In the next 2 months, China's M2 is likely to exceed 300 trillion!
In China's busy economic arena, there is an arrow that has always attracted people's attention – and that is price control. "Slap the ideal line of 3%."It has become a potential target in price control, but looking back at this year's CPI data, we have seen a modest figure of less than 1% and witnessed negative growth for several months. ** There were doubts about deflation, but policymakers did not share this view.
How so?The answer is hidden behind the amount of money. The comparison between the scale of financing and the growth rate of monetary volume in the past two years reveals the context of financial macroeconomic regulation and control, and illustrates the real logic behind the phenomenon. Although the growth rate of M2 money** is significant, looking at the scale of social financing, the broader economic vitality continues, even if inflation measures emerge one after another, and controversy continues.
The price index should not only focus on the narrow perspective of CPI, but also need to include a broader economic sector to seek a true reflection of inflation, such as "social financing growth rate GDP growth rate" and "M2 growth rate GDP growth". When you're immersed in a 3% return on investment in 1 year, don't forget that you're probably only surviving the line of survival rather than the actual line of economic growth.
*The latest interpretation of this phenomenon at the Economic Work Conference provides us with more directions for thinking. The adjustment of the expression of fiscal policy not only highlights the importance of social financing, but also emphasizes the expected goals, showing confidence in the moderate economic growth in the future.
However, the ratio of total M2 money** to GDP is rising, showing that we are not stingy with money**. Not to mention the short-term fluctuations in the CPI, from a long-term perspective, the speed of money and the growth rate of GDP seem to strongly suggest that the road to inflation prevention is long and necessary, and the economic recovery curve after the epidemic era is slowly rising.
Looking back on the past, the adjustment process of monetary policy is like an epic of climaxes, and we have witnessed the complex economic principles behind it: the coexistence of high efficiency and inefficiency has led to the need for monetary growth at a certain rate, thus ensuring the stable development of the economy.
It is against this background that we are able to draw the following conclusions:
1.Although the amount of M2 money is approaching the 300 trillion mark, the actual deflation has not yet arrived, showing the inherent stability of the economy.
2.Fighting inflation is a long journey that requires everyone to prepare and cope with over the long term, and deflation is nothing more than a flash in the pan.
3.The future economy will no longer be a simple era of currency printing, but a new era of technological innovation and capital market wealth construction.
So, as an investor and consumer, what are your thoughts on China's current economic direction?