Thread by @Dragondescendan

This is my analysis of the major issues that are currently emerging in the US and the future trend of China-US relations. If the US does not actively seek to improve its relations with China and stops suppressing China, the results will be tragic.(1/n)

Since the outbreak of the COVID-19 pandemic in 2020, the US has only one way to deal with the economic crisis, and that is to print money. Countless US dollars flowed into the market, therefore the Fed’s assets and liabilities expanded by more than 50% within a year.(2/n)

The US has printed about 10 trillion US dollars, but why the huge amount of US dollars did not cause inflation? The main reason is that the supply of goods exceeds demand. In the past, as the world’s No.1 country in commodity production,(3/n)

China was very weak when the supply of commodities exceeded demand, so China could only follow the US to print money. For example, if the US prints money but China does not print it, it will result in the appreciation of the RMB, which will also cause(4/n)

the price of China-made goods to rise in overseas, leading to difficulties in exporting. As the RMB appreciates, commodities priced in dollars will become cheaper, so China's imports will increase. Then the export volume will decrease and the import volume will increase.(5/n)

This will make the survival of China's manufacturing industry difficult. Therefore, China must follow the US to print money. But! All this has changed in 2020! The entire world market has become in short supply. Since the outbreak of the pandemic in 2020,(6/n)

China's success in fighting the pandemic has made China became the only country in the world that can produce goods normally. Due to the pandemic, many countries in the world were under lockdown, which makes their production of goods is almost zero,(7/n)

and that also led to a serious shortage of various goods in the world. So no matter how many goods China produces, it all can be sold. Last year, China’s entire foreign trade export orders increased dramatically,(8/n)

so this time China did not follow the US in printing money, and the RMB experienced rapid appreciation compares to the US dollar. Since the US launched a trade war with China, the US has imposed a 25% tariff on Chinese goods,(9/n)

and the trade deficit between China and the US has reached a new high. According to the customs data in last month, China-US trade increased by 41%. This shows that even if the price of the Chinese goods increase by 25%,(10/n)

Americans will still have to buy more than before. Because only China can produce large amounts of goods currently in the world, although the US originally wanted to support India to become the next "world factory", the pandemic broke out in India.(11/n)

When the US was continuing to print money, it never imagined that China could actually increase the prices of exported goods, and the US could only accept it silently. At present, the CPI in the US has exceeded 5%,(12/n)

and some experts even predict that this number may reach 20% next year. At the same time, 80% of the GDP in the US comes from the tertiary industry. In the tertiary industry, financial services account for a large part,(13/n)

and the US stock market is the core of the financial services industry. Therefore, no matter who is the president of the US, the stock market always comes first. For American citizens, what they are facing is that the prices of those daily supplies have risen sharply,(14/n)

but their salary have not risen, which will cause very serious social problems. In order to fill the gap caused by rising price of daily supplies, Americans must withdraw part of their funds from the stock market, and then after a large number of Americans sell stocks,(15/n)

the stock market will fall, and the decline will cause more people to sell stocks. So if the US wants to keep the stock market, it must find a way to save itself. The easiest way is to abolish the 25% tariff on Chinese goods,(16/n)

so that as soon as the price of the Chinese goods falls, inflation can be temporarily suppressed. But abolishing tariffs means that the US has surrendered to China in a trade war, and surrendering is the most serious hit to the US hegemony.(17/n)

So this method is the easiest but also the most difficult choice for the US. The second way is to stop the "pump priming" of the US dollar and raise interest rates to recover excessive US dollars, but Biden dare not do this,(18/n)

because as long as he dares to raise interest rates, the US stocks will collapse immediately. The third method is to support another "world factory" to bring the world back to a state of oversupply, but this is also impossible.(19/n)

The final solution is to force China to lower the RMB exchange rate, in order to get rid of the consequences of inflation for the US. Therefore, we can see that the US played a lot of cards, like Hong Kong, Taiwan and Xinjiang…(20/n)

their main purpose is to force China to submit to the US. But these things will not have any substantial impacts on China. The US has offended China, the only "world factory" in this era of short supply. This is obviously not a wise choice.(21/n)

Nowadays, China is rising rapidly, while the US is declining rapidly. If the US does not accept this fact, it will only cause more serious consequences. If this inflation continues, and the US does not seek help from China,(22/n)

then the collapse of the US economy is an inevitable result. And for China’s help, is the US willing to give the price that China wants? For example, the issue of high-tech blockade, the Taiwan issue, etc., these cards are all that the US cannot give up.(23/n)

But when the US can't make it through, the US will still seek help from China. Because after all, it is more important to survive, and this day will not be too far away.(24/n)