Recently, China's central bank announced the total monetary information as of the end of November 2023, and the value of our broad currency (m2) has soared to a local frightening 291As much as 2 trillion yuan, an increase of 10% compared with the same period last year!
According to our estimates, maybe by that time, the total value of M2 is expected to successfully break through the 293 trillion yuan mark, and even more exaggeratedly, if we can really refresh the numbers in early 2024, it is not impossible to move towards 300 trillion yuan!
Historically, the first month of each new year has often been referred to as deposits"Super Hercules"Month. For example, at the end of January 2023, the increase in M2 increased by more than 7The figure of 4 trillion yuan, this kind of rapid"Leap"It's not something that can be achieved in just a few months.
So what is broad money (m2)?To put it simply, this thing is actually an indicator used to measure the size of the monetary aggregate;As for its annual growth, it is actually a method we use to measure whether the banknotes are printed fast or slowly.
Behind this figure is not only the rise of China's economy, but also the profound changes in the global economic pattern. So, what does this number mean?
Before analyzing, let's briefly review the history of the issuance of the renminbi.
In fact, the first renminbi was issued in December 1948, when the war of liberation was not completely over, but soon after, the Korean War broke out, and both wars brought severe inflation.
In this case, the value of the currency depreciates significantly and becomes more and more unstable, which is extremely detrimental to business transactions.
Therefore, when the second set of renminbi was issued in March 1955, China implemented a currency reform, which is what we call currency reform.
The exchange rate of the first and second sets of renminbi is 10,000 yuan to 1 yuan, which also means that China's monetary system has changed dramatically.
In recent years, China's total monetary output is about to reach 300 trillion yuan. So, when did the 300 trillion yuan we are about to usher in start to be calculated?
In fact, this "1 yuan" was redefined in March 1955. At this time, China began to implement currency reform, so we can also see this "1 yuan" as a sign of currency reform.
Since then, China's monetary aggregate has increased year by year, from 17.5 billion yuan in 1956 to 200 trillion yuan in 2020. This growth is staggering, but it also reflects the rapid development of China's economy.
So why is China's monetary aggregate increasing?This is mainly because of the rapid development of China's economy, especially after the reform and opening up, China's economy has developed rapidly, which has also brought about an increase in the total amount of money.
In addition, with the continuous improvement of China's financial system, China's monetary aggregate has also been continuously increased. Does the increasing number of currencies mean that inflation is rising?
First of all, we need to be clear that both inflation and deflation are relative. In economics, inflation refers to the general decline of goods and services, while deflation refers to the general decline of goods and services.
However, in reality, we usually see *** for some goods and services while others remain stable or decline. Therefore, we cannot simply define inflation and deflation as the **generalization** or decline of goods and services.
Second, a faster pace of monetary aggregate growth does not necessarily mean that inflation has increased. In some cases, money growing too fast can lead to deflation.
This is because money growing too fast can lead to an insufficient supply of goods and services, which will lead to a decline in the currency. In addition, if people's incomes can't grow at the same rate as money, then people may reduce consumer spending, leading to a decline in demand, which in turn leads to a decline.
Finally, China's price control target in recent years has been around 3%. This target was set based on a number of factors, including economic growth, employment, and the balance of payments.
Therefore, despite the fact that the CPI (Consumer Price Index) has seen some negative numbers, officials still deny that there is deflation at the moment. This is because the official belief that the speed of currency issuance is not slow, so it is not deflationary at the moment, but some people have deflationary expectations.
The total amount of money and the total GDP are always constantly **, so the CPI is currently hovering at a low level, which must be temporary, and will reach a suitable position in the future.
In short, the total amount of RMB currency is about to exceed the 300 trillion mark, which means that China's economy continues to grow and the global financial system is undergoing profound changes.
In economics, monetary aggregates are often seen as leading indicators of economic growth.
When the monetary aggregate increases, it means that there is increased liquidity in the market, which will help drive economic growth. Therefore, the breakthrough of the RMB monetary aggregate indicates the sustained growth of China's economy to a certain extent.
However, an increase in monetary aggregates does not mean that everything is going well.
Excessive currency** can lead to inflation, which in turn affects the stability of the economy. The good news, however, is that inflation has not followed.
This is due to the prudent and prudent monetary policy of the country. Through flexible monetary policy adjustments, the central bank has maintained a reasonable abundance of market liquidity and avoided inflation caused by excessive monetary **.
At the same time, the state has also strengthened the regulation and control of prices to ensure the stability of the market. This prudent monetary policy has provided strong support for economic development.
It not only demonstrates the strong strength of China's economy, but also reassures investors around the world and provides more security.
Don't feel bad just because the inflation rate in the country is temporarily low, after all, this situation is only temporary.
Because under the premise of sustained economic growth, inflation will sooner or later become an inevitable phenomenon, and it will be persistent and stable;On the contrary, deflation (i.e., currency depreciation) is only short-lived and not the norm.
Over the years, China's central bank has been cautiously controlling the amount of currency, showing the country's firm determination to stabilize the RMB exchange rate, narrow the gap between the rich and the poor, eliminate excess backward production capacity, and promote economic transformation.
These measures are the main reasons for the slow recovery of the post-pandemic economy. But that doesn't mean we have to lose faith in the future.
In fact, the interest rates on deposits that corporate banks can provide are getting lower and lower, and as long as there is a slight flow of domestic funds, it can have a earth-shaking effect.
Therefore, 2024 is likely to be a year of great counterattack for RMB-denominated assets, which is equivalent to a historic opportunity that is gradually kicking off.
Did you know that banknotes are printed more and more, and if there is no large enough reservoir to carry it, then when the banknotes really have nowhere to go, ** becomes an inevitable trend. This poses immeasurable risks to society as a whole.
Therefore, for the time being, the only places that can accommodate a large amount of social liquidity are the ** and the real estate market.
In the long run, we're actually standing right now"Market bottom"At this point, that is, for those with a discerning eye, it could really be a great investment opportunity right now.