The Federal Reserve just cut interest rates, and the global market has gone wild.

At least a trillion dollars will flow into China.

Are our good times coming?

Will the United States just sit back and watch?

The financial war has been declared a failure, what other moves has the United States prepared?

To understand these questions, we must first know why the impact of the Federal Reserve's rate cut is so significant?

The Federal Reserve is essentially the central bank of the United States.

Each of us deals with banks, which are the arteries of the financial system, and the central bank is the most important part of it.

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People deposit their money in commercial banks like ICBC, ABC, CCB, and BOCOM, but above them, there is an institution with higher financial power, the central bank, commonly referred to as "Yama Mama."

Why do we need a central bank?

Because banks can also go bankrupt.

Once a bank fails, it can trigger a run effect, bringing huge risks to the entire country's financial system.

To avoid such an outcome, commercial banks must hand over a portion of their funds to Yama Mama for safekeeping.

In case of risk, Yama Mama will extract this emergency fund for urgent needs.

This life-saving money is what we often hear about in the news as "required reserve ratio."

In addition to managing the life-saving money for commercial banks, Yama Mama can also issue currency, adjust interest rates, and credit.

When the economy is overheating, interest rates are raised slightly.

As a result, people are more willing to deposit their money in banks, and with less money circulating in the market, the economy can cool down.

When the economy is sluggish, Yama Mama prints money, which is what we often refer to as "flooding the market with money."

The importance of the central bank is self-evident, and the Federal Reserve plays the same role in the United States' financial system.

Since every country has a central bank, why is the United States' so powerful?

This has to start with the hegemony of the US dollar.

Have you ever thought about what the essence of money is?

A 100 RMB note can buy a delicious meal, but if you try to spend it at a restaurant in the United States, the waiter might refuse to accept it.

Why does this happen?

Because the essence of money is credit.

Why does a Chinese restaurant accept RMB?

Because the owner knows that after taking the money, he can continue to use it to buy rice, fish, and meat.

If the vegetable market vendors refuse to accept it, the market supervision department will punish them.

It is precisely because of this reason that RMB is loved by everyone domestically, but once it arrives in the United States, problems arise.

The United States does not recognize it; no matter what it is or how valuable it is, they only recognize the US dollar.

It's not just the United States; even in Europe or Australia, the same problem occurs.

These countries, apart from recognizing their own currencies, basically only recognize the US dollar.

The foundation of the so-called US dollar hegemony is here.

The US dollar is universally accepted worldwide.

Some very small countries, such as Panama and East Timor, do not even issue their own currencies and directly use the US dollar.

In this way, the Federal Reserve is endowed with an unparalleled power.

Japan has experienced decades of economic stagnation.

Why doesn't the Bank of Japan keep printing money and flooding the market with liquidity?

Because the yen is not a world currency.

If too much money is printed and flows into the market, it will lead to severe inflation.

Originally, I could buy a hamburger for 500 yen, but now it has risen to 1000, which is extremely harmful to the economy.

However, it's different with the US dollar.

When the US economy is not doing well, the Federal Reserve can flood the market with liquidity because no matter how many US dollars are printed, the world recognizes them.

The inflationary burden is shared by the whole world with the Americans.

Just think about how unfair this is.

The Federal Reserve prints money crazily, and Americans can spend these printed papers all over the world, while other countries suffer from resource loss and soaring prices, with wealth being easily plundered.

The whole world is working for Americans.

Can we resist?

Behind the US dollar hegemony lies the United States' military, financial, and technological hegemony, so the problem is not so easy to solve.

Now you know why every move of the Federal Reserve affects our wallets, right?

The Federal Reserve is not only the central bank of the United States, but also the central bank of the world.

In my previous video, I explained that the Federal Reserve's interest rate cut will lead to capital outflow from the US market, which is beneficial for the assets of other countries.

So, the question arises, will the United States just sit back and watch the capital outflow?

Is there a backup plan ready?

At present, the United States seems to be running out of financial options, as the 35 trillion US debt is like a sword hanging overhead, immobilizing the US Treasury.

Otherwise, the Federal Reserve would not have taken the step of lowering interest rates.

Under such circumstances, the United States is very likely to create further wars and panic worldwide through proxy wars to prevent capital from fleeing the United States.

Just recently, Lebanon experienced multiple pager explosions that caused a large number of casualties.

The United States immediately stepped forward to guide public opinion, claiming that this was due to the Israeli intelligence agency's tampering, planting explosives in the pagers purchased overseas by Hezbollah in Lebanon.

Such attacks set a terrible precedent.

In the past, it was open warfare, but now it has turned to covert attacks, targeting ordinary civilians.

How can we defend against this?

The Middle East is in a state of panic, but the more chaotic the world is, the happier the United States is, as this kind of turmoil often creates opportunities for the United States to seek benefits.

It's not just the Middle East; in the South China Sea region, the Philippines is also eyeing with covetousness.

The United States tries every means to make the Philippines take the lead in stirring up trouble, even willing to make it the second Ukraine, with the purpose of disturbing peace in East Asia and further disrupting our layout in Southeast Asia and even the Belt and Road Initiative.

The global economic market and international situation are closely connected, tightly tied to the United States' big ship.

Behind the major phenomena occurring worldwide, there is a complex transmission process.