Three years have passed, has the world become a better place? Judging from the past, it seems not. In this century of great changes, the world appears to be advancing towards increasingly perilous territory. If there is a source to this, it might stem from the United States' panic over the collapse of its hegemony.

It is challenging to discern signs of improvement in this situation. Fundamentally, the world is aware that the root of these contradictions lies in an unjust international order. It has not been completely altered; it has neither been thoroughly overturned nor can it continue to firmly control the world.

Precisely because the old system has not yet been shattered and a new one has not yet been established, during this century of great changes, the world faces numerous uncertainties. Amidst these uncertainties, the one thing we can be certain of is that this will be an era filled with rapid changes.

In just the recent period, new changes have emerged, and these latest developments will determine what kind of 2023 we will face.

The Federal Reserve's Pause, and the Appreciation of the Renminbi

In a sense, the interconnectedness of today's world has surpassed any period in human history. This interconnectedness is reflected in the fact that significant policy changes in global powers will influence each other and inject new variables into the world. Only when a new system gradually emerges in new games will people who are slow to realize notice that the world has truly changed.

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Three major changes have occurred in the world recently, and I believe everyone may have felt, to varying degrees, the impact of these changes, or will soon feel it.

The first change is the Federal Reserve's pause.

Of course, the Federal Reserve's pause is temporary. The current U.S. benchmark interest rate has now reached 4%. According to the market's general expectations, next month, the Federal Reserve will raise interest rates again, bringing the benchmark rate to 4.5%. However, whether there will be further rate hikes or a temporary maintenance of a high-interest rate state around 5% after 2023 is not yet clear.

Nevertheless, the Federal Reserve has been continuously releasing a new expectation to the outside world, which is the Federal Reserve's high-interest rate plan. What does this mean? It means that the U.S. dollar's benchmark interest rate may be maintained at a relatively high level next year, such as around 5%, without further rate hikes or cuts.I have analyzed this before. Currently, the total debt of the 31 emerging economies worldwide has reached a staggering $98 trillion. How many countries will have a large amount of short-term foreign debt maturing in 2023, and how many countries will face a debt crisis? This data might be best known only to the United States and those fragile emerging economies.

I believe that the United States maintaining a high level of benchmark interest rates, neither lowering nor raising them, is akin to a strategy of boiling a frog in lukewarm water. Many countries, under the pressure of these high interest rates, may face ongoing threats of economic contraction. If ease brings prosperity and contraction brings depression, then this persistent, neither tight nor loose state, might lead to a period of torment.

If the United States wants to wage a protracted war, it inevitably means that whoever can't endure will fall first, and whoever lasts until the end will win it all. This is an unprecedented pattern in American history and a challenge the world has never experienced. Therefore, today's global financial markets, upon learning that the United States will not continue to raise interest rates significantly, have kicked off a round of significant rebound celebrations. However, the market changes that follow may not be as rosy as everyone imagines. Their end may not be recovery and prosperity but a prolonged period of torment.

But regardless, when the Federal Reserve releases such expectations, globally it's as if a gentle breeze has suddenly passed over a turbulent sea, and the entire world becomes a bit quieter, with some significant turning points emerging.

The second change is the appreciation of the Chinese yuan. We all know that, especially in the second half of the year, the yuan has faced significant depreciation pressure, with the exchange rate once exceeding 7.3. To be honest, the pressure at this level is quite substantial. Because behind it is not just a contest between two currencies but also a reflection of capital's confidence and choice for the future global economy.

With the adjustment of the Federal Reserve's policy, we have also made some corresponding policy relaxations. I understand the logic on the financial level because since the United States has chosen to engage in a protracted war financially, the period when the Federal Reserve slows down the pace of interest rate hikes is a window of opportunity for the domestic economy to recover and catch its breath.

How long will this period last? I have conducted a specific analysis in my previous article. This window period could be as short as half a year and at most not exceed one and a half years. That is to say, within this recovery window, we need to give all industries and sectors an opportunity to quickly regenerate and accumulate strength.

