The world's eyes are focusing on a silent decisive battle. Trump and the Fed have been fighting wits and courage for several months, and the Fed has finally been unable to stand it. Powell has clearly hinted that interest rates will be cut in September. Once interest rate cuts are truly implemented, the fragility of the superficial prosperity of the US economy will gradually be exposed. But Powell did not promise that interest rates would be cut in September, and he left a step for his words.
Is this considered Trump's victory? We all know that since Trump began to implement the tariff policy, he has been urging the Federal Reserve to cut interest rates for several months. He even threatened to oust Powell. Now that Powell has given up, Trump must be happy.
In the US interest rate hike cycle over the past three years, high interest rates have attracted international capital inflows, bringing false prosperity. With more money, the economic data will naturally look good, and inflation will remain high. But this prosperity that is maintained by capital inflows is not solid. Once the Fed cuts interest rates and narrows interest rate spreads lead to capital outflows, the true face of the US economy will appear: the more interest rates are cut, many American companies that bear high costs will go bankrupt, and the employment rate will naturally decline.
The killer move of the United States is to start the "dollar tide". This operation once destroyed the Japanese economy in the 1990s. Now this trick is used for us: first cut interest rates and let the US dollar pour into China, push up asset prices, and create bubbles. The sudden interest rate hike will attract capital to return to the United States and drain the Chinese market. When the bubble bursts, companies burst, and assets fall to the end, then go back to buy at the bottom and eat up the core assets we have accumulated over forty years in one bite. That's how Japan fell. From semiconductors to automobiles, from real estate to finance, the United States has almost bought short high-quality assets from Japan's peak, causing Japan to fall into "lost thirty years." And now, they want us to become the second Japan.
Oriental Wisdom has already seen through this gameplay. Don’t follow the rise, don’t stimulate, don’t create bubbles. Experts fight, defend calmly and counterattack with each move. From igniting the real estate bubble in advance to squeezing out the stock market. From steady interest rate cuts and cautious releases to resolutely promoting technological independence. Let’s do one thing: delay time. Because time is our best friend, but the biggest enemy of the United States. The United States pays $1.2 trillion in interest on Treasury bonds every year. The longer the interest rate hike, the more likely the debt bomb will explode. my country is accelerating breakthroughs in chips, new energy, AI and other fields, breaking the blockade step by step. Once we complete industrial upgrading, the United States will have no bargaining chips.
This showdown has no draw, only win or lose. If the United States successfully reaps our country, it will continue to be the king. If our country withstands the pressure and achieves upgrading, we will reverse the situation and reshape the world pattern. At present, both sides have shown their trump card. What we are experiencing is a peak showdown in a game of great powers. The difference is that the United States only has one way to go for "financial war". my country has a manufacturing support and a market to buffer, and more and more technologies are breaking through blockades. This is no longer a question of "who can win", but a question of "who can't stand it first".
