Why does the issuance of more money than the market needs trigger inflation?

Inflation originally referred to the depreciation of currency caused by the issuance of paper money in excess of the actual demand in the circulation of goods. The law of paper money circulation shows that the amount of paper money issued cannot exceed the amount of gold and silver currency it symbolically represents, and once it exceeds this amount, the paper money will depreciate and the price of goods will be **, resulting in inflation. Inflation occurs only under the conditions of paper money circulation, and not under the conditions of gold and silver currency circulation.

Because gold and silver money has value in itself, its function as a means of storage can spontaneously regulate the amount of money in circulation so that it is compatible with the amount of money required for the circulation of commodities. Under the conditions of paper money circulation, because paper money itself has no value, it is only a symbol representing gold and silver currency, and cannot be used as a means of storage, so if the amount of paper money issued exceeds the amount required for commodity circulation, it will depreciate. For example, the amount of gold and silver money required in the circulation of commodities remains unchanged, and the amount of paper money issued exceeds twice the amount of gold and silver money, and the unit of paper money can only represent the value of the unit of gold and silver money 1 2, in this case, if the price is measured by paper money, the price will be doubled, which is commonly known as currency depreciation.

At this time, the amount of paper money in circulation doubles the amount of gold and silver money needed in circulation, which is inflation. In macroeconomics, inflation mainly refers to the general rate of wages and wages.

In modern economics, inflation refers to an increase in the overall price level. General inflation is a decrease in the market value or purchasing power of a currency, while currency depreciation is a relative decrease in the value of two currencies. The former is used to describe the value of the national currency, while the latter is used to describe the added value in the international market.

The correlation between the two is one of the economic controversies.

A renminbi can't be exchanged for a dark coin.

Printing money and circulating in large quantities. Can prices not rise or fall? This is the inevitable relationship.

After there is more money, people's income will also be mobilized to cater to the market, and the income will increase, and the money will become less and less valuable, so the price will be **.

I understand ).

Currency over-issuance, more currency in circulation on the market, assuming that a rocket was originally 200 million, no one could afford to buy it, and now everyone has bought the currency over-issuance, and the rocket has risen from 200 million to 2 billion, and this price increase is inflation.

People with over-issued money suddenly become rich, and there are more people who can afford to buy things, but the number of things remains the same, and when the demand remains the same, it will lead to prices.

The central bank is printing money every year, the same as other printed banknotes, if the central bank over-issued, the over-issued currency directly into the treasury, and then to all levels of ** and ** wages, or the shantytown reform policy into the hands of the demolition households, demolition households or ** consumption, you can enter the market.

The central bank's currency issuance is not as much as possible, and too much issuance is a feeling, and the central bank's currency issuance is not issued at will, and needs to match the GDP growth rate, price factors, macroeconomic control, exchange rate policies and other factors. If there is too much issuance, it will inevitably lead to multiple effects such as price overheating, economic overheating, and exchange rate depreciation.

1. The central bank's currency issuance mechanism.

The central bank's monetary mechanism is a complex system, after 2000, the main channel is foreign exchange, that is, the central bank uses the foreign exchange in the RMB market, and then puts RMB into the market, at the same time, bonds, open market operations, and the deposit reserve ratio are also the main ways for the central bank to issue and regulate currency. In recent years, in the central bank's currency issuance, the proportion of foreign exchange has weakened, and the means of bonds, open market operations and other means have been strengthened. It can be seen that the central bank's issuance of currency is multi-faceted and controllable, and if there is more money in the market, there will be tightening policies, and if the market liquidity is tight, relevant policies will be relaxed, and there will be more money circulating in the market.

To understand whether money is over-issued, it is necessary to understand the central bank's monetary issuance mechanism, know which policies and data are monetary expansion, which policy data are tightening money, and the measurement indicators of currency issuance are mainly related to M-series data.

Second, excessive currency issuance is a false proposition, and the central bank has a strict regulation and control system for currency issuance.

