#精品长文创作季#
What is the most important asset for businesses and individuals, many people answer is cash flow. If a business breaks down its cash flow, it will go bankrupt in a few months, and the same person will go bankrupt if it has no cash flow.
Since cash flow is so important, does it mean that cash in hand is safe? In fact, this is not the case, because the so-called cash flow is not the kind of cash that we think of as keeping in our hands.
And with the development of the economy, a large amount of cash is an unsafe asset, so it will face economic problems such as currency depreciation and inflation, so the cash in our hands may be worthless overnight.
This year and next, people with a lot of cash in hand may have insomnia, and why?
1. What is safe cash flow?
What is cash flow? The so-called cash flow is literally understood as making cash flow, so why let cash flow move? We must first understand the time value of money.
In fact, the reason is very simple, in macroeconomics, there is such an English sentence "time is money", "time is money".
This sentence is not to make us cherish time in economics, but that time is really money, which is what we usually call the time value of money.
Just like we deposit money in a bank, we all know that the bank pays us interest on the bank deposit, and the interest we receive is the time value of the money we have, and of course this is only the most popular example.
During this time, the bank will flow this money by borrowing, which is what we call cash flow. So the so-called cash flow is not the cash that we have in our hands or in the bank.
For successful investors, their most important job is to make their money flow, whether the money stays in their hands or cannot be sustained, they will suffer huge losses.
In macroeconomics, there are three definitions of the nature of money: "liquidity, security, and profitability". These three properties are relatively contradictory, and if you want to gain liquidity and security, you must give up a certain amount of profitability.
So having a safe and sustainable cash flow is extremely important for both businesses and individuals, and with that in mind, let's discuss why people with large amounts of cash in their hands may feel uncomfortable this year and next.
Second, there is a possibility that the currency will be released in a big way
What many of us don't know is that in order to cope with the current economic situation, our country has printed a lot of money, and our M2 has reached an all-time high, which means that our money supply will increase significantly.
The so-called M2 is the total amount of cash held in our hands + bank demand deposit + bank time deposit, which are the three main components.
The massive increase in M2 means we have a lot of cash waiting to be supplied.
The definition of money in economics is that it is a special commodity that is separated from a commodity and fixed as a general equivalent, so money is still a commodity.
Since it is a commodity, it conforms to the theorem of supply and demand, that is, when the supply exceeds the demand, it will deteriorate, and when the supply is less than the demand, it will appreciate.
And a large amount of money waiting for supply will cause our demand for money to be far greater than the supply, of course, this demand for money is relative to the production of the real economy in the market, and for us personally, the demand for money is of course endless.
So once this part of the currency is released, the money in our hands will quickly become worthless, referring to the fiat currency in the Kuomintang-ruled areas back then, in fact, the money in our hands is essentially a piece of paper.
Paper money itself has no value, they are enforced by the dominance of the state, and we live in this country, we believe in the coercive power of the state, so we approve of this regulation.
During the rule of the Kuomintang, the fiat currency was affected by the state's indiscriminate issuance of currency and depreciated rapidly.
For example, in 1940, 100 fiat could buy a cow, but in 1942, 100 fiat could only buy a sheep, and in 1943, 100 fiat could buy a chicken.
In the later period of Kuomintang rule, fiat currency has become worthless, and we see in the TV series that we buy rice on the street with a flat load of fiat currency, and in some rural areas, even use the underworld currency that is more valuable than fiat currency, and even return to the era of barter.
In fact, this is the result of the Nationalist Government's indiscriminate issuance of currency. Of course, our current currency issuance is calculated on the basis of the economic development situation on the mainland, and this situation is simply not possible.
However, our current M2 is also in a slightly more state, and under the influence of this state, the cash in our hands will still be affected to a certain extent, resulting in the depreciation of the currency in our hands, etc., which needs to be paid attention to.
Third, the real estate market is sluggish
For us, we have not been able to understand why the state attaches so much importance to the real estate market, this is because the real estate market is like a huge sponge, absorbing a lot of money in our country.
