Chapter 2781 A brilliant idea
First of all, what is U.S. debt?
To put it simply, the hegemonic country does not have enough money to spend, so it borrows money from the whole world and obtains a loan certificate in the process.
It is equivalent to the official of the hegemonic country writing an IOU to the creditor, which states when it is due, how much interest will be paid, and other information.
Suppose there is an investor named Chen Mo. He thinks the yield on U.S. Treasury bonds is good, so he buys U.S. Treasury bonds with a face value of 100 million. The official yield marked by the hegemonic country is 4%, and the redemption period is 1 year.
This means that after maturity, Chen Mo can receive a total of 104 million in principal and interest.
But before the one-year term was up, something suddenly happened at Chen Mo's family and he needed cash to deal with it. He no longer wanted this pile of US bonds. What should he do now?
Then we can only resell it.
If only Chen Mo was reselling U.S. bonds, there would be no problem. But if more people were reselling and a large number of U.S. bonds appeared on the market, then the problem would explode.
As the saying goes, scarcity makes things valuable. If there are too many US bonds on the market, they will definitely not be able to be sold at a high price.
In order to make a move, Chen Mo will definitely do one thing - sell at a lower price!
At this time, a bond worth 100 million may be discounted by 9%, 8%, or even as low as 6%!
This is the so-called "U.S. debt crash."
Suppose at this time, there was a buyer named Shang Li who purchased 60 million US Treasury bonds from Chen Mo at a price of 100.
He can cash out 104 million after holding it to maturity.
At this time, the cost of buying bonds was only 60, while his U.S. Treasury bond yield was 73.3%!
As a result, the U.S. Treasury bond yield soared from 4% to 73.3%!
This is equivalent to a surge in US Treasury yields!
This matter is extremely scary and serious.
Because if they can buy U.S. bonds with a yield of 60% for $73.3 in the market, why should they spend money to buy bonds with a yield of only 4% from the official side of the hegemonic country?
As a result, no one went to buy from the official website of Baguo.
To whom will the new official bonds of Naha State be sold?
There is no other way. The hegemonic country's officials can only increase the yield to attract new buyers, but doing so will cause the U.S. debt to grow bigger and bigger, and the debt problem will become more and more serious.
Borrowing money feels good for a while, but paying it back is a nightmare.
In recent days, U.S. Treasury yields have skyrocketed!
The whole world is selling off unexpired U.S. Treasuries, resulting in an overabundance of U.S. Treasuries on the market.
In addition, this month, nearly 3 trillion U.S. dollars worth of U.S. debt will mature and be redeemed.
Solomon had no idea how to solve the problem.
It's impossible to let him solve the problem with his own money, right?
However, if this batch of U.S. debt cannot be redeemed, then no one will buy the newly issued bonds, and the strategy of robbing Peter to pay Paul will not work.
Therefore, Solomon couldn't think of a solution no matter how hard he tried, so he had to try his best and ask Chen Mo to see if he could help him.
If he can't help, Solomon can just say a few words to Chen Mo. If he can help, that would be even better. In short, he won't lose anything.
Chen Mo sat on the throne, pondered for a moment and said, "I have a very good idea. It can be said that it is a great idea to pay off the debt!"
"The first step is to get the hegemonic ruler to stand up and say, I'm going to impose taxes on all countries in the world, including the North and South Poles. No matter if there are people there, just impose taxes on them. At this time, the U.S. stock market will go down, and we'll reap the first wave."
"The second step is to spread the word that the tax increase will be postponed for 90 days. At this time, the stock market will turn upward and we can make another profit."
"The third step is to spread the word that who the hell said it would be delayed. I never said that. At this time, the stock market has to go down again. Do you think there will be another wave of harvest?"
"Step 90. Another message came through, saying that there will indeed be a delay, but not for 100 days but days. Everyone misunderstood the previous statement. Let me explain it here. Then the stock market will go up again, and I will make another fortune!"
"With just these four steps, repeating over and over again, you can not only reap the money of retail investors to pay off their debts, but you can also make a lot of money from the world's largest stock market. Let me ask you, am I a genius? Huh? Answer me!
look-in-my-eyes!!!"
Solomon opened his eyes wide and didn't say a word for a long time.
After a long time, Solomon could no longer bear it, veins popped out on his forehead, and he cursed: "Do you think people are fools if they don't get angry?"
"Is this something a human brain can come up with?!"
"Tell me, which Alzheimer's patient would use such a crappy idea?"
Chen Mo shrugged and said helplessly: "Believe it or not, real gold is not afraid of fire.
I believe that in a dozen years or so, someone in the hegemonic country will definitely recognize the value of this idea and put it to use.
If you don’t believe me, just wait and see! "
"It's fucking useless for me to ask you!"
Solomon cursed and turned off the camera.
Chen Mo shook his head and sighed, "Why don't you believe me?
My idea is amazing.”
