To Control Monetary Policy And Interest Rate Market Will Have A Way Out.

If the central bank pursues the core concept of "financial services for the real economy", please immediately control the interest rate of monetary policy and do not let it continue to rise, because China's debt capital related to the real economy is about 160 trillion yuan, and the increase in interest rate by 1 percentage points will mean a financial cost or profit loss of 1 trillion and 600 billion yuan.

You know, China's real economy has already been unable to afford such consumption.

According to the 10 times price earnings ratio, the profit loss of the 1 trillion and 600 billion yuan enterprises will correspond to the market value of the stock market, which will reach 16 trillion yuan.

In the future, the United States will probably use the interest rate space of "zero interest rates to normal low interest rates" to push up the value of the US currency and entice global financial capital to the United States. At the same time, it will lower the cost of manufacturing and attract global industrial capital to the United States with "normal low interest rates + tax cuts".

Perhaps, at present, we should guide interest rates to rise and stabilize the renminbi.

Closely related.

But I want to ask, what is the purpose of stabilizing the RMB exchange rate? Is it stable and stable? Or is it for China's economic stability? If it is the latter, then do not let money market interest rates rise too long. Otherwise, the Chinese economy will not only be unstable, but will also pay an unbearable price, especially for the already fragile economic entity.

By raising interest rates and stabilizing the exchange rate, does it not mean that China can subsidize "hot money" or financial capital with the profits of the real economy? This is obviously the "real economy for financial services" right? Therefore, the central bank should not be allowed to do so.

The depreciation of the renminbi means capital escapes.

Is that right? In theory, this is wrong.

Because capital has different attributes, and different attributes of capital have different preferences.

From a macro perspective, we should at least divide capital into industrial capital and financial capital.

Facing the devaluation environment, the feeling of these two kinds of capital should be the opposite.

Financial capital favours the environment of increasing interest rates and currency appreciation, because this environment provides good arbitrage opportunities, but on the contrary, industrial capital favours the environment of low interest rate and currency depreciation, because such environment provides low financial cost.

Therefore, if we look at it from a financial point of view, the depreciation of the RMB will only lead to the outflow of financial speculative capital, while industrial capital will prefer to stay in China.

Some people will say that in the process of RMB devaluation, not many Chad businessmen are going to invest in the US?

But from the financial point of view, the reason why Cao Dewang and other industrial capital outflow is the result of the continuous appreciation of RMB in the past many years, not the current financial reason.

The same is true. Cao Dewang was a few years ago about what was in the United States, but it is only now being "fried". The purpose is to make the Chinese people make a wrong judgment, saying that "Cao Dewang is running away because of the depreciation of the renminbi" and incited the unknown people to "exchange foreign currencies", so that China's foreign exchange reserves fell into the sea of the "people's war" and increased the probability of China's financial crisis.

Therefore, we must not be fooled.

The reason why the United States can achieve this goal is the fact that the hegemony of the US dollar and the strength of the US financial strength exist.

So we have to make painful choices, or raise interest rates to retain financial capital, so that the stock market and

Bear heavy losses, or lower interest rates, while preserving the real economy while tolerating financial capital escaping and devaluation of the renminbi.

In my view, the central bank may now adopt a compromise plan, but I think it is not appropriate.

Because the compromise plan is likely to lead to the end of the day.

Therefore, I appreciate the practice of Europe and Japan, and strive to maintain the financial environment of real economy with loose money or even negative interest rates, and then use "non market means" to curb financial capital escaping.

Of course, China does not need a "quarterly loose monetary policy", but at least it should not allow interest rates to rise, or at least not to tighten the currency, and the appropriate approach should be "neutral slightly relaxed".

I believe that, as long as we are willing, if we are not subject to the "market fundamentalist ideology", we will manage China.

Cross border flows will have a "feasible and effective plan".

I am afraid that I will not dare to strengthen supervision because of adhering to the market, and the result is "big mouth on both sides".

In fact, there are many lessons learned in China.

Now, we need the central government to make up our minds not to wait until things are changed.

To protect the real economy of China and achieve the tactical goal of deleveraging, it is necessary to keep the Chinese stock market active.

Therefore, the central bank should not only have the exchange rate, but also the stock market.

It can be said with certainty that whether China's economy can overcome the difficulties and whether it can really realize the national policy of "revitalizing the real economy" is closely related to the correct choice of monetary policy at present and in the future.

Therefore, we urge the central bank not to always consider financial problems from a financial point of view, but to think more about the financial problems from the standpoint of the real economy.

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