Why is the domestic money more and more worthless? The amount of money in excess

In life, people feel that the renminbi is becoming more and more worthless at home, while abroad, the renminbi is becoming more and more valuable. In fact, the former is about the domestic purchasing power of the renminbi, the latter is about exchange rate ...

Often heard a lot of people complain: "Not to say that the renminbi appreciation?" So the money should be more ' valuable '? But why do I feel money is getting worthless? "Here we first give an example to solve the confusion."

Aunt Li in the market to buy rice, found that at this time the rice is 3.30 yuan/kg, she remembers this rice in 2005 for 1.90 Yuan/kg, so can be calculated the Rice price index is 1.74, 8 years, the average annual increase of 9.2%. In terms of the ability to buy rice, compared with the 1000 yuan in 2005, 1000 Yuan in 2013 has shrunk to 576 yuan, that is, the renminbi has depreciated internally.

But when Aunt Li went to the bank of China to buy foreign exchange, she saw that the current exchange rate is 6.17 yuan for 1 dollars, and she can buy 162.07 dollars with 1000 yuan. She remembers 8 years ago, 8.28 yuan to 1 U.S. dollars, then 1000 yuan to buy only 120.77 dollars. For 8 years, the renminbi has risen more than 34% against the dollar. Today, her currency could be traded for more dollars, and exchange rates rose to make the renminbi more valuable in exchange for the dollar. This is the increase in prices brought about by the internal devaluation of the renminbi and the rise in the exchange rate of the renminbi foreign appreciation.

This example shows that the purchasing power of money and exchange rate are two different concepts. The purchasing power of money refers to the ability of the unit currency to buy goods and to pay for services under a certain price level. The exchange rate refers to the exchange rate of two currencies. In life, people feel that the renminbi is becoming less valuable at home and that the renminbi is becoming more valuable abroad. In fact, the former is about the domestic purchasing power of the renminbi, the latter is concerned about exchange rates.

Over the years, because the domestic economic growth depends more on investment, relying on a large number of increased credit, the amount of money in our country, regardless of our own past, or compared with the world, there are a large number of super hair. By the first quarter of this year, the broad currency (M2) had exceeded 100 trillion trillion yuan, at the beginning of 2002 at 16 trillion yuan, and more than 10 years in the growth of more than 5 times times. The ratio of China's total currency to GDP is over 200%, China's economic total is the second in the world, about 1/3 of the United States, and the volume of money than the first economic total of the United States 1.5 times times higher, ranked first in the world.

Generally speaking, the amount of money and the overall level of prices have a rise in the corresponding relationship. But in reality, after the money, often not performance for the market all the goods are at the same time, the same proportion of the price increase, but performance for some commodity price is ferocious, some will rise relatively smooth, some will be a trend of price decline. This is determined by a number of factors such as the demand for specific commodities, supply status and buyers ' expectations. Domestic big cities in the price of commercial housing rising is the most prominent is ferocious.

As we all know, the current appreciation of the renminbi is also driven by the depreciation of the dollar, rather than the yuan's active appreciation. Because of the problems of China's economic structure and the weakness of the agricultural chain, the domestic commodity prices and international commodity prices have been rising synchronously. This has become the exchange rate of appreciation of the renminbi, and the people in daily life but feel the depreciation, money is increasingly worthless important reason.

The impact of this situation on the domestic economy is multifaceted. For example, in favor of domestic enterprises to reduce import costs, in the import of domestic raw materials, energy, High-tech products, various consumer goods, as well as the repayment of foreign debt will benefit, but also conducive to overseas travel, study abroad, investment. But it will increase the cost of exports to domestic companies, especially those that rely entirely on low-cost products, cheap labor and a thinner profit.

In the case of a revaluation of the renminbi, in which the dollar continues to depreciate against the renminbi, if Aunt Li had saved a dollar 8 years ago, the amount would certainly have been greatly reduced by today's change of currency. As a result, there is a growing trend in the country that the dollar's depreciation has caused people to hold the dollar, especially the huge national foreign exchange reserves and government purchases of U.S. debt, more than 3 trillion of dollars in foreign and U.S. debt has lost more than 1/3, more than 1 trillion U.S. dollars, and so on, the remaining dollar will become waste This is a foreign reserve by the international conspiracy to harm.

The mistake is to confuse the inward devaluation of the currency with the appreciation of the foreign exchange. To be clear, the internal devaluation reflects the decline in domestic purchasing power, which is the monetary self-comparison, while the renminbi appreciation, the dollar against the renminbi as a concept of exchange rate, is the comparison between different currencies.

In modern society, in addition to collectors, the basic purpose of the pursuit of money is to buy things, including the convenience of exchanging other currencies, that is, to buy Chinese goods, to buy American goods and goods that can be paid internationally, not to guarantee the value of the renminbi or other currencies. Because in today's free exchange system, no currency has this ability.

Therefore, to see if the dollar has been damaged and whether the dollar will become waste paper, it is also necessary to separate the dollar from its domestic purchasing power and the dollar exchange rate, rather than looking at the individual dollar value of the renminbi. The former depends on the price level of the United States, while the latter looks at the dollar index.

In the past more than 10 years, inflation in the United States has not been high, averaging around 2.5% annually. If the purchase of Boeing 747 aircraft, its price from 2008 300 million U.S. dollars/frame, up to 2010 of 317 million U.S. dollars/frame, annual growth rate of 2.87%. This shows that the Chinese hold a dollar, relative to the rest of the world, the dollar's domestic purchasing power, although a decline, but the decline is still one of the lowest.

As for the annual yield on US debt above 2.5% per cent or higher than the US price index, its purchasing power is not lost relative to the basket of consumer goods or Boeing 747.

To see the dollar appreciation or depreciation of the situation can not only look at the relationship with the renminbi, more to see the dollar index. The index measures the extent to which the dollar changes in the exchange rate of the euro, yen, Sterling, Canadian dollar and other freely convertible currencies. The rise in the dollar index showed a rise in the dollar against other currencies, an appreciation of the dollar and a strengthening of the dollar, which meant that the decline in dollar-denominated commodity prices in the international market would benefit U.S. imports but would not be conducive to exports. For other countries and individuals holding the dollar at this time, it also means that purchasing power in the international marketplace is enhanced. Conversely, the international purchasing power is reduced, favorable export, unfavorable import.

In recent years, the dollar index has been hovering around 70~90 points. 2012-Year minimum of 78.77, up to 80.20; this year January 79.21, July has been at 80多 points.

For other countries and individuals who hold dollars, their purchasing power to buy dollar-denominated goods in the international market fluctuates in one range, rather than "valuable" in the United States, but certainly not as waste paper, so conspiracy to say is unfounded.

Therefore, the holder of the dollar, whether individuals or governments buy back goods and services that are effective in dollar terms (including investments), especially in the US market (which is more stable in the domestic purchasing power of the dollar than in the international market), there is no "swindle". It would be unwise to hold the dollar for long without or to simply maintain the ability to buy certain goods in the international market, and to buy renminbi or euros in the future.