross-border payment system has covered more than 60 countries and regions.
When we say this, we don't mean that the hegemony of the dollar will collapse soon. Even though the United States is now facing such a serious debt crisis, considering the consequences of default, the United States may continue to repay its old debts. As the second largest holder of American debt, China cannot help worrying, but it should focus on developing itself. If our country is strong enough, debtor countries will be even more afraid to default. Moreover, we are strong and our international status has improved significantly, not to mention being controlled by others.
Of course, there is still a long way to go to push the RMB to a more sought-after position than the US dollar, and all these need our continuous efforts to achieve it as soon as possible.