[转]Global Economic Research Update: U.S. Fiscal Crisis and Strategic Tariff Moves

Greetings, Members this is a part of the Research I was Doing.

The current U.S. fiscal situation is far more complex than what’s portrayed in the mainstream headlines. While discussions often center around the spending bill deadlock, the core issue lies in the Treasury’s liquidity crisis — simply put, there isn’t enough cash available to sustain both debt servicing and government spending.

1. Cash Flow Breakdown:

The Treasury’s available reserves mainly in the ( Treasury General Account ) and ( Reverse Repo Facility ) are rapidly depleting. This creates a scenario where the U.S. government must choose between paying ( interest on treasuries ) to avoid default, or funding ( essential public spending ) — salaries, social security, and contractor payments.

2. The Legal Constraint:
Under the (Federal Reserve Act), the Fed can’t directly fund the government. It can only perform (Quantitative Easing (QE) — buying treasuries from the market to maintain liquidity. However, this only shifts ownership of debt; the Treasury must still pay interest, whether to investors or the Fed itself.

3. Borrowing Limit & Fiscal Trap:

The debt ceiling has already been reached early in the fiscal year. Without new borrowing authorization, the Treasury relies entirely on tax inflows — insufficient for sustaining both debt obligations and spending. Raising the ceiling might offer temporary relief, but it doesn’t solve the underlying insolvency risk.

4. QE vs. Hyperinflation Risk:

While QE may provide short-term liquidity, printing money directly for government use would be illegal and catastrophic — potentially leading to (hyperinflation) similar to Zimbabwe’s experience.

5. China Factor & Trade Tactics:

Currently China fully understands the fragility of the U.S. fiscal position — and so does the (Trump administration), which is why it’s strategically leveraging the (tariff war).

Translation content:
Global Economic Research Update: The U.S. Fiscal Crisis and Strategic Tariff Trends

Dear members, below is part of the research report I am currently working on.

The current fiscal situation in the United States is far more complex than what mainstream media reports. While discussions often focus on the stalemate over spending bills, the core issue lies in the liquidity crisis at the Treasury Department - in simple terms, current funds are insufficient to simultaneously sustain debt payments and government spending.

Key Points:

1. Capital Flow Analysis:
The funds available for reserves at the Ministry of Finance (mainly kept in the general account of the treasury and reverse repurchase agreements) are being rapidly depleted. This creates a dilemma for the U.S. government: whether to pay interest on national debt to avoid default or to maintain essential public spending—including salaries, social security, and contractor payments.

2. Legal Restrictions:
According to the Federal Reserve Act, the Federal Reserve cannot provide funds directly to the government, but can only maintain liquidity through quantitative easing policies—by purchasing government bonds from the market. However, this only shifts the ownership of the debt, and the Treasury must still pay interest, regardless of whether the recipient is an investor or the Federal Reserve itself.

3. Loan Limits and Financial Traps:
The debt ceiling was reached early in the current fiscal year. Without new borrowing authority, the Treasury is completely reliant on tax revenues — which are far from sufficient to support both debt repayments and fiscal expenditures at the same time. Raising the ceiling may temporarily defer the crisis, but it does not fundamentally resolve the solvency risk.

4. QE and the Risk of Hyperinflation:
Quantitative easing can provide short-term liquidity, but directly printing money for government use is illegal and may lead to catastrophic consequences—such as hyperinflation similar to that of Zimbabwe.

5. Chinese Factors and Trade Strategies:
Currently, China fully recognizes the fragility of the U.S. fiscal situation—this is something the Trump administration is equally aware of, which is precisely the reason for its strategic use of the tariff war.
#TRUMP #美国实施新一轮关税措施
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