Recently, the news that the United States' national debt exceeded 35 trillion dollars spread across the internet.

The recent news of the Federal Reserve lowering interest rates by 50 basis points has also flooded in.

Within 24 hours of the Fed's rate cut announcement, news came that China had reduced its holdings of U.S. debt by 26 billion yuan and that a high-ranking official from the U.S. Treasury Department had visited China.

What secrets are hidden behind these events?

As we all know, the United States claims to be the world's number one superpower, but maintaining this status is not easy.

The United States' massive military spending is like a bottomless pit, swallowing trillions of dollars.

When it comes to borrowing money, the U.S. government's favorite trick is to issue national bonds.

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They spend lavishly while constantly reaching out to the world for money.

For many years, U.S. national bonds have been like a panacea, attracting investors.

After all, the U.S. economy has always been seen as the safest haven in the world.

However, even the sweetest sugar coating can become cloying if consumed in excess.

As the U.S. debt grows larger and larger, investors' appetites are shrinking.

China, as the largest foreign holder of U.S. debt, has been making frequent moves in recent years, and the scale of its reduction is increasing, which is not a good sign for the United States.

It is important to remember that China used to be the United States' top creditor.

If they no longer buy into it, the United States will have a hard time.

With fiscal deficits, current account deficits, and high debt, the risks to the U.S. economy may far exceed our imagination.

What is even more worrying for the United States is that their old friends seem to have seen the situation clearly.

Countries like the United Kingdom and Japan have also been significantly reducing their holdings of U.S. debt recently.

The problems with the U.S. economy are, after all, self-inflicted.

Large military expenditures, significant tax cuts, coupled with infrastructure construction and social welfare spending, the U.S. fiscal situation is like a bottomless pit.

To fill this hole, the U.S. government can only continue to issue national bonds and borrow money to get by.

Over time, the scale of U.S. debt has grown like a rolling snowball, even to an unsustainable point.

According to statistics, the current scale of U.S. national debt has exceeded 35 trillion dollars.

But the problem is that the U.S. government seems to have not realized the seriousness of the problem.

They are still immersed in the glory of the past, thinking that as long as they issue national bonds, they can solve the problem.

However, they have overlooked one point, that is, the confidence of global investors is gradually being lost.

When the credibility of the U.S. dollar is questioned, when U.S. bonds are no longer seen as risk-free assets, when more and more countries start to sell their U.S. bonds, the U.S. economy may find it difficult to continue.

And it is at this time that the United States has chosen to lower interest rates.

So what impact will the U.S. rate cut have?

Can it help the United States through the difficulties?

On September 18, the United States announced its first rate cut in four years, and it was 50 basis points.

It is important to know that in the context of an unclear economic situation, the Fed's reckless rate cut is no different from drinking poison to quench thirst, which will only make the U.S. economy worse.

The Fed's rate cut decision, on the surface, is to stimulate the economy and boost market confidence, but in fact, it is more like a temporary measure, covering up the deep-seated contradictions of the U.S. economy.

As we all know, one of the big problems with the U.S. economy is its excessive dependence on debt.

From the government to enterprises, from real estate to the stock market, every corner of the U.S. economy is filled with the shadow of debt, and behind the debt is a fragile bubble.

Lowering interest rates is nothing more than allowing these bubbles to continue to expand, allowing the debt problem to be temporarily covered up.

But the problem is that bubbles cannot continue to expand forever.

When the day of the bubble burst comes, the U.S. economy may collapse.

Moreover, in the context of global economic turmoil, blind rate cuts may also trigger new risks.

On the one hand, excess liquidity may flow into speculative areas, promoting asset bubbles.

On the other hand, the depreciation of the U.S. dollar may intensify, triggering a new round of currency depreciation competition.

At that time, the U.S. economy will not only find it difficult to extricate itself from the quagmire, but it may also drag the global economy into a recession.

And even more snow is added to the injury.

Within 24 hours of the United States just announcing the rate cut, the U.S. Treasury also released the capital flow report for July 2024.

In this report, it includes the scale of U.S. debt holdings of many countries.

However, we can find that China's holdings of U.S. debt in July decreased by 3.7 billion dollars compared to June.

That is to say, during this period, China sold 3.7 billion dollars of U.S. debt, equivalent to more than 26 billion yuan in RMB, which is not a small number.

However, what the United States did not expect was that not only did China reduce its holdings of U.S. debt, but even its largest creditor, Japan, also reduced its holdings of U.S. debt.

Even countries like the United Kingdom and France have followed suit and reduced their holdings of U.S. debt.

China's reduction of U.S. debt is also sending a signal to the United States that China will not be slaughtered, and will not pay for the United States' wrong policies.

Over the years, the United States has often taken China as a "scapegoat" and even provoked a trade war to suppress China.

But in fact, the root of the problem with the U.S. economy lies in itself, not in China.

It is the United States that has chosen the path of military expansion, it is the United States that has indulged the growth of financial bubbles, and it is the United States that has let the debt accumulate.

Of course, as the world's top two economies, the economic destinies of China and the United States are closely linked.

Cooperation is beneficial to both, and fighting is detrimental to both.

The economic game between China and the United States should not be a zero-sum game where you die and I live, but a positive-sum game where cooperation leads to mutual benefits.

This requires China and the United States to abandon prejudices, strengthen communication, and strengthen cooperation on the basis of equality and mutual benefit.

Only in this way can contradictions be resolved and common development be achieved, which is also the expectation of the whole world.

And just one day after the United States just announced the rate cut, the Deputy Secretary of the U.S. Treasury arrived in China for a visit.

At this critical juncture, what is the purpose of the Deputy Secretary of the U.S. Treasury coming to China?

On September 19, Deputy Secretary of the Treasury of the United States, Shang Bo, led a group of high-ranking officials from the Treasury Department to visit China.

Many people believe that Shang Bo's visit to China this time must be related to the Fed's rate cut or China's reduction of U.S. debt.

In fact, it is not the case.

China and the United States have established an economic working group last year, and this meeting in China is also the fifth meeting between the two countries.

That is to say, such meetings have been held many times before.

As the world's first and second largest economies, communication is an essential step.

However, the United States cannot ignore some of the problems it faces, and these problems cannot be solved by pressuring other countries.

What the United States needs is to face the problem bravely, carry out structural reforms, control military expenditures, reduce unnecessary overseas military actions, strengthen financial supervision, and curb asset bubbles.

Only in this way can the U.S. economy truly embark on a healthy development track, which is also what China and other countries are willing to see.

After all, as the world's top two economies, the economic destinies of China and the United States are closely linked.

A healthy and stable U.S. economy is beneficial to China and the whole world.

Of course, this does not mean that China will let the United States' wrong policies go unchecked.

As a responsible major country, China will continue to promote the internationalization of the renminbi, reduce dependence on the U.S. dollar, continue to deepen reform and opening up, and enhance the internal momentum of economic development.

The future world economy should not be dominated by the United States alone, but should be a win-win situation where all countries prosper together.

This requires all countries, including China and the United States, to abandon prejudices, strengthen communication, and strengthen cooperation on the basis of equality and mutual benefit.

Only in this way can contradictions be resolved and common development be achieved.

This is also the direction of human society's progress.

Let us work together to create a better tomorrow!