If the market sees prices** exceeding the target range, the central bank will tighten monetary policy to stabilize prices within the target range. If there is an overheated economy in the market and obvious signs of a bubble, such as ** and the property market, the central bank will also consider tightening monetary policy to avoid economic bubbles. If there is an abnormal fluctuation in the exchange rate, the central bank will also take relevant measures to stabilize the exchange rate.

Therefore, excessive currency issuance is a false proposition, which needs to be considered at the same time to measure the GDP, debt, CPI, exchange rate and other comprehensive factors of the host country, if the total debt is within a reasonable range, CPI is stable, and the exchange rate is stable, it means that the currency is not over-issued, which is reasonable. We say that the U.S. currency is over-issued, mainly because the proportion of debt to GDP is too high, and at present, domestic debt (public debt) has been reached, and external debt (external debt) has been reached, while China's domestic debt only accounts for external debt.

Modern society is a credit society, the issuance of money is a series of systems such as issuance, regulation and regulation, supervision and so on, which need to be measured to adapt to economic development, to consider comprehensive factors such as prices, exchange rates, debts, social finance, etc., and to scientifically measure whether it is over-issued.

If the issuance is too large, it will lead to inflation and at worst, it will bring about an economic crisis, so the amount of currency should be issued.

Ideally, the amount of money in society should meet the supply and demand of society. The money supply exceeds the total amount of social commodities, that is, the supply of commodities exceeds demand, resulting in the ...... of prices; Vice versa.

Isn't it better to have as much money as possible? What is the pressure of too much issuance?

1. Don't be in a hurry to buy **, don't just want to buy the lowest price, this is unrealistic. It is also good to really pull up**You are the high price**, so it is better to buy**miss, not to be at fault, not to buy and sell blindly**, it is best to buy **familiar with the disk**.

2. If you are not familiar with it, you can simulate trading first, be familiar with the nature of stocks, it is best to follow for a day or two, familiar with the operation methods, and you can master the best points.

3. Pay attention to the necessary technical analysis and pay attention to the trading volume.

and the language of the order (in the case of order orders).

4. Try to choose hot spots and appropriate points, so that the stock price can be out of the cost area after the same day.

Three people and: ** is more, the popularity is strong, the stock price rises, and vice versa. At this time, what is needed is personal ability to watch the market, and whether it can find hot spots in time.

This is the key to success or failure. **Operation** to be ruthless, the mentality to be stable, it is best to be correct**after the stock price** out of the cost, but once the judgment is wrong, when it comes to adjustment**, it is necessary to sell the stop loss in time, you can refer to the previous post: win in the stop loss, here will not be repeated.

Fourth, the skills of selling**: **It is impossible to be all the time**, there will be adjustments when it rises to a certain extent, then the **operation will be sold in time, generally speaking, when making money, it is right to sell at any time. Don't want to sell the most, but for the sake of the greatest profit, there are still skills in selling, I will introduce my experience (not necessarily the best):

1. There has been a certain large increase, and the ** volume is rapidly rising to the price limit.

If you don't have a closed limit, you can consider selling, especially if you have a long upper shadow.

Target. If you put a huge amount of stagflation or a long upper shadow line in the minute or daily line, you generally do not continue to increase the volume the next day, and it is easy to form a short-term top, so you can consider selling.

3. You can see the time-sharing chart.

The 15 or 30-minute chart, such as 5** cross 10 days ** down, the trend feels weak to sell in time, this trend is often the beginning of the **adjustment, very valuable reference.

4. For the wrong purchase, you must stop the loss in time, the higher the better, this is a long-term actual combat practice accumulation process, you have to pay if you see the mistake, there is nothing to wait.

If the currency is excessively issued, it will lead to social inflation and affect the normal order of the market economy.

After the increase in currency issuance, although the money did not immediately reach the people, the market expected that the price would be **, and the price would be ****. This is known as "inflation expectations". The central bank has always said that it wants to manage inflation expectations, and once such expectations are formed, then real inflation is not far off.

