Financial Weekly: How economic experts see inflation

Text reporter Zhang An: How is current inflation formed? How will inflation be developed in the future? This is an issue of concern to everyone who is deeply worried about inflation.　　In this respect, the experts from the economic circles have made incisive analysis from their respective angles. After the economic recovery and the monetary excess to incur inflation Lu County (Chief of Industrial Bank) economists talk about the causes of inflation, international and domestic in fact basically the same, is due to the large supply of money. Internationally, major Western countries, notably the United States and Japan, have so far been on the path of "quantitative easing" of money, which directly provides the conditions for higher commodity prices. The same is true in China.　　According to statistics, the 2009 national RMB loans increased by 9.59 trillion yuan, the year-on-year increase of 4.69 trillion yuan, about twice times 2008, credit scale is unprecedented.　　In the context of such global economic stimulus, some countries that have not been hit by the financial crisis, mainly emerging economies, have taken the lead in recovery, providing sufficient conditions for international commodity prices to rise. So in simple terms, a large volume of currency issuance is a necessary condition for inflation, and the recovery of emerging economies is expected to increase commodity prices. Since emerging economies are the main demand countries for commodities, they have created sufficient conditions for inflation.　　The combination of the two eventually led to this round of inflation.　　For future inflation expectations, emerging economies took the lead in a policy crunch after the first recovery, but the challenge is that the US-led country's monetary policy is still quite loose, so even if the tightening of the future, the pressure of domestic asset bubbles and international input inflation will still exist, inflation can not quickly weaken. In fact, the current inflation in our expected. Inflation in 2010 is generally moderate, with a target of around 3% to be reached, and the real challenge is that in 2011 inflation still has a tendency to go up.　　This round of inflation is likely to last around the first half of 2012. As for the current international inflationary environment, emerging economies are facing inflationary pressures from a static perspective, while advanced economies are facing deflationary pressures, but looking ahead, the world faces inflationary pressures. The recent US issue of inflation-protected bonds, which have been adjusted by the CPI in the last year to fight against inflation, has shown negative interest rates, which means that the bond has been snapped up in the market and that the market's future inflation expectations are very strong.　　It is not hard to see that even in a country where there is still a risk of deflation, such high inflation expectations, the future of global inflation should be predictable. The biggest risk for emerging economies in the future is the risk of asset bubbles in the case of massive quantitative easing by the US, the global currency, and a weaker dollar. But the level of asset bubbles is often beyond recognition, and policy cannot take forward-looking action or even make mistakes.　　Fortunately, inflation is now emerging, and the policy of interest rate hikes has been introduced, thus reducing the likelihood of future monetary policy errors. Three bigCurrency "flooding" makes money worthless sun Lijian (vice-dean of the School of Economics, Fudan University, professor of finance) to see this inflation, first of all to review the United States before the financial crisis, the major financial innovation. Financial innovation in the United States helped raise asset bubbles, and people's hands were rapidly growing, even beyond wealth.　　When the crisis suddenly came, the original has a considerable purchasing power of the ticket into a bad asset. In fact, the financial crisis can solve the problem of currency flooding, but each country did not take a "hard landing" approach to the crisis, instead of injecting financial institutions, large enterprises to fail.　　"The financial crisis could have brought back the money that had been created, but the fact was that the debt that should have been lost was resurrected, and the vast amount of money created 2008 years ago has not diminished or digested." The trigger for this bout of inflation is the continued easing of monetary policy in the United States that makes people no longer trust money.　　He said that in the former gold standard, the value of banknotes is determined by the gold, and now, the value of the global currency is determined by the three major currencies, namely the dollar, the euro, the yen, the three major currencies of the water to make the currency become worthless. When people feel that financial assets have been flooded, when it is not reliable, it will invest in financial assets into agricultural products, iron ore, commodities and so on, such as our well-known financial big Hencolos, Buffett has begun to invest in hard wealth to seek profits, which also led to higher upstream resource prices, Thus causes the downstream investment environment, the consumer environment together the price increase. Among them, the investment environment price increase is refers to the enterprise cost increases, causes it to pass the cost to the production final product, forms the cost promotion type price to rise. People will be because of the price of agricultural products, very intuitive to feel the rise in prices, and some of these people have the ability to transfer costs, such as he himself is a merchant operator, then he found that living expenses increased, even if he is not a producer, will raise the price of goods sold, To hedge against the effects of rising prices.　　In this way, a comprehensive price rise has been formed. But there is no inflation in the countries of Europe and the United States, where the bulk of the commodity is forced to raise interest rates earlier. With the return of capital, Australia, the iron ore exporter, has had to raise interest rates, while manufacturing and emerging-market currencies are appreciating, and inflows of overseas capital will create asset bubbles, so they have also had to take the lead in raising interest rates, which creates an opacity to the future recovery of the world economy.　　Not only are European and American financial crises coming, but countries that have not suffered in the previous crisis have all rolled in. As long as the United States does not abandon its accommodative monetary policy, global inflation will have no peace and future inflation will only get worse. The world economy will recover only if Europe, America and Japan abandon low-interest policies, and the trend of large inflows of hot money into emerging markets slows.　　When the cost of production is stable, the profit of the enterprise is likely to rise, the employment situation will improve, and people's life will become better. Inflation pressure next yearThe force may be greater Li Wei (Chinese economist at Standard Chartered Bank) from the data point of view, the rise in food prices is the main factor, and this increase does not show signs of slowing, next year inflationary pressure may be greater. Even if inflation slows at the end of this year, it will only be short-lived, and inflation in the country will intensify in 2011. It can be said that it is only in the initial stage of inflation, so it is necessary to adjust the interest rate. The emergence of domestic inflation cannot be blamed entirely on monetary easing in Europe and the United States.　　Although the rise in food prices, there are certain speculative factors, but on the whole is affected by the domestic economic recovery, rising demand, liquidity adequacy. The price of all kinds of goods has an impact on each other, in the case of rising house prices, people will feel the relative depreciation of income, in order to increase income, farmers may have to raise the prices of agricultural products, businessmen will raise the price of goods, and then there is the situation of mutual price increases.　　Curbing inflation requires a comprehensive approach to management, not a desire to control only the price of a single commodity. Because the bubbles in asset prices have a penetrating effect, it is necessary to take active measures to curb the formation of bubbles. The smooth operation of the real economy is inseparable from the stability of various commodity prices.　　At present, the Government adopts the means of raising interest rate, which can play a certain role in restraining asset bubbles, which is very necessary in the long run. (This article is organized by the reporter according to the opinion of experts)