The long-awaited reserve requirement ratio cut and interest rate cuts have finally been fulfilled, but from the actual effect, it has not met everyone's expectations. This can be seen from the decline of more than 90% of the stock market and the continued decline in loan enthusiasm. Some people say that the liquidity released this time is too small, with only 0.25% of more than 500 billion yuan of funds, which is not enough to meet the development needs of the real economy, but I don't think so.
Reservoir reserve requirement cut
First of all, there is no lack of liquidity in the market now, what is lacking is confidence in the future. It is not that bank financial institutions have no money, but that many people no longer want to raise funds from banks to to buy houses and start a business. Out of pessimism about the future, they have begun to become cautious. From the perspective of the bank, I am very anxious to lend money to everyone now. I don’t know if others have such an experience. I have a deep understanding of it. The number of active loan calls received by the bank this year has increased significantly. My friends around me also often receive loan calls from the bank, but most people don’t want to take out loans.
Loan
Therefore, the liquidity released by this reduction in the reserve requirement ratio is more of an emotional comfort. The purpose is to tell everyone that banks are not short of money, and the central bank is not short of money, and will use monetary tools to support the real economy when necessary. There is no shortage of money in the existing financial system. The problem is not to release more funds, but to truly lend out the released funds, and ultimately achieve a rapid circulation in the entire economy and society, because only when the money is circulated can most people increase their income, thereby ultimately driving the development of the economy. If the funds cannot be effectively circulated, then how much funds are released will not be of much use, because everyone dare not use them.
pessimistic expectations
Secondly, the economy in some areas may be in depression. What kind of depression will happen? It is not convenient to say more here, but we can draw some points worth referring to from the results caused by the depression that Japan has experienced in the past.
First, the unemployment rate has risen sharply, finding a job has become difficult and employment opportunities have decreased. This is the first thing that happened during the depression. The depression in economics can be described in a simple and rough way, that is, the goods produced by oneself cannot afford, which leads to the continuous rise in the unemployment rate. After the Japanese economic miracle that year, the subsequent sharp appreciation of the yen caused a long depression. Before the depression, Japan's employment population was about 35 million. After the depression, the employment population dropped to about 33 million. At the same time, the wage levels of most jobs stopped increasing. Is this similar to some areas of ours?
Job opportunities
Second, house prices fell sharply, and some regions even fell for a long time. I personally understand this slightly differently from some people. After the Japanese economic miracle was shattered, housing prices also ushered in an epic decline, with housing prices falling in some areas as high as 90%. Although housing prices in most areas are also beginning to fall and transaction volumes have deteriorated, the decline in our housing prices is essentially different from the bursting of Japan's real estate bubble that year. This argument can be concluded from Huang Qifan's related speech.
House price
Japan's house prices were purely due to over-issuance of currency. Objectively speaking, Japan did not build so many houses at that time, but there was too much money in society, which pushed the prices of houses and stocks equity assets to an undeserved position. Therefore, when the appreciation of the yen leads to liquidity recovery, the house prices will inevitably return to their original price. Although our housing prices also have a certain bubble, we have built a large number of houses. The total number of houses in the past 30 years has increased by more than 10 times. Our houses can carry more money, so even if they fall, they will not plummet.
Depression
Third, the economic depression will neither eliminate the rich nor the poor, but will eliminate the so-called middle-class classes in large quantities.Since the reform and opening up of , there has not been a real depression in our country since reform and opening up , but it has happened in the United States, Japan, and Europe. Judging from the situation in Japan back then, when the depression occurs, the rich will become richer because of the financial advantages in their hands, and the poor will have nothing in their hands, so there is no big change. The middle class, who owns mortgages, car loans, and barely maintains the quality of life in most cases, suffers the most, because the economic decline has led to a decrease in income and job opportunities. In the end, they cannot afford to pay back the relevant loans, and the wealth they have half obtained will be gradually harvested.
interest rate
Finally, there may be two factors that are considered when the interest rate is not reduced but the reserve requirement ratio is reduced, namely the marginal decreasing utility of exchange rate and interest rate cuts. It is now in the stage of Federal Reserve hike rate . Capital around the world is concentrating in the United States. If the interest rate cut causes the exchange rate to decline, it will stimulate capital outflows. In addition, lowering interest rates and releasing water is not omnipotent. Any policy will not have any effect if it is used too much. It is like taking medicine to produce antibodies. For example, Japan's interest rates have almost dropped to 0, and it still cannot drive the economy.
