Recently, a large amount of dollars have returned to the United States. What should the United States do to reduce inflation? What do you think?
According to the usual experience, after the Fed raises interest rates on a large scale. Dollars will flow back to the United States. After all, the income in the United States is higher. On the other hand, because the interest rate has increased, the cost of holding funds has increased. Those who buy stocks from bank loans in the market feel that the return on investment in the stock market and the capital market is not so high, and only those stocks are uneconomical, so they will sell stocks and the stock market will fall.
After the stock market fell, many rich people's incomes fell, and once their incomes fell, their consumption would decrease. Once the consumption of purchasing power in a big country like the rich is reduced, the money for buying things on the market is reduced, and the money for buying things is reduced, and inflation is reduced. Then the dollar should have returned to American banks on a large scale or bought dollar bonds.
Usually, the way for the United States to harvest the world is when American banks and national debt have huge assets. Elsewhere, the recession caused by the outflow of dollars led to economic crisis. Stock markets in other countries may collapse, and many enterprises in other countries may close down. At this time, the US dollar made a big attack and seized the opportunity to buy the assets of countries where closed enterprises closed down, thus making a lot of money.
But this time, after the Fed raised interest rates, countries like China, Japan and Europe sold American debt in the opposite direction. After selling American debt, grab before the dollar accumulates to a certain extent. Inject capital into the place where the economy should have declined. In this case, the foreign dollars bought by the Federal Reserve after raising interest rates and received by the Bank of America are almost equal to the US debt reduced by Japan and other countries, that is, the actual outflow of dollars.
Besides, when Americans want to harvest cheap assets from other countries, they have already been preempted by other countries such as Japan, and they have already invested in it. Of course, in this process, the US stock market will still fall, so the logic of reducing inflation still exists.
There are other netizens' opinions: world scholars once said that as long as Biden spends all the money printed in the United States, or one-tenth of the world's dollars flow back to the United States, inflation in the United States will kill him! Be the next Zimbabwe! Russia has become a global dollarization in the battlefield of Ukraine, accelerating the return of dollars. The old beauty has now become a medical emergency!
First, the appreciation of the US dollar is in essence Ming Sheng's devaluation. Under the condition of high inflation in the United States, the equivalent money can't buy the previous equivalent goods and materials at all! Second, the US dollar raised interest rates, but the inflation of the United States, the interest he added could not make up for the inflation loss at all. As a result, those rich people in America don't necessarily stop buying assets in dollars to preserve their value. The more they buy assets to preserve their value, the more dollars they throw out. There's nothing America can do!
Look at the global dollarization and the return of dollars, adding fuel to the fire of inflation in the United States. The more money there is, the less materials there are. At the same time, the world began to trade in local currency, and it was easy for the dollar to go back, but difficult to come back! See what happens to America!