The bigger the M2, the less valuable the money, and why is the M2 getting higher and higher?

M2 is a broad currency. It cannot simply be said that the greater the currency (money) of M2, the depreciation. The value of money is determined by both demand and supply, when the demand for money is constant. The larger the m2, the depreciating of the currency. It's just that money is worthless.

Can you only watch your money get less and less day by day? Bohai Commodity Exchange is very suitable for everyone. Inflation today.

The problem is indeed very serious, the money is getting more and more hairy, and I want to save a little money to find that the money is becoming less and less valuable.

M2 is a description of the change in size and money supply, under normal circumstances, the increase of M2 stock increases the money supply, otherwise it decreases;

The value of money is a description of the purchasing power of money, that is, the amount of money that can buy an item.

There is a theory in economics that the supply of M2 is the most suitable for social development (generally countries expand their money supply at a rate of 3% per year).

Then, if the value of M2 changes within a reasonable range, no matter whether it becomes larger or smaller, it will not cause a significant change in the purchasing power of money, and of course not within this range will produce inflation or deflation, that is, the larger the less valuable, and the smaller the more valuable.

As far as China is concerned, due to the strong macroeconomic development (which has been decelerating recently), the demand for money has also been increasing, so the central bank has issued a large amount of base money (both passive and active) in recent years, so as far as China's current M2 is concerned, there is obviously an over-issuance of money, and inflation continues to occur this year, that is, money is worthless.

Hope it helps.

M2 growth means that money is constantly over-issued and inflation increases. At this time, the over-issued currency needs to enter the hand-held market, including real estate, consumption, finance, etc., in short, these increased currencies must be apportioned to the public with the help of a carrier. M2 is the amount of broad money, and many countries take M2 as the target of monetary regulation.

M2 refers to the cash circulating outside the banking system plus corporate deposits, household savings deposits and other deposits, it includes all forms of money that may become real purchasing power, and usually reflects the changes in aggregate social demand and the pressure state of future inflation.

In addition to M2, there are M0, M1, and M3, where M0 = cash in circulation, the sum of the cash owned by enterprises outside the entire banking system; Narrow money (m1) = m0 + corporate demand deposit; M3 = M2 + financial bonds + commercial paper + large negotiable certificates of deposit, etc.

At the same time, M2 and M1 are often combined and analyzed, when M2 is too high and M1 is too low, it indicates that the investment is overheated, the demand is not strong, and there is a risk of crisis; M1 is too high and M2 is too low, indicating strong demand, insufficient investment, and risk of price increases; The state can also take M2 as the target of monetary regulation, when there is more M2 currency, the country can adopt a certain tightening monetary policy to reduce the circulation of currency in the society, on the contrary, adopt a certain loose monetary policy to increase the circulation of currency in the society.