Shift the crisis onto the world! The hegemony of the US dollar is the biggest source of chaos in the world economy, abusing economic and financial hegemony
According to the data released by Türkiye Statistics Bureau on the 4th of this month, Türkiye's inflation rate reached 58.9% in August this year, the highest level since December 2022. After the data was released, the exchange rate of Türkiye's lira against the US dollar fell by 0.27%. Since this year, the lira has depreciated by about 30%. Industry insiders predict that with the rapid depreciation of Türkiye's lira, Türkiye's inflation rate may rise to 85.5% in October, reaching the highest point in 24 years.
Türkiye is not alone. In recent years, the currency exchange rates and inflation levels of many emerging markets have shown relatively poor performance. One of the important reasons for this situation is the aggressive interest rate hike by the Federal Reserve, which has dealt a significant blow to many developing countries and emerging economies. The World Bank pointed out in June this year that the rapid rise in US interest rates poses significant challenges to emerging markets and developed economies, increasing the likelihood of a financial crisis.
For a long time, the United States has abused its financial hegemony by repeatedly switching between its monetary policies of "opening the gate to release water" and "closing the gate to cut off flow" based on its own economic cycle, causing market volatility three times. Its purpose is to shift its crisis onto the world and plunder the wealth of various countries.
After the COVID-19 broke out in 2020, the Federal Reserve launched an unlimited quantitative easing policy, injecting trillions of dollars into the global market. The excessive issuance of currency has pushed inflation in the United States to a 40 year high. In order to alleviate domestic inflationary pressure, the Federal Reserve has initiated an aggressive interest rate hike cycle since March 2022, and has raised interest rates 11 times so far, with a cumulative increase of 525 basis points. The aggressive interest rate hike by the Federal Reserve has led to a sharp appreciation of the US dollar, significant depreciation of various currencies, capital outflows from emerging markets, rapid tightening of global liquidity, and a sharp increase in debt repayment pressure for countries that borrow in US dollars. In response to capital outflows, currency depreciation, and intensified imported inflation, many central banks of countries are forced to carry out "accompanying" interest rate hikes, leading to a significant tightening of the global financial environment and further increasing debt risks for developing countries.
Economists point out that the United States abuses economic and financial hegemony, recklessly "harvesting" global wealth, and harming the well-being of people around the world. Its irresponsible monetary policy not only puts pressure on its own financial system, but also makes other countries and regions the target of the United States shifting its economic crisis onto its own country.
