M2 is the largest amount of money in the broad sense, representing the total amount of money in circulation.
Recently, a set of latest data from the central mother has attracted a lot of attention, data shows that as of the end of January, the balance of broad money was 29763 trillion yuan, close to the 300 trillion mark, far more than twice the scale of GDP in 2023.
With so much currency overissued, it is strange that the current domestic inflation remains relatively stable, and prices have not appeared sharply on the whole, what is going on?
In response to the intensification of the over-issuance of currency, some people in the industry first mentioned that inflation may hit in the future, and suggested that everyone should not do these "four things" in 2024
Over-issued currency
Inflation could hit in the future
From 2022 to the first quarter of 2023, M2 has added a total of 43 trillion yuan. Where does the money go?
1.A large amount of over-issued currency flowed to infrastructure, urban investment and other fields.
Our country has a vast territory, and there will be a large number of infrastructure construction projects to be launched every year, such as airports, high-speed railways, subways, highways, etc. in big cities. Random projects start from tens of billions, high hundreds of billions, and a large amount of funds are precipitated in some projects.
In addition, a new round of demolition and renovation in various cities also requires a lot of investment. Even, the construction of a large number of affordable housing needs credit support.
Obviously, the over-issued currencies have flowed to these areas. And the inflow of a large amount of capital in these fields will not be felt by the common people for a while.
2.Idling between financial institutions.
On the one hand, the reason why a large number of over-issued currencies are idling in the financial system and not flowing to the society is that in recent years, the money-making effect of capital markets such as the ** property market is too weak, which has exacerbated people's worries and led to the reluctance of over-issued currencies to enter the market.
On the other hand, under the influence of internal and external factors, the competition in some traditional industries in China is fierce, and it is becoming more and more difficult for ordinary people to make money, which has exacerbated the shrinking of consumer demand, which has further led to the lack of confidence in enterprise investment and the dare not expand blindly.
3.Ordinary people's consumption has declined.
It is undeniable that M2 is approaching the 300 trillion mark, and there will be a part of the over-issued currency flowing to the commodity market, exacerbating the increase in people's cost of living. For example, fruits, edible oil and other fields closely related to people's lives, some commodities will be high due to the increase in the amount of money in the market.
However, contrary to the previous trend, in recent years, people's incomes have not increased much, and many people are facing a decline in their incomes or even unemployed.
There is no income, in such a context, people often see that the demand for goods will be reduced when they buy goods, and this action further leads to the "unreal" oversupply of the market, in this case, even if some of the over-issued money flows to the market, it is difficult for prices to rise too much.
However, it is worth noting that with the economic growth, the improvement of the business environment, and the rise of the money-making effect, it is not ruled out that there is likely to be an over-issued currency flow to the commodity market in the future, and at that time, the domestic price trend will restart.
In addition, in recent years, international energy, food and other commodities have remained high, it is difficult to say whether there will be a new round of imported inflation in the future, under this expectation, it is recommended that you make some preparations in advance.
Four preparations
Be prepared
1.Avoid overconsumption.
In recent years, it has become clear that people are feeling the recession in all walks of life, and the expectation of job and income instability has increased. In order to get rid of this problem, more and more people are starting to join the team of saving money in case of unemployment, illness, etc. in the future.
In addition, if the income itself is sharply reduced or even unstable, in such a situation, if prices remain high, then blind consumption will only lead to the passivity of lack of funds for emergencies, and in serious cases, it will even fall into a deeper debt crisis.
Therefore, the wisest thing to do is to wait until prices gradually stabilize before proceeding to consumption. In this way, you can spend less money, buy more goods, and maximize the value of your money.
2.Don't invest blindly.
In recent years, in order to outperform inflation, many people have been overly chasing high-yield investments. However, in recent years, the capital market, not to mention, even the relatively small risk in the past and bonds have seen a large area of losses, in this case, investing in high-risk products, not to mention making money, the possibility of principal loss is greater.
Especially in the past two years, many listed companies have weakened their operating efficiency and insufficient cash flow, and under this trend, professional investors will have large-scale losses in the capital market, not to mention the best investors and the general public who have not learned professional skills.
After all, the market value of capital needs to be supported by long-term profits of enterprises, and if enterprises do not make money, investment is equivalent to speculation.
3.Avoid buying a house with high leverage.
In fact, regarding the purchase of a house, the recent cost of buying a house should be regarded as the lowest, after all, not only the current down payment ratio has dropped to 20%, but also the interest rate on the loan has even dropped to 375%, such a loan interest rate is indeed much more cost-effective than 5% or even more than 6% in the past.
And not only that, in order to buy a house for themselves, many favorable measures have been introduced, such as house purchase subsidies, deed tax exemptions, etc., which not only means that the threshold for buyers to get on the car is low, but also the pressure of monthly mortgage repayment after buying a house is much less than in the past.
But even if buying a house has reached such a cost-effective point, our advice is still to avoid buying a house with high leverage, whether it is a group of people who need it or those who need it, buy a house within your means, and it is best to pay no more than one-third of the total household income every month.
If the repayment scale exceeds 40%, the pressure to repay the loan will rise sharply in the event that income continues to decrease or unemployment in the future.
Therefore, even if you just need to buy a house in 2024, you must do what you can and don't do things that are beyond your ability.
4.Don't jump jobs or leave your job easily.
First, the economic growth performance is excellent, but the specific real enterprises and individuals to make money effect is still not ideal, in this case, the pressure of market employment competition intensifies, once the job hopping or resignation, it will inevitably face a big problem: fierce competition for reemployment.
According to the data of the Bureau of Statistics, in the past few years, nearly 4 million small, medium and micro enterprises in China have closed down, more than 13 million self-employed people have been cancelled, the number of unemployed people has exceeded 70 million, plus more than 10 million new graduates every year, which shows that the competitive pressure of today's job market is particularly strong.
Because in addition to a large number of people who need to find jobs, on the job supply side, the vast majority of enterprises have to reduce labor demand to survive because of the poor environment.
Therefore, in the past two years, it is recommended that young people should not easily change jobs or leave their jobs unless necessary, and take this opportunity to work hard to improve their human capital, so that they can have the opportunity to realize their value as quickly as possible in the future.
In addition, considering the current market overcapacity, as well as the fierce competition in the industry, superimposed on the sluggish consumer demand in the market and many other factors, it is recommended that aspiring young people want to start a business, but also be more cautious.
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