Experts predict CPI to rise next year

Monetary easing may not immediately cause inflation to see the shadow of inflation in the open column. Pork prices have sparked a wave of inflation fears more than 1 years ago. Now, the shadow of inflation seems to appear quietly: the rapid rise in housing prices, Beijing, some real estate prices "flying", the international oil price for six months almost dozen a "turnaround", domestic oil prices have been raised 3 times in half a year. In fact, even if the inflation rate of 3% to 4% is not high for China, where the economy is growing fast, experts worry that the CPI is "runaway" and the people are worried that "money will be worthless". So is inflation really coming?　　This edition launches the continuous report, "The hearsay" talks about the inflation. In people's common sense, "money is more natural than money", loose monetary policy will lead to excessive circulation of money, the financial system of excess liquidity, and ultimately lead to inflation.　　However, experts believe that in the current global economic and financial situation, loose monetary policy does not necessarily lead to inflation. The international community is nervous about the underlying inflationary threat that the Federal Reserve has been "printing money" to deal with the financial crisis. However, Stephen Green, a senior economist at Standard Chartered Bank (China), points out that China and the United States are different, and that the PBOC does not need a new currency when enforcing moderately loose monetary policy. In January-April this year, the PBoC's net injection of capital into the banking system was close to $1 trillion, a study he recently completed estimated. From a technical point of view, the current liquidity injection is not really going to "print new money", because these "money" already exists. In recent years, central banks have used central bank bills to hedge funds flowing into China through trade surpluses. So the central bank does not need a new currency, just a few shifts in the balance sheets of central banks and commercial banks.　　In other words, the central bank is currently printing money that has already been created. Yixianrong, a researcher at the Institute of Finance at the Chinese Academy of Social Sciences, says there is no inevitable correlation between excess liquidity and inflation. 2006 and 2007 were the most prosperous two years of our country's economy in recent years.　　While liquidity was rampant in those two years, asset prices rose rapidly, but CPI (CPI) growth was not fast until the asset-price bubble burst in 2008, with CPI growth reaching its highest level in years. What can not be ignored is that inflation and people's psychological expectations are closely related. According to a study of the state securities, the consumer spending is determined by expectations of future revenue and price expectations, if the community once the formation of price expectations, will increase the current period of expenditure and reduce the savings rate, thereby further pushing up the price increase more than expected to form a price bubble.　　As a matter of fact, real estate developers, gold stores and securities companies are trying to spread expectations of future price increases to investors. Green expects CPI to rise only next year as domestic and foreign demand recovers slowly and China does not see headline inflationary pressures. Late last month, he lowered the forecast for annual CPI inflation from 0.5% to 0.1%,The forecast for next year will be raised from 1.5% to 3.4%. Despite a doubling of forecasts for next year, he stressed that the inflation rate of 3% to 4% was not high for an economy that grew to 7% to 8% per cent.