As for why does an increase in the issuance of money lead to prices**? There are mainly the following conduction pathways.

The increase in currency issuance is mainly used for investment projects (mostly iron and public base projects) - raw materials (coal, ore, etc.) **** - other products in the middle and upper reaches (steel, non-ferrous metals) due to rising costs - prices in the middle and lower reaches (automobiles, home appliances) - other downstream products (daily necessities) due to the price comparison effect, **********==== inflation formation.

In terms of inflation, doesn't the increase in wages speed up prices? Wage increases are passive and active, passive is caused by factors such as the increase in currency issuance and prices, and the active wage increase is mainly the leading (this is rare) ......As long as the amount of money in the whole society does not increase, wages will not speed up prices.

I used to buy an apple for 1 yuan, but now I print another yuan, adding up to 2 yuan, and the apple is two yuan. At this time, the purchasing power of two yuan is the same as that of one yuan in the past. That's inflation.

If more money is issued, the amount of money circulating in the market will increase, which will cause inflation and price concessions. For example, the state issued more currency, came to the market in the form of loans, and bought houses. As soon as the developer sees that there are many people buying houses, they will increase the house price accordingly, and the price will be formed**.

Of course, prices lag behind and will only manifest themselves after some time of increasing the issuance of money.

Wages will rise after prices, not wages will rise after wages**.

If you have studied history, you should remember the large-scale issuance of fiat currency in the later period of the Kuomintang rule??? At that time, we had to use bags of money to buy things, which was a very cheap commodity, and it was because we didn't get into the hands of the people that we would feel the price of **? If prices go up and wages go up accordingly, we won't feel the price of goods. The vast majority of this money is used by central banks and commercial banks to pay for international settlements.

Payments and loan investments went. and it did not come into our hands.

Yes, wage increases are only to curb inflation to a certain extent, and can only play a temporary role, not a long-term solution, and the main thing is to keep the price level within a reasonable and acceptable range.

Here's an example that's easier for you to understand.

Now China is the equivalent of a store.

The store only sells apples in total.

version of 20 pcs. There are a total of 5 consumer rights holders, and each person has 20 yuan.

There are a total of 100 pieces on the market.

Apples are the only shovels they can consume.

Then an apple costs 5 bucks.

Then another man came, and he brought 100 bucks.

At this time, there are 200 dollars in the market, and there are still 20 apples, because apples are the only thing they can buy.

So one apple becomes 10 pieces, and that's inflation.

Because the purchasing power of people who used to have 20 yuan in their hands changed from 4 apples to 2 apples, I don't know if you can understand this.

Which one understands you supplement the question and we continue to discuss.

My metaphor here is not really about bringing money, it's about how much money is circulating in this market, and there is more money circulating in the market, and the same thing is the same, and that one thing is naturally more expensive.

To put it simply, Bai was originally a year to create 1 billion yuan of wealth, and it was enough to issue an additional 1 billion yuan of DAO coins, but the state did issue 2 billion yuan of currency, and the extra 1 billion yuan was inflated. Now the country needs money, to raise the salary of retirees, retirees do not create value, but wages rise every year, where to get money, only to print money.

For example, if there is a 100 yuan commodity in the market, the original currency is issued for 100 yuan, and the commodity is bought with 1 yuan, and if 110 yuan is issued, then 11 yuan is used to buy 10 yuan of goods.

Causes of inflation: over-issuance of money, shortage of goods, growth in purchasing power. Over-issuance of money is one of the causes of inflation.

It should be put into the market through bank loans and the like, just like the four trillion leap forward in 08, as long as you apply, you can get a loan.

Money is the medium of exchange of goods, and the trading volume today is 1 billion, and tomorrow's trading volume is 2 billion. Then you need to borrow 1 billion from the bank. The trading volume the day after tomorrow is still 1 billion. Currency depreciation.