Equip China wants China to equip, economic China wants Chinese economy! Face the reality and peek into the economic puzzle! What is giving birth to and interpreting the vicissitudes of the world economy! Great historical changes, how to play the card of economic development?
Author: #Shi Xingming#Entrepreneur##Consumption##Deflation#Inflation##Economy##股市分析#
Economic reference news - "Sister Lin View the World"
Consumption power is still sluggish, the economy expands, and the stock market can rise!
The important economic data in September came out, the conclusion is very obvious, this year has passed 3/4, the overall market consumption level has not improved, CPI inflation index in September flat year-on-year, up 0.2% month-on-month, which is down 0.1% from the previous month, especially pork prices fell 22%, vegetable prices fell 6.4%, and PPI industrial products factory prices in September also fell 2.5% year-on-year.
Screenshot of Sister Lin's view of the world video
You may have a very intuitive feeling that the price of goods is falling, isn't this a good thing? I can buy more products for the same money, isn't it getting better and better? You may have such good feelings for a short period of time, but the entire economy is an interlocking system, and one day this price reduction effect will be transmitted to you.
Let's see, why are the ex-factory prices of industrial products falling? Perhaps it is facing insufficient consumption power in the market, product supply exceeds demand, there is price competition, as the income of the enterprise decreases, its profits decrease, and then it will reduce investment, and it will also find ways to reduce costs, which means that it will reduce labor, will reduce workers' wages, workers' incomes will decrease, and their consumption will also decrease.
In the same way, the income of selling meat and vegetables will also decrease, and at the same time their expenses will decrease, of course, they will also reduce their inputs, which will have a knock-on effect, your income will also be affected, your consumption will be reduced, which is a cycle of contraction in the entire economy that we very much do not want to see.
Screenshot of Sister Lin's video watching the world
We prefer to see a good upward trend between PPI and CPI, of course, this upward trend has a reasonable range, such as CPI rally between 2%-3%, relatively reasonable, if higher, it will form inflation, bring other economic problems. Overall, consumption is very low, the central bank announced that the first three quarters of RMB deposits increased by 22.48 trillion, it can be seen that the willingness to save is very strong, and the willingness to consume is relatively insufficient.
Foreword
The emergence of "deflation" is the opposite of "inflation". Everyone knows that "inflation" means that there is more money in circulation, and in the economy, prices have risen. "Deflation" is the opposite of "inflation", which means that there is less money in circulation, and the economic performance is that prices are falling and consumption power is declining.
The money has already been printed, and if the bank's reserves are not added, then how can the circulation of money be reduced? The most basic situation is that everyone has money in the bank and does not spend it! The less money is spent, the more overproduction becomes, and the more merchants compete to cut prices in order to sell things. The cheaper things are, the more the money appreciates, and the more people who have money are less willing to spend it.
At this time, in terms of economic management, from the perspective of monetary policy, the usual practice is to cut interest rates, in order to force everyone to spend money. If the rate is cut, everyone will not spend money. So what's the problem? This is the most difficult problem we have at the moment.
In this case, there are two possibilities: one is that everything that should be bought has been bought, and there is no idea anymore; Second, although there are still ideas, there are no scenes. The former mostly refers to the consumption of physical goods, while the latter refers to the consumption of non-physical goods.
We are now faced with a situation of both. On the one hand, there is a lack of new physical products, and the lack of new physical products to consume, mostly due to the stagnation of technological innovation; On the other hand, there is the lack of new non-physical products, such as various service products are non-physical products; Then this situation is mostly because there is no new non-physical product can appear.
Solving these two types of problems requires a new round of innovation and development. The key point now is that such a new round of innovation and development has not been formed, the impulse to innovate and the desire to open up have not been stimulated, and the phenomenon of lying flat is widespread.
To solve this problem in the mainland, the role of local governments is very important, and the attitude of the entrepreneurial class is also very important! The next step is to see how these two aspects interact!
Thanks, part of the pictures are from the Internet!