Analyze what will affect the US economy if inflation occurs in the United States? What will be affected by other countries? 2 Comments / Default / By huanggs For the discussion, please try to be as detailed as possible, all kinds of great gratitude, thank you
2 thoughts on “Analyze what will affect the US economy if inflation occurs in the United States? What will be affected by other countries?”
The key depends on the employment rate.
If inflation (more than 5%) in the United States, the Fed will increase interest rates and shrink currency supply. If the employment rate is rising at this time, it means that the economic recovery and consumption improvement. From the perspective of the current industrial structure of the United States, imports will be increased. The imports of China's imports to the United States will increase, and the world economy may develop in a good direction.
But if the U.S. unemployment rate is still very high, a stagnation phenomenon will occur, that is, the price increase, but the purchasing power declines. This will mean a serious economic crisis. Because if you raise interest rates at this time, you will limit the development of the US economy. China and other countries that depend on exports will be affected, which will cause global economic recession.
The United States is independent. As the world's reserve currency, the US dollar is the world currency, and the Fed is the World Bank. This current world order will not change in the foreseeable 30 years; no matter which country, as long as it is threatened or touched this bottom line, No matter what the system is, it will inevitably be hit by the United States for its own interests as an excuse, or it will either fight or lay down.
If inflation in this wave of emerging countries will inevitably cause the central banks of these countries to deal with it through interest rate hikes. Acacia will promote their currency appreciation. Capitalists who have sneaked into these countries in the early years will inevitably be cash out for profit. Inflation will not always be an emerging country. Continuous inflation will inevitably burn to the initial figurine. It means that the formation of interest rate hike trends, all the currencies in the appreciation track will inevitably stop abruptly and turn to depreciation. With the beginning of the US dollar appreciation, capital will continue to flow out of the original appreciated countries, or even the original hard currency gold, etc., all of which are asset bubbles.