Today, the United States can be said to be the largest "printing machine" in the world. With the hegemonic system of the US dollar in the world, almost all foreign exchange trade and commodity transactions in the world are settled in US dollars, while the United States can almost collect "stamp duty" from the world to make money. On the other hand, by issuing US Treasury bonds on a large scale, the United States can repatriate the funds earned from investors and investment institutions, and then use the returned funds for other investments. Playing games in Qian Shengqian is a very pleasant thing.
However, with the decline of the global influence of the United States in recent years and some bugs in the dollar system, the good days of the dollar are not over yet, but they are not so good, especially in the past two years, the American economy has been hit like never before. In order to save the American economy, the United States once again offered its own "ultimate magic weapon"-loose and unlimited quantitative monetary policy. No one will print money crazily without limit.
According to relevant statistics, in order to cope with the economic blow brought by COVID-19, the Federal Reserve printed more than 300 million US dollars last year. At the same time, the United States offered a second magic weapon, "US Treasury bonds". So far, the size of US Treasury bonds has reached 29 trillion US dollars, which means that the United States unilaterally owes 29 trillion US dollars to other countries or investment institutions and investors.
The United States owes 29 trillion foreign debts. Why can't the Fed start printing money to pay off its debts? Although the United States is still the largest economy in the world, the debt of $29 trillion is not easy to bear. Some people will say that the United States has started an unlimited monetary policy, and it is not easy to pay off this $2.9 billion debt. Just keep printing money like crazy. Anyway, the dollar is produced in the United States, and the government bonds sold are also settled in dollars. Isn't it just right to produce dollars to pay off debts?
If you think so, you think the world economy is too simple. If the Federal Reserve "printed" 29 trillion yuan and paid back the money it owed, what would the world be like? Generally speaking, although the hegemonic position of the US dollar has been declining in recent years, it is still the mainstream currency in global circulation. If the United States wants to fill its 29 trillion national debt, it can indeed solve the problem by printing money continuously, but at the same time it has to bear the huge social and economic collapse brought about by the inflation of the US dollar, which may be unbearable for the United States. In fact, the Federal Reserve's "big water release" to the US dollar last year has devalued the US dollar by more than 1 1%, which has caused great troubles to the whole world. The shadow of another economic crisis is becoming more and more obvious. If we want to fill in the 29 trillion national debt, the consequences will be unimaginable.
Let's give a simple example. Let's see what kind of bitter fruit it will bring if we really print money indefinitely. I believe everyone is familiar with Zimbabwe. Forty years ago, in the era of 1980- 1990, this country in the south of the African continent was still a very rich land, and its people lived a colorful life. At that time, the exchange rate between Zimbabwean currency and US dollar can be stabilized at 1: 1.47.
However, since the Millennium, Zimbabwe's overall economy has been declining and suffered an unprecedented economic crisis. At this time, Zimbabwe has adopted a strategy that seems to be able to cope with the crisis, but in fact it has a huge crisis-increasing the printing of money. The amount of money is directly and positively related to the price of goods, that is, the value of money itself is worthless if it is printed more. This is a word we often see. Once inflation occurs, commodity prices will rise. The higher inflation, the higher commodity prices. Zimbabwe directly stepped into this trap from the beginning, and the prices of the whole country soared like a rocket. Even Zimbabwe's currency with a face value of100000000000000000000000000000000000000000000000000 has started to circulate in China, as a direct result, Zimbabwe had to push it to the streets to buy a dish.
That is, since then, Zimbabwe's entire social economy has completely collapsed. Once this currency has become less and less valuable, the basic national currency has come to an end. So in the ninth year of the Millennium, Zimbabwe's local currency declared bankruptcy, and it was forced to start using currencies with higher value in global circulation, such as the US dollar. The national economy shrank completely because it did not have its own currency, and the country's luck was almost in the hands of outsiders.
Although the family business in the United States is huge, it is impossible for the United States to bear the huge hidden dangers brought by the unlimited issuance of banknotes to its own economy. In addition, it should be noted that the global issuance of US Treasury bonds depends on the credit of the United States and the US dollar. Although the United States likes to be shameless, the credit of the US dollar is quite reliable. It has been more than 100 years since the establishment of the Federal Reserve, and the history of the United States has been more than 200 years. In the past two centuries, although the United States has some "notoriety", American national debt has been very trustworthy and there has been no default. In addition, although the national debt issued by the Federal Reserve has reached 29 trillion, more than 70% of it is actually digested by the United States itself. If the United States wants to print more money to solve the debt problem, I am afraid that consortia and organizations within the United States will be the first to jump out and oppose it.
Even so, the United States is getting farther and farther on the road of its own collapse. American economists and various tycoons are not unaware of the great harm of printing money, but they began to "release water" to the US dollar last year, which is also a helpless move to save the US economy. After all, the economic system of this country is very different from that of China.
Stimulated by the continuous "water release" of the US dollar, the US dollar continued to depreciate, and the prices of hard currency commodities such as crude oil and steel continued to skyrocket since March last year. The dollar in the hands of countries that use the dollar as their foreign exchange reserves has also become less and less valuable, which means that the credit system of the dollar has begun to appear huge cracks. Therefore, since last year, there has been a wave of "dollarization" of currency around the world.
Last year alone, 15 countries including Japan, India and Saudi Arabia began to reduce their holdings of US Treasury bonds. In the past two years, China directly sold more than $52 billion of national debt like a hot potato. Not only that, European countries, Japanese countries and some countries in Southeast Asia also began to try digital currency to find a way to replace the US dollar settlement.
In other words, the good days when the US dollar continues to be the world's currency hegemon have basically begun to decline. At present, the global digital currency has become the general trend, which is by no means that the United States can use economic means to reverse Gan Kun. Therefore, it remains to be seen whether digital currency can succeed in the future, or whether the world's strongest currency, the RMB, can become a global currency.