There is, however, a certain helplessness in that inevitably, some other people will face difficulties in this process. I hope everyone takes good care of their health, does a good job of protection, and makes full use of such a window period to accompany their families and do what they want to do.

Has the global turning point arrived?Besides the downward revision of the Federal Reserve's interest rate hike expectations, there have been some changes in the United States midterm elections. The Republicans have taken control of the House of Representatives, while the Democrats have retained the Senate. Although the Republican victory was not as dazzling as anticipated, it is inevitable that after capturing the House, some of Biden's policies may be constrained.

However, to say that there will be a comprehensive turning point in U.S. policy is almost impossible. Looking at the policy choices of the two administrations from Trump to Biden, the United States' foreign policy has essentially maintained relative stability and continuity, especially in dealing with us. The only change in the United States is that it has intensified.

As for relaxing sanctions and easing the situation, it may never be a priority for the U.S. government. The new Cold War specter hovering over humanity, like an indelible threat, can descend at any time. The only change may be that when one path is not viable, the United States will try to take a second path, and when all paths are not viable, it may resort to inhuman means to take a desperate gamble.

So, in summary, do not harbor any fluke mentality towards any changes in the United States. The United States' determination to maintain its hegemony and its unwavering will are beyond the understanding of us as latecomers. Because everything the United States has today is based on the continuation of hegemony. Without hegemony, there is nothing. Who would be willing to lose all this?

So when we look at the Federal Reserve's stance, its financial policy has not taken a turn, nor has it reversed, but rather aims to maintain financial policy at a high interest rate level of around 5%, allowing global asset prices to continue to endure suffering. As for the magnitude of this test, it may mainly depend on how long the United States can persist.

In such a period, what the world is about to face next may not be a turning point, but may enter a plateau period. In such a plateau period, we cannot expect the United States to change its mind, nor can we hope that the United States will calmly accept the world order and the transformation of the international financial monetary system.

Instead, in such a state, the world may need a breather. It is both a need for internal adjustment and the pressure of external competition. Because under the current extreme conditions, if the United States further raises interest rates significantly and rapidly, it may not lead to the collapse of asset bubbles in countries around the world as expected by the United States, allowing the United States to smoothly harvest the core assets of other countries. Instead, the United States may first enter a great depression and bring the world into recession.

So as a kind of tacit understanding, everyone temporarily eases up. And the United States takes the initiative to adjust and change its strategy, which is only a change in strategy, not a change in the entire strategy, goals, and plans.

What's next for the United States?

From the current situation, everyone needs a plateau period, and of course, the United States needs such a plateau period even more. The U.S. dollars that are currently flowing back globally continue to stay in the Federal Reserve's overnight reverse repurchase agreement accounts, that is, in the form of cash, continuing to wait and see. They have not entered the U.S. stock market, nor have they entered the U.S. bond market.Next, due to the slowdown in the Federal Reserve's interest rate policy, the U.S. financial market may experience a rebound. In the expectation of such a rebound, it remains to be seen whether these funds will be tempted by the bullish lure and enter the U.S. financial market on a large scale to bottom-fish. The scale of these funds, as shown in the latest data, is still as high as 2.2 trillion U.S. dollars. If they continue to wait and stay in the Federal Reserve's overnight reverse repurchase agreement accounts, then the Federal Reserve may have no other choice but to continue to maintain the benchmark interest rate of around 5%, at least until the middle of next year.

Under this expectation, whether the inflation in the United States can really ease is still difficult to judge at present. Whether the U.S. interest rate hike plan will be completely reversed and even changed to a rate cut is also uncertain. From the current situation, it is difficult to make such a judgment. In fact, the strategic goals of the United States have not been achieved. If the United States really adjusts its financial policy and even turns around to cut interest rates, it means admitting that the entire financial contraction strategy has completely failed. This is unacceptable to the United States in any case.

Based on this greatest impossibility, we can infer that the prices of major commodities in the future may continue to maintain high volatility, and the inflation expectations in the United States will also maintain high volatility. Correspondingly, the Federal Reserve's policy will maintain a position that can advance or retreat according to this situation.