So how does the real estate market absorb a lot of money, to put it simply, we keep the money in the bank, and then the real estate developer takes the land and the bank loan, and when we buy the house, we also have to take out the bank loan, so that we can make the money flow.
And when we take out a bank loan, we need to repay the high interest of the bank, so we keep the money in the bank, and the repayment period is generally relatively long, which means that the real estate market absorbs our cash flow for decades to come.
This also ensures that the money does not flow to the market, and the relative balance of cash in the market is maintained, not too much, which is the huge regulating effect of the real estate market on our country's economy.
However, in recent years, the real estate market in mainland China has been sluggish, and since 2021, our country's real estate market has been showing a downward trend in prices for many years, which has also led to serious consequences.
The first to be hit is nearly 800 industries related to the real estate market, which have started a wave of layoffs. The second is that ordinary people are more cautious about buying houses, and the funds of speculators are also kept in their hands and they are reluctant to sell.
And this money is basically deposited in the bank, and the bank has no choice but to continue to reduce the interest, once the money appears in the market through the bank or other channels, it will cause an uproar.
Think about how terrible it would be if there was a massive wave of unemployment combined with currency depreciation. This was the case in the 70s of the last century, when the economic stagflation that spread around the world.
So in the next two years, it will still be difficult for us to see that there is much room for development in the real estate market, and in this case, we need to be wary of whether there will be problems with the cash in our hands.
Economic development leads to currency depreciation
In fact, even if the above two problems do not appear, the currency in our hands will still depreciate with economic development. You can think about the 90s of the last century, many people's monthly salary was only a few hundred yuan.
Even in the early 20000 years, 10,000 yuan households were still an enviable title, and at that time, whoever was a 10,000 yuan household was definitely the richest man in the world.
But now, even if the monthly income is more than 10,000 yuan, we still feel that the money is not enough to spend, even if we have a deposit of hundreds of thousands at home, we still feel that we are not rich, and we feel very poor.
This is because with the development of the economy, the currency in our hands has depreciated unconsciously.
And now that the continent is still the largest developing country in the world, there is still a lot of room for development in our economy and urbanization.
Even in the world's largest developed countries, such as the United States, their currencies are still depreciating.
Ten years ago, the salary level of American professional basketball may have been $20 million a year was the top income, and now the salary of any top star is more than $50 million.
This is the most intuitive embodiment of currency depreciation, we can think about it, if we became a 10,000 yuan account in the 90s of the last century, we have not let the money flow, put it in the bank deposit.
Put it today, then in fact, it is really a big loss. In the 90s, 10,000 yuan might be able to buy a courtyard house in Beijing, but today you can only buy a few tenths of a square meter in Beijing, so wouldn't it be a real loss.
Moreover, in the foreseeable future, there will still be great depreciation pressure on our currency, because our economy still has huge room for development, and there is still a large gap between our country's per capita GDP and that of the United States and other developed countries in the West.
Therefore, at the same time as the economic development of our country, the currency in our hands is inevitably facing the risk of depreciation, which is why many people now think that some insurance protection products are unreliable.
Because although the insurance protection product may give us the promise that in the next 30 years, the 1 million we invested will become 10 million.
But none of us knows if the currency will depreciate like that at that time, that is, will the purchasing power of 10 million yuan in 30 years be lower than the current 1 million yuan?
Therefore, with the continuous depreciation of the currency, it will also make many friends who like to hold cash feel at a loss and do not know what to do.
epilogue
In fact, for us ordinary people, it is difficult for us to have a suitable investment path, put it in the stock market, the big A has fallen again and again, in the real estate market, the current housing prices make people have no confidence, and in the bank, the interest rate of the bank has dropped to the point that people do not want to deposit.
So it's really difficult for ordinary people now, but even so, we have to find a way to make the cash flow in our hands move, not let it stay there like a pool of stagnant water, we can take the initiative to learn a little bit of investment knowledge.
Try to minimize the risk of inflation, but we must pay attention to ensure the safety of our funds, and do not believe in some illegal fundraising scams with high interest rates, after all, for our people, the safety of funds is the first priority.