For those who have been closely following international news, it is well known that although the United States is ostensibly an economic superpower, it is currently burdened with a massive amount of debt. Just a few days ago, the Federal Reserve reported that its losses have surpassed the $200 billion mark.

In fact, as early as March of this year, the Federal Reserve disclosed that its paper losses for the previous year exceeded $100 billion. Although the recent interest rate cuts can alleviate some of the paper losses, the substantial losses still cannot be completely eliminated.

If the United States continues to experience inflation, the long-standing American hegemony will enter a countdown, and at that time, black swan events will envelop the entire United States.

Historical Black Swan Events

A black swan event, as an economic term, refers to an occurrence that, once it happens, will have a profound impact on the world. These events are usually reviewed and attempted to be explained after they occur, but few people can foresee their possibility before they happen.

In recent years, the global economy has encountered several significant black swan events, the most representative of which is the COVID-19 pandemic. The outbreak of the virus quickly triggered lockdowns and restrictive measures worldwide, directly leading to the stagnation of economic activities.

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The U.S. supply chain was severely disrupted, with many businesses facing production halts and reduced orders. In this situation, although demand was suppressed, the demand for certain goods (such as medical supplies and electronic products) surged, creating a supply-demand imbalance and further driving up inflation.

At the same time, the 2008 financial crisis is another famous black swan event. The root of this crisis lay in the housing market bubble and the widespread underestimation of the risks associated with financial derivatives.

As the subprime mortgage crisis erupted, many financial institutions fell into a severe liquidity crisis, leading to a global economic downturn.

This crisis not only severely damaged the U.S. economy, but also, during the post-crisis economic recovery, the U.S. government and central bank adopted large-scale stimulus policies. Although these policies promoted economic growth in the short term, they were followed by an exacerbation of inflationary pressures.How Did a $200 Billion Loss Occur?

Although the occurrence of black swan events is unpredictable, their subsequent impacts have some correlation. For instance, the recent financial report released by the Federal Reserve indicates that its losses have exceeded $200 billion, which is intricately linked to previous actions taken by the United States.

In an effort to rescue the U.S. economy, the Federal Reserve purchased a substantial amount of Treasury bonds and other financial assets. However, as the economy gradually recovers and inflationary pressures rise following interest rate hikes, interest rates also climb. This shift has caused the low-interest assets previously purchased by the Federal Reserve to depreciate, leading to a financial loss of up to $114.3 billion.

Another significant factor in the losses is the relationship between the Federal Reserve and the U.S. Treasury. During the period of economic stimulus, the Federal Reserve supported fiscal spending by purchasing Treasury bonds. However, as fiscal deficits expand and debt levels rise, future debt repayments and interest expenditures will exert more pressure on the financial health of the Federal Reserve.

The Only Way Out for the United States

Although this $200 billion loss is enough to put the dollar hegemony on a countdown, the Federal Reserve, as the central bank, still has the ability to address these issues through adjustments in monetary policy. A 50 basis point rate cut may seem reckless, but those in the know understand that the Federal Reserve's decision to cut rates is not a hasty one but the result of careful consideration. Therefore, at least at the level of non-farm employment and unemployment rate data, the rate cut has played a significant role.

The U.S. government, in an effort to stimulate economic vitality, has purchased a large amount of Treasury bonds and other assets, leading to an unlimited expansion of its balance sheet. The rate cut has also become a powerful tool to reduce financial pressure.By lowering interest rates, the Federal Reserve can alleviate the burden of interest payments, reduce the extent of losses, and thereby improve financial conditions. This policy adjustment can provide short-term "relief" for the Federal Reserve, thereby offering greater flexibility for its future operations.

However, what troubles the Federal Reserve immensely is that interest rate cuts are not a panacea. Currently, the U.S. economy still faces severe inflationary pressures, and too rapid interest rate cuts could further exacerbate inflation, which runs counter to the Federal Reserve's goals.

In a high inflation environment, interest rate cuts may lead to further price increases, thereby affecting consumers' purchasing power and the overall stability of the economy.

Therefore, relying solely on this round of interest rate cuts will not be able to eliminate the massive debt in the United States. According to the predictions of the "FedWatch" by the Chicago Mercantile Exchange (CME), interest rate cuts in the United States are expected to continue to increase in the coming months, even exceeding 50 basis points.

Ultimately, the current situation of the United States cannot be resolved by its own strength alone. If it does not seek help from other countries, the economic crisis will become even more severe after it occurs.

Perhaps, only by starting good cooperation with our country and sincere communication can we get through this black swan crisis. After all, there are very few countries in the world that can help a country of the size of the United States.