Fast direct financing in favor rational allocation and use of funds improving efficiency

 Differences between China and the U.S. M2 data

Currently, the Fed's liabilities of about 2.4 trillion U.S. dollars, broad money (M2) of about 8.4 trillion U.S. dollars. the People's Bank of the liabilities of about 24 million, equivalent to 3.6 trillion U.S. dollars, M2 about 70 trillion yuan, about 10.5 trillion. Both the monetary base or M2, the Chinese are much higher than the United States. If the growth rate relative to GDP, China's M2, much higher than the growth rate of more dollars. Based on the above understanding, the experts made a solution:

form from the M2, the most suspicious is the enterprises and deposits. According to China's current structure of the borrower, only the enterprises and deposits will be inflated because the banks gave loans beyond the current needs, not the internal expansion of enterprise business results. may be used up some business loans, virtual swollen; really need funding companies are not lending, real loss.

In fact, China's M2 M2 with the United States are not comparable. This is because the two countries in different stages of economic development, economic structure and financial structure due to a difference.

one currency should be devalued. But Why both the market, or the People's Bank is facing pressure of RMB appreciation?

is confusion, despite the direct financing of China's stock markets, the rapid development over the past few years, but the past few years the growth rate of China's M2 growth rate should be coupled with the inflation rate than the GDP of many large, such as the 2009 China GDP growth of 9.2% CPI is almost zero, but the M2 growth rate of more than 25%, why? This is because the growth of some of M2 does not reflect the economic expansion.

U.S. financial system, the total assets of the banking system is only about 12 trillion dollars, the market value of the stock and bond markets over 60 trillion dollars, that is the proportion of direct financing in the U.S. economy more than 80%.











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Second, a large number of recovery of mobility. The question is how can issued more than 20 years to recover money in the short term? China's GDP is 20 years or so will return to the level 10 years ago?



Third, the flow diverted to the stock market, in order to avoid an impact on the real economy. But the stock market really can absorb up the so-called excess liquidity?

contrast, the Chinese banking system's assets exceed 80 trillion yuan, the scale of the stock and bond markets is only 20 trillion yuan, China's economy mainly relies on the indirect financing. Therefore, the Chinese M2 grew faster, slower U.S. growth in M2, China M2 M2 better than the United States reflect the economic development. This is also the Federal Reserve back in the 80s of last century as a currency is not then M2 intermediate policy target, but in the interest rate as the control objectives of the reasons is also still needs to peg the Chinese M2 reasons.