Immediate impact of dollar appreciation
The appreciation of the dollar has solved a series of economic difficulties in non-US countries. Through the appreciation, the pressure on the United States to repay its debts has increased, and all creditor countries in the world have benefited.
First, mitigate attacks on the euro area and other non-US countries. The United States has always maintained itself at the center of “one super-multi-level”, that is, “one super.” Therefore, for countries or economies that have the ability to compete with him, there will be necessary attacks. In recent years, because of the rapid rise of the euro, the US government and investment banks have staged political dramas, the ultimate goal of which is to squeeze the euro and reduce the economies that compete with it. If the dollar goes up the road of appreciation, the pressure on the appreciation of the euro will be relieved from the outside world, and it will also increase the exports of the euro area countries, thereby stimulating the economic growth of the euro area countries and promoting the development of production and processing enterprises.
Second, to reduce the pressure on the appreciation of commodity currencies led by the Australian dollar. As the dollar depreciated, all dollar-denominated commodities rose sharply, affecting all commodities. Inflationary pressures have risen sharply. The currencies of countries such as Australia and Canada also accelerated their gains, ultimately causing a severe blow and shock to the economies of these countries. Correspondingly, it will also increase the export cost of resource countries, and continue to promote the price increase of commodity raw materials. This vicious cycle will continue until the economy collapses, and only a reshuffle can end the chain of negative effects.
Third, bring hope to emerging market countries. Emerging market countries mainly refer to the “BRIC countries” led by Brazil, Russia, China, and India, as well as most developing countries such as Africa and Latin America. The financial crisis started in the United States, and was aggravated by the United Kingdom, which caused an economic crisis from developed countries in Europe and the United States. In the past, these developed countries exploited and suppressed the economic growth of developing countries. However, major institutions in the world generally believe that it is precisely the emerging market countries such as the “BRICs” that can save Western developed countries this time.
The main reason is that these countries have a large amount of foreign exchange reserves , which can ease the financial pressure. This is reflected in the fact that the imf has reduced the seats of countries such as Europe and the United States, and turned to emerging market countries.
Secondly, the “BRIC countries” and other countries have a lot of human resources and mineral resources. In order to restore the economy in the next step, these material and human resources are very valuable assets.
Third, emerging market countries have a large consumer market, which is an important factor in economic recovery. The vast market can solve the problem of consumption of commodities, and the links of production, distribution and reinvestment can be smoothly circulated.
Therefore, emerging market countries are the hope of this crisis.
However, due to the wild devaluation of the dollar, the exports of these countries were severely damaged. The export industry has been hit hard. At the same time, the currencies of these countries have appreciated one after another, resulting in a large inflow of funds, intensifying inflation, and severely impacting the living standards of the people.
Coinciding with the appreciation of the dollar, it just gave developing countries an opportunity. The country’s currency can be appropriately depreciated and exports will increase, driving the development of the country’s export industry, increasing employment, and expanding foreign exchange reserves, thereby increasing residents’ income and improving consumption levels. It can also put “hot money” under pressure and withdraw from developing countries without affecting the stock market and economic development of such countries.