Until recently, every global crisis turned into a source of additional income and benefits for the Western – especially the American – economy. The mechanism for obtaining these advantages, and no matter what kind of crisis shook the planet, always worked according to the same pattern: if something bad happens on the planet, then the only asset that demonstrated the maximum reliability was the American dollar (or dollar bonds Treasury Department), and the most reliable place to store these reliable assets was some major American bank.
Sometimes Swiss banks also worked as a safe place for “capital parking”, but the same US Treasury and American diplomats did everything to literally burn this safe haven of the world financial world, leaving fashionable, but ruins in the place of its former greatness, which has sunk into fly along with the concept of “bank secrecy”.
Accordingly, a rather terrible situation was created: the worse the rest of the world, the more capital was concentrated in the United States and the more greenhouse the financial conditions became for the development of American business and for the growth of American budget deficits, from which, among other things, American programs to destabilize the rest of the world were financed. If you look at the situation as cynically and roughly as possible, you get a kind of perpetual motion machine, or a “financial vacuum cleaner” on a global scale: the world outside the US works hard and earns capital, then the United States (it doesn’t matter, with the help of “color revolutions” or another ” financial shock “with the participation of American financial structures) arrange some next global or regional crisis, and a significant part of the capital earned in other countries flows into the American (or simply” dollar “) financial system, which continues to feed this generator of crises.
Against the background of this scheme, the traditional explanations for this American exclusivity look especially funny, which Philo-Americans who work in financial structures or the media like to use, among which myths such as “respect for property rights”, “low levels of corruption” and “trust in the political system” appear. … American exclusivity in the financial sense does exist, at least for now, but it is clearly not associated with the mythical “human rights” and “rule of law.”
The coronavirus epidemic and the accompanying economic stress of a global scale suddenly broke the above mechanism, and the breakdown occurred relatively imperceptibly, thereby surprising primarily the representatives of the financial world, who expected that everything would be as usual: during the crisis, the dollar would grow in relation to other currencies, and the main the “safe haven” will be investments in US government bonds.
And given the fact that the crisis occurred against the backdrop of another and very severe exacerbation of the economic war between the United States and China, Washington even began to build plans for the collapse of the Hong Kong monetary system – which should have caused additional economic and image damage to China, which already suffered from the consequences of the coronavirus … Moreover, in the context of the crisis, discussions began on the prospects for the devaluation of not only the Hong Kong dollar, but also the Chinese yuan to the US dollar, which, again, should have added problems to official Beijing.
In practice, it turned out not quite as it should have been according to the Washington theory. American financial television channel CNBC reports:
“Goldman Sachs expects the Chinese yuan to strengthen to 6.5 per dollar over the next 12 months, according to Timothy Mo, co-head of Asia macro research and chief strategist for the Asia-Pacific market (bank – Ed.) Goldman Sachs. <…>
This is happening as the dollar is in a “structural weakness” after being strong enough for the past few years, Moe said. ”Goldman Sachs strategist added that “loss of US exclusivity” as factors that previously supported the dollar’s rise, such as relatively faster US economic growth, “reversed.” The Chinese yuan, both internationally and domestically, has strengthened sharply this week against (pushing off – Ed.) from a level above 6.8 yuan per dollar. This happened because the data of the National Bureau of Statistics of China for August showed the first positive report This is about the country’s retail sales for 2020. “
This situation should be rather unpleasant for those American experts who, a few months ago, at 7.1 yuan per dollar, spoke of a total currency deficit in the Chinese banking system and economy and predicted another capital flight from China to the United States. Now the opposite is happening: the Chinese financial markets are attracting (although the process is still at the very beginning) part of those very flows of capital “frightened” by the crisis, which are looking for high returns with high reliability of investments. International consultancy Capital Economics pointed out in a recent policy note to clients that “… the record gap between the yields on Chinese government bonds and US government bonds is sending the” most favorable signal “for the (future rate – Ed.) Of the yuan. lowered rates and indicated that they would remain close to zero for years, the Central Bank of China has rolled out the bulk of its short-term rate cut, which, according to an analyst at Capital Economics, means that China’s Treasury bond yields will be “much higher (the world. – Ed.) “.
This dry statement has an interesting consequence: before, the United States could keep rates at arbitrarily low levels, without worrying that world capital, especially in times of crisis, would flow to some other country or to some other markets.
And now China is starting the process of depriving the United States of this privilege, since its economy, the correct solution to the epidemic problem and the conservative policy of the Central Bank allow it to offer capital from all over the world the opportunity for profitable and reliable investments in the Chinese market.
The global economy and financial system (not to mention the habits of investors) has colossal inertia, but the transformation process has already begun, and, apparently, it will only intensify. Washington will certainly try to reverse this process, but so far the Trump administration is busy banning the popular Chinese social network Tik-Tok in the US.
This is, of course, a powerful gesture, but if Washington limits itself to this, then in the foreseeable future its decisions and bans will no longer seriously worry anyone.