Why doesn't the US announce that all 35 trillion US debt will be abolished? In fact, Dongda University doesn't want the US to announce that 35 trillion US debt will be abolished. As long as the US declares that 35 trillion dollar will be abolished. The US dollar hegemony is not only abolished. Even the US economy has been directly wiped out to the end and collapsed.
The astronomical figure of 35 trillion US dollars is equivalent to 130% of the GDP of the United States, and every American is carrying $100,000 in debt on his head.
Uncle Sam was overwhelmed by the mountain of debt, spending more than $1 trillion a year on interest alone, more than the U.S. military spending.
Faced with such a heavy burden, some people naively think: Since you can't afford it, simply write it off, wouldn't it be a hundred?
However, this seemingly attractive solution is actually the key to Pandora's box. Once opened, it will release the demons that devour the American and even the global economy.
In 1974, the United States and Saudi Arabia reached an agreement establishing the iron rule that oil must be traded in dollars, a system that has continued for 40 years to become the lifeline of global energy transactions.
Tens of millions of barrels of oil are traded every day, contributing to the hegemony of the US dollar. At the same time, the SWIFT financial network is like the highway of the US dollar.
Last year alone, 42 million cross-border transactions were completed through this channel, involving a total amount of US$150 trillion. From gold to copper mines, from soybeans to coffee, the pricing power of global commodities is firmly in the hands of the US dollar.
More importantly, the US dollar, as the safe of central banks, accounts for more than 60% of the global foreign exchange reserves. These invisible pillars together build the foundation of the US dollar empire.
Once the United States declares a debt default, the first domino to fall will be credit bankruptcy. U.S. Treasury bonds have always been regarded as the safest risk-free asset in the world and are the ballast stone for central banks, pension funds, and insurance companies.
As soon as the debt goes away, the assets will turn into a pile of waste paper, and the international rating agency will immediately scratch the U.S. credit rating to the rubbish level, triggering an unprecedented degradation storm.
Immediately after, the second card falls, the domestic financial tsunami, the U.S. home pension funds, insurance companies hold a large amount of U.S. debt, the instantaneous evaporation of assets will trigger panic crash, the banking system faces collapse, and the credit market is completely frozen.
The third card is a global chain reaction, with major holders of U.S. debt such as China and Japan facing a serious financial crisis, and the international trade system being paralyzed by the loss of a universal settlement currency.
The U.S. economy will experience an unprecedented end-to-end collapse, Wall Street, the former world’s financial center, will become a ruin, and the Dow Jones Index could fall by more than 90 percent.
The real economy has also worsened, enterprises are unable to get financing, factories are closed, and the unemployment rate has risen to more than 30%, repeating the tragedy of the Great Depression.
Tens of millions of middle classes went bankrupt overnight, social contradictions intensified, and violent incidents occurred frequently. The United States will become a financial pariah of the international community from a superpower.
At the same time, the collapse of the dollar belief will trigger countries to fight to sell the dollar assets and find alternative currencies, and the RMB will become the most powerful competitor with our strong manufacturing power and stable political environment.
The euro, as the collective credit symbol of the old-fashioned economies, will also be shattered, and even decentralized digital currencies may emerge and the world will enter a new era of a multi-polar monetary system.
Even if the United States chooses to print money to pay its debts, it will only jump into another trap. The introduction of US$35 trillion in money will trigger hyperinflation, repeating the historical tragedy of using trolleys to load money to buy bread during the Weimar Republic.
The Federal Reserve's monetary policy tools will be completely invalid, and it will no longer be able to regulate the economy by raising and cutting interest rates. What is even more ironic is that other countries can use the flooding of dollars in their hands to in turn acquire high-quality assets in the United States and complete a historic reverse harvest.
Faced with such a predicament, the United States is caught in a dilemma. Maintaining the status quo means that the debt snowball is getting bigger and bigger, and it will one day crush the whole system.
Radical reform will touch vested interest groups such as Wall Street, with huge internal resistance; Strategic contraction is tantamount to admitting decline and voluntarily giving up hegemony.
Perhaps the only way out is to opt for gradual adjustment and achieve a soft landing strategic exit through measures such as reducing military spending, raising taxes, and reforming the welfare system.
History tells us that without an eternal empire, $35 trillion in debt may be the tombstone of American hegemony, and the world is witnessing the end of an era.
The world is at a turning point in history, the old order is collapsing, the new order is not yet established, a process full of uncertainty and risks, but also enormous opportunities.
For China, this is a historic window to realize national rejuvenation. We should not only maintain strategic strength and steadily promote the internationalization of RMB, but also prevent the United States from jumping over the wall and passing on the crisis through extreme means.
At the same time, we should also realize that a stable international financial order is in the interests of all countries. While promoting change, we should avoid systemic collapse and realize a smooth transition between the old and the new order, which requires the wisdom and responsibility of big countries.
