Nearly 20 trillion yuan has been printed in 1 year, and the stock market and property market have not yet recovered, why?

At the end of December 2023, China's broad money balance reached 292.27 trillion yuan, while China's broad money M2 balance in January 2023 was 273.8 trillion yuan, an increase of nearly 20 trillion yuan in one year.

Broad money includes deposits and cash from resident businesses, equivalent to all the money in the market. M2 increased by nearly 20 trillion, equivalent to 20 trillion printed last year.

But in this case, the stock market is relatively cold, A-shares fell by 3.7% last year, housing prices are adjusting, what is the reason?

First, residents have not yet recovered from the impact of the pandemic. During the epidemic, everyone focused on precautionary deposits, and when they had income, they only kept it in the bank, rarely used it to buy houses and stocks, and only used a small amount of money to buy daily necessities. In 2023, household deposits will increase by 16.67 trillion yuan, and the increase in these funds does not mean that incomes have increased, but that they have been saved, and they have reduced the activities of buying houses and stocks.

Second, the myth that housing prices only rise but do not fall has been shattered, and there has been an inflection point in population growth in the past two years, with the total population turning from increasing to decreasing, and the aging of the population intensifying. At the same time, the expectation of the introduction of real estate tax has strengthened. Now there are so many houses in the country, many of them are still in surplus, and the real estate tax will definitely usher in a wave of real estate sales, so in this case, everyone is mainly wait-and-see about the house. In the continuous decline of housing prices, everyone is also buying up rather than buying down.

Third, the United States has been raising interest rates in 2023, commodities like oil have been falling, oil prices have a great impact on domestic PPI, and now PPI growth is still negative, and the decline in PPI will definitely be a drag on CPI,

Fourth, housing prices have risen rapidly in the past few years, and the debt ratio of Chinese residents has exceeded 70%, and in the process, residents' purchasing power has been overdrawn and their purchasing power has declined.

In short, nearly 20 trillion yuan has been printed in the past 1 year, and the stock market has not yet recovered, which is caused by multiple reasons. The key to changing this situation is to boost market confidence. The property market is to further relax policies such as purchase restrictions, loan restrictions and sales restrictions, especially in first-tier cities, and the real estate tax plan should be implemented as soon as possible to give everyone a moderate expectation. In the stock market, more institutional funds should be guided into the market, and at the same time, certain restrictions should be imposed on shorting.