Economics-A Brief Analysis of USD Liquidity

Previous article: " Economy - QT Interpretation of U.S. Interest Rate Raise (Notes) ", the reverse operation when shrinking the balance sheet and QE

• U.S. dollar index: an indicator of the strength of the U.S. dollar, an index of global capital trends, the stronger the demand for U.S. dollars, the higher the U.S. dollar index will be.
• The US dollar index is composed of a basket of currencies (57% euro, 13% yen, 12% sterling, 9% Canada, 4% Swedish franc, 3.6% Swiss franc), the weaker euro last year drove the dollar up
• Dollar Index Smile Curve: When the U.S. economy is extremely weak or strong, the U.S. dollar index rises; when the U.S. economy is not particularly strong relative to other economies, the U.S. dollar index falls.

The U.S. dollar enters the interest rate hike cycle, and the interest rate is high, and the U.S. dollar index will rise, and funds will run back to the United States to earn interest. On the contrary, if the interest rate is cut, the dollar will flow out of the United States and run back to other countries. The epidemic has caused a lack of dollar liquidity supply (epidemic, cash is king) , became a hot commodity, the dollar index strengthened), interest rates fell to 0, reserves fell to 0, and money was thrown.

Long-term: Changing the structure of income distribution, supplementing the purchasing power of the bottom, and changing the way of debt-driven growth are the fundamental solutions to the problem.

• Cryptocurrency beneficiaries:

Speculators, institutional investors-company (risk-spreading), traffic-hungry (elon), industry chain players (exchange ETFs), black market traders.

Gold is 1.1 billion US dollars, compared with BTC, it will take a long time, and it will not be solved in a few years.

refer to

[Bitcoin Capital War] 10,000 times in ten years, 200,000 people lost 40 billion in blood overnight, who is benefiting?

What is "dollar return"? The Fed is raising interest rates and shrinking its balance sheet to "harvest" the world? How does international capital flow?