The US faces two existential problems:
1️⃣ A massive debt
2️⃣ China's rise to global leadership
If Washington doesn't act, China could indeed become the world's leading economic power.
The numbers speak for themselves.
📊 Where does China excel?
Energy: ~9,000 terawatt-hours versus ~3,000 for the US
Manufacturing: China accounts for 28% of global production versus 16% for the US
Technology: Leading in 5G and demonstrably accelerating in artificial intelligence
Electric vehicles: BYD outperforms Tesla
Robotics: China is in the lead
Anyone who doesn't see the danger of this… doesn't understand the meaning of global dominance.
China has become the world's factory.
The US has only one option to defend itself: devalue the dollar.
🔙 Back to 1985 – The Plaza Accord (Japan)
The United States met with Japan, Germany, France, and Britain, and coordinated a sell-off of the dollar to weaken it.
The reason? Japanese exports were crushing American industry.
📉 Results over 3 years:
Yen: From 260 → 120 (+116%)
Japanese exports became expensive globally
Japan went into panic.
🏦 Bank of Japan's response (a familiar scenario):
1990: Interest rate 6%
1995: 0.5%
2000: 0.1%
2016: -0.1%
➡️ Decades of near-zero interest rates… and that's how losing contracts are made.
📉 Bubble then Crash:
Nikkei Index: From 10,000 → 38,900
Then a crash to ~7,000 (-82%)
Then the real monster emerged… Carry Trade
Borrowing in a low-interest currency (yen) → Buying US assets with a higher return.
Trillions of dollars flowed in.
🔁 Possible “Plaza Accord 2.0” Scenario:
1️⃣ The dollar weakens
2️⃣ The yuan strengthens
3️⃣ Chinese exports suffer
4️⃣ The People’s Bank of China cuts interest rates
5️⃣ Carry trade shifts to the yuan
6️⃣ Long-term economic drain
🧮 Simple Math:
Today: $1 ≈ 7 yuan
If the dollar weakens by 50%: $1 ≈ 3.5 yuan
➡️ The yuan effectively doubles…
And export models don’t survive in this scenario.
🚨 Export Shock:
China's exports: ~$3.5 trillion (20% of GDP)
50% hit = -$1.75 trillion annually
Export-related jobs: ~220 million
Potential risks: ~110 million jobs
This is immense social pressure.
Yes, China's moves in gold and silver and the reduction of US bond holdings are significant… but the real battleground is currencies.
📌 1985: Japan
📌 2026: se are currencies on a strong rise: 👇