The world of the future will no longer be dominated by a single hegemony, but a new pattern of mutual balance and win-win cooperation between multiple power centers, in which each country needs to find its own position, grasp the pulse of the times, and open a new scene in the change.
The astronomical figure of 35 trillion US dollars is equivalent to 130% of the GDP of the United States, and every American is carrying $100,000 in debt on his head.
Uncle Sam was overwhelmed by the mountain of debt, spending more than $1 trillion a year on interest alone, more than the U.S. military spending.
Faced with such a heavy burden, some people naively think: Since you can't afford it, simply write it off, wouldn't it be a hundred?
However, this seemingly attractive solution is actually the key to Pandora's box. Once opened, it will release the demons that devour the American and even the global economy.
In 1974, the United States and Saudi Arabia reached an agreement establishing the iron rule that oil must be traded in dollars, a system that has continued for 40 years to become the lifeline of global energy transactions.
Tens of millions of barrels of oil are traded every day, contributing to the hegemony of the US dollar. At the same time, the SWIFT financial network is like the highway of the US dollar.
Last year alone, 42 million cross-border transactions were completed through this channel, involving a total amount of US$150 trillion. From gold to copper mines, from soybeans to coffee, the pricing power of global commodities is firmly in the hands of the US dollar.
More importantly, the US dollar, as the safe of central banks, accounts for more than 60% of the global foreign exchange reserves. These invisible pillars together build the foundation of the US dollar empire.
Once the United States declares a debt default, the first domino to fall will be credit bankruptcy. U.S. Treasury bonds have always been regarded as the safest risk-free asset in the world and are the ballast stone for central banks, pension funds, and insurance companies.
As soon as the debt goes away, the assets will turn into a pile of waste paper, and the international rating agency will immediately scratch the U.S. credit rating to the rubbish level, triggering an unprecedented degradation storm.
Immediately after, the second card falls, the domestic financial tsunami, the U.S. home pension funds, insurance companies hold a large amount of U.S. debt, the instantaneous evaporation of assets will trigger panic crash, the banking system faces collapse, and the credit market is completely frozen.
The third card is a global chain reaction, with major holders of U.S. debt such as China and Japan facing a serious financial crisis, and the international trade system being paralyzed by the loss of a universal settlement currency.
The U.S. economy will experience an unprecedented end-to-end collapse, Wall Street, the former world’s financial center, will become a ruin, and the Dow Jones Index could fall by more than 90 percent.
The real economy has also worsened, enterprises are unable to get financing, factories are closed, and the unemployment rate has risen to more than 30%, repeating the tragedy of the Great Depression.
Tens of millions of middle classes went bankrupt overnight, social contradictions intensified, and violent incidents occurred frequently. The United States will become a financial pariah of the international community from a superpower.
At the same time, the collapse of the dollar belief will trigger countries to fight to sell the dollar assets and find alternative currencies, and the RMB will become the most powerful competitor with our strong manufacturing power and stable political environment.
The euro, as the collective credit symbol of the old-fashioned economies, will also be shattered, and even decentralized digital currencies may emerge and the world will enter a new era of a multi-polar monetary system.
Even if the United States chooses to print money to pay its debts, it will only jump into another trap. The introduction of US$35 trillion in money will trigger hyperinflation, repeating the historical tragedy of using trolleys to load money to buy bread during the Weimar Republic.
The Federal Reserve's monetary policy tools will be completely invalid, and it will no longer be able to regulate the economy by raising and cutting interest rates. What is even more ironic is that other countries can use the flooding of dollars in their hands to in turn acquire high-quality assets in the United States and complete a historic reverse harvest.
Faced with such a predicament, the United States is caught in a dilemma. Maintaining the status quo means that the debt snowball is getting bigger and bigger, and it will one day crush the whole system.
Radical reform will touch vested interest groups such as Wall Street, with huge internal resistance; Strategic contraction is tantamount to admitting decline and voluntarily giving up hegemony.
Perhaps the only way out is to opt for gradual adjustment and achieve a soft landing strategic exit through measures such as reducing military spending, raising taxes, and reforming the welfare system.
History tells us that without an eternal empire, $35 trillion in debt may be the tombstone of American hegemony, and the world is witnessing the end of an era.
The world is at a turning point in history, the old order is collapsing, the new order is not yet established, a process full of uncertainty and risks, but also enormous opportunities.
For China, this is a historic window to realize national rejuvenation. We should not only maintain strategic strength and steadily promote the internationalization of RMB, but also prevent the United States from jumping over the wall and passing on the crisis through extreme means.
At the same time, we should also realize that a stable international financial order is in the interests of all countries. While promoting change, we should avoid systemic collapse and realize a smooth transition between the old and the new order, which requires the wisdom and responsibility of big countries.
The world of the future will no longer be dominated by a single hegemony, but a new pattern of mutual balance and win-win cooperation between multiple power centers, in which each country needs to find its own position, grasp the pulse of the times, and open a new scene in the change.