Water Skin: What Can Be Done?

Diaos with a chairman heart.

This is a fate that all Chinese investors can not escape. As a profession, economists are born in China. It is also a controversial but also dramatic life. When the Chinese government's economic policies change, they often play some kind of post Zhu Geliang think-tank role. Even though many times they are outsiders, they can only imagine that many of their understanding is specious central spirit. This is not to say that Chinese scholars are incompetent, but that China's policies are opaque for a long time, and that different leaders may use different languages.

The central economic work conference in 2014 has ended, and Xi has made a long speech again. If we were not satisfied with the general secretary's substantive leading of the central economic work conference last year or the year before last, the speech has already been used for a long time, and his speech has not disappointed. Besides the relaxed and lively style, the new words and sentences are also flowing smoothly, such as the imitation type of wave discharge.

For example, innovative supply to activate demand, such as new business mode, new comparative advantage, such as driving force of scale of factors, such as

Such as explicit risk, such as changes in total supply and demand, scale and speed, quality and efficiency, market and consumer psychology, entrepreneurship, innovation driven, steady growth and structural adjustment, three horse driving balance, annual characteristics, long distance institutional arrangements, SOE reform to enhance vitality and efficiency as the core, interval regulation and so on.

The new thinking of economics is largely a resonance with the new supply economics advocated by a group of young economists, but it is not exactly the same. Frankly, like water users, they are also a bit of a smattering. Even if they are guessed, it is not important to grasp all the facts. What matters is what conclusions can be drawn from the great speeches. The conclusion is that in the new year, the central government will stabilize the economic growth with a more positive attitude to hedge the systemic risks of the adjustment of economic growth. The fiscal policy is not only active but also more powerful, that is to say, the government will invest more, and the monetary policy will be tighten. If anyone thinks he understands all the subtext of Xi, he must be a self deceiving fellow.

Overall, the market environment and money supply in 2015 will be better than that in 2014, which is certainly good for the capital market.

Well,

How loose can pine be?

There may be very little deposit reserve rate at 20%, which is also known as a stable central bank, and the reason why the central bank is so popular is that the basic money supply can not be completely decided. The M2 has been multiplied by ten times in the past ten years, and most of it is caused by the passive exchange of foreign currency. The RMB is not an international currency, and the US dollar can not move in China. The US dollar must enter a considerable amount of RMB in China. The more foreign exchange reserves, the more passive the RMB is put in. The multiplier of money flow will continue to maintain 12% to 16% growth every year. This will not be shifted by the central bank's will. In order to hedge these inputs, the central bank will first use M2 to raise the deposit reserve ratio, and the other is to use the central bank directly. China's monetary policy has been habitual tightened in the central bank, so we believe that if it is not intentional emphasis on prudent or loose, then tightening itself is synonymous with monetary policy.

In other words, if foreign exchange has been growing all the time, the central bank has nothing to do but tighten up. This is a dead knot. It is also the contradiction between China's current financing difficulties.

It is grim to note that in 2014, foreign exchange yuan has dropped 1 trillion and 400 billion of the basic currency. The central bank has launched many new tools to ease the tension, such as SLF standing lending facilities, PSC mortgage supplementary loans, MLR medium-term lending facilities, plus targeted reduction, at least 1 trillion and 300 billion yuan supply, barely maintaining neutrality.

According to the calculation of the relevant people, the demand for basic money in 2015 will remain at around 4 trillion. In addition to the 1 trillion yuan in foreign exchange, the gap between supply and demand will reach 3 trillion. Now it will make up for 600 billion of the basic money supply. Theoretically, it is necessary to reduce the funding gap by 5 times in order to solve the funding gap. This is, of course, only an arrangement. It is virtually impossible to drop so many times. However, the drop is inevitable. The more the QE exits, the faster the US will increase its interest rate and raise its interest rate.