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Dollar Plunges, US Economy on Brink of Recession, Collapse Inevitable
Recently, news about the collapse of the US dollar has sparked heated discussions.
On August 25th, Wall Street giant and American economist Peter Schiff warned of a significant drop in the US Dollar Index, stating that it could trigger a dollar crisis, leading to an economic collapse and causing consumer prices and long-term interest rates to soar.
On August 24th, the US Dollar Index fell to 100.68 points, hitting a 13-month low.
As the dollar fell, the euro, pound, and Singapore dollar all reached new highs.
On August 21st, the US Bureau of Labor Statistics released employment data from March 2023 to March 2024.
Over the past year, the revised number of new non-farm employment in the US was 2.1 million, a significant decrease of 818,000 from the previously announced 2.918 million. The revision is the highest in the last 15 years.
A decrease of 818,000 in employment over 12 months means a monthly reduction of 68,000.
The news caused a global sensation.
It is equivalent to saying that over the past year, the number of non-farm employment in the US was overestimated by 40%.
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Economists纷纷表示 that the actual employment situation in the US is very severe, possibly beyond everyone's imagination, and the US is on the verge of a recession.On August 23rd, in an effort to soothe market sentiment, Federal Reserve Chairman Powell declared at the Jackson Hole Central Bank Annual Meeting that the time for policy adjustments had arrived, hinting at an imminent interest rate cut.
Two years ago, shortly after the outbreak of the Russo-Ukrainian War, the United States initiated a new round of interest rate hikes, rapidly increasing the federal interest rate from 0.25% to 5.5%.
In a short period, a substantial amount of US dollars flowed back to the United States, leading to a sustained strengthening of the US Dollar Index and a sharp decline in currencies of other countries around the world.
Among them, the Japanese yen suffered the most significant drop. In early July of this year, the yen-to-US dollar exchange rate once plummeted to a 38-year low.
The yen was on the brink of collapse, just one step away.
Fortunately, the Bank of Japan withstood the pressure and continued to sell US Treasuries for three months, using the obtained dollars to buy a large amount of yen, ultimately stabilizing the situation.
After failing to reap the benefits from Japan, the US dollar lost momentum and began to weaken continuously, and currencies of other countries around the world launched their first major counteroffensive following the US interest rate hike.
The euro, pound, and Singapore dollar all reached new highs, and the yen, which had been suppressed for over a year, also made a strong comeback.
The US economy is not as good as it appears. A significant part of the growth in US GDP is due to the strengthening of the US dollar.
Once the US economy shows any signs of weakness, the market will immediately lose confidence in the US dollar, and the US Dollar Index will plummet.If the US dollar were to plummet by 30%, relatively speaking, the currencies of other countries would appreciate by 30%, leading to a significant reduction in the US GDP.
This is what the United States fears the most, as the US government is the most incompetent in the world, with a fiscal deficit of $1.7 trillion, ranking first globally.
Relying on beautiful lies, the US government has borrowed $35.21 trillion in debt from the outside world, with a per capita debt of $105,000.
With this debt, the US has been waging wars and spending $877 billion on military expenses, pointing fingers and instigating wars around the world.
Once the US economy begins to decline, the dollar will plummet accordingly.
At the same time, there will be a wave of selling US Treasury bonds.
With the dollar plummeting, Treasury bonds being sold, and a high fiscal deficit, the US government will be unable to continue.
One of the options is to follow the UK and declare government bankruptcy, and the US hegemony will disappear from then on.
The US Empire, which has been pampered, idle, and self-centered for more than 70 years, is unlikely to accept this option.
Next, there is the second option, to start the US dollar printing press and double the US money supply.This approach, while capable of addressing fiscal deficits, can lead to a significant devaluation of the US dollar. The extent of this devaluation could spiral out of control, such as by 60% to 80%. Once confidence in the US economy is lost, there would be a massive sell-off of the dollar, exacerbating its devaluation. It is evident that over-issuing US currency does not solve the problem. That leaves only the third option: initiating a war. The question is: where does the money come from? There is but one way: to continue to break through the debt ceiling and issue more US Treasury bonds. Another question arises: who will buy them? Japan has already sold off $70.1 billion worth of US Treasury bonds over three consecutive months. Other US allies, such as the United Kingdom and Canada, are also in poor fiscal health, with the UK government having just announced bankruptcy. Without money, would the US dare to risk going to war?It's highly unlikely.
What to do in the end?
Delay, drag it on until the end, and turn it into a severe condition.
Shiff claims that the US Dollar Index will break its 2020 lows by 2025, triggering a dollar crisis and leading to an economic collapse.
Believe it or not, an economic collapse in the United States is bound to happen, as it is an unsolvable problem.
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