What is the relationship between inflation, deflation and changes in the RMB?

Hello, I hope mine is helpful to you.

Friedman, a representative of monetary theory.

Inflation: The general and persistent occurrence of goods and services in excess of the actual money demand in circulation. Deflation is the opposite.

I take inflation as an example, the People's Bank of China, which is China's central bank, if you print too much currency (referring to the paper money we usually use, the bonds issued but not issued by the central bank, the state issuance, etc.). Originally, the market circulation was that we usually only needed ten yuan, but the central bank printed twenty yuan, so what we could buy for ten yuan now cost twenty yuan. For example, in the past, it took more than 1 yuan to buy instant noodles for 8 cents, and now it costs more than 1 yuan, which is the truth.

How to solve the problem is that the central bank has to issue an order to raise the interest rate of each bank, so that people will deposit the excess money in the bank, and the bank will have to hand over a part of the statutory reserves to the central bank, and the 20 yuan will become 10 yuan to buy it. But in real life, such a bank operation is difficult.

Talking about the financial tsunami again, I will give you three points:

1.It is said that China's treasury has a trillion US dollars in foreign exchange reserves, which were originally used by the country to carry out international investment activities such as import and export. These foreign currencies were bought by the Chinese people with blood and sweat "yesterday".

Pay attention to the word "yesterday", for example, yesterday the Sino-US exchange rate was 1:8, which means that the Chinese exchanged eight dollars for one dollar in the United States yesterday. But today the exchange rate has become 1:

6, the depreciation of 2 yuan, in fact, 2 yuan was "eaten" by the Americans who printed more money. Americans only need to sit at the banknote machine and print a few more pieces of paper, but the Chinese pay real labor for this. Then you can imagine how much the foreign exchange in the treasury will have to depreciate for every percentage point drop, and imagine a trillion to convert!

2.U.S. investment in China. For example, yesterday, an old American businessman had 100w US dollars to invest in China, so he had 800w yuan in his hand.

He invested in building a factory, and the scale of the factory was also there, and he waited until tomorrow. Tomorrow, he sold the factory to the Chinese worth 800w yuan. He converted the 800w yuan into US dollars, and the exchange rate was 1:

6。That is, his 800w became about $133w. His factory did not lose money or make money, but the US dollar was 33w more, and he brought the money back to the United States.

Chinese unwittingly became American wage earners, working for 33w dollars. As for this, I suggest that if you like finance, you can refer to Japan in the 80s, and we are a bit like Japan back then.

3.U.S.-China Imports and Exports** I'll tell you a little bit, Quanzhou Shishi foreign trade in 08 closed down nearly 2,000, you know how grim the situation is.

The excessive issuance of the renminbi causes depreciation

1) The Essence of Money Money is a special commodity that acts as a general equivalent in a fixed manner. In a commodity economy, the value of commodities is expressed through money. Money is a commodity.

It is a real commodity like a general commodity, and has the attributes of a general commodity; But money is a special commodity, it is the common value expression material of all commodities, and performs the function of general equivalents. With the continuous development of the commodity economy, new changes have also taken place in the form of money. However, no matter how the form of money changes, the essential role of money as a general equivalent will not change.

2) Causes of Inflation and Deflation The macroeconomic result of the issuance of money contrary to the law of money circulation is inflation or deflation. Inflation and deflation are both monetary phenomena. Inflation refers to the monetary phenomenon of currency depreciation and price ** caused by the loss of control over the issuance of currency symbols.

Therefore, inflation is an economic phenomenon that is closely linked to the circulation of paper money, and it can only occur under the conditions of paper money circulation. Deflation is an economic phenomenon that is the opposite of inflation, manifested by insufficient social demand, weak price levels or **. Essentially, deflation is a monetary phenomenon caused by a relative shortage of money in circulation.

Under the conditions of commodity economy, the expansion or contraction of the scale of commodity circulation, the acceleration or slowdown of the speed of commodity circulation, and the acceleration or slowdown of the speed of money circulation all occur under the influence of various spontaneous factors, therefore, the demand for money in circulation is also changing spontaneously, and it is difficult to achieve it. Under the conditions of the gold standard, there will be no excessive currency, because the amount of money in circulation can be spontaneously adjusted by the function of ** as a means of storage, and too much metal coinage will spontaneously withdraw from circulation and be stored, so metal money will not exceed the needs in circulation. Under the condition of paper money circulation, on the one hand, because paper money circulation technically has unlimited possibilities of money supply, and through the power of the state to force money circulation, thus weakening or even destroying the spontaneous adjustment mechanism of money circulation.

On the other hand, as a symbol of value, paper money itself has no intrinsic value, and the paper money that enters circulation cannot be withdrawn from circulation through storage, which leads to money.