China's money supply, the world's first reflection

In the second quarter the size of China's GDP surpassed Japan to become the second, so we began to calculate the scale of China's GDP exceeded that of the U.S., conservative estimates than the United States in 2030, optimistic estimates that by 2020 more than the United States. I think that probably do not need to GDP than the U.S. 10 years, because our GDP statistics are missing a great many services to the consumer are not included in the statistical range, now that we all agree that income is substantially underestimated, then the consumer is substantially the same underestimated. Vehicle sales in China first in the world, China's tourists around the world, Chinese residents of the luxury goods (including the purchase of luxury goods from overseas) is certainly the first in the world; China's store closing after nine in the evening in general, Chinese people created in the evening The GDP is far more than the United States. However, we probably have not too much attention to a phenomenon is that our money supply M2 is the first in the world already, M2 reached 68.7 trillion in August, while the U.S. current M2 8.6 trillion, equivalent to about 58 million billion, China's M2 was more than the U.S. about 10 billion yuan. China's broad money M2 (cash plus demand deposits, fixed amount) why will unknowingly become the world's first? This is probably connected with the rapid growth of M2, the years on. Over the past 10 years, China's annual growth rate of 18% of M2, while the United States and other developed countries are single-digit growth. M2 high-speed growth and economic activity of asset size and scale of growth is relevant, but the proportion of China's M2-GDP reached 180% (assuming this year's GDP reached 38 trillion), while the U.S. only about 60%. This shows that China's M2 high growth and greater expansion of asset size relationship, for example, U.S. M2 growth rate in the last 20 years fundamental to keep pace with the growth rate of GDP, while China is much higher than the GDP growth rate, but also GDP growth rate of CPI increase more than about 6 percentage points. This is McKinnon and other economists as "the mystery of the Chinese currency", that the increase in money supply did not cause inflation; I think the mystery is that asset prices, particularly land prices, real estate prices rise sharply. China's per capita arable land area of only 1.4 acres, the average American is close to 10 acres. In the high economic growth, China has provoked the world's burden of providing consumer goods manufacturers, the small size of the coastal areas as a world factory, but also to address the rich and the workers all over the country's housing problems. As a result, land prices, house prices have soared, the government through the auction of land, also received a considerable income, and some coastal cities, government land auctions the revenue should exceed revenue, the amount of China's land transactions, property transactions are is the first, which led a sharp rise in M2. This situation also in the relatively sparsely populated land industrial countries took place in Japan and South Korea, Japan and South Korea's per capita arable land area of less than 1 mu. Such as Japan, South Korea's rapid economic growth period in the average annual growth rate was 20% (1967-1973 years) and 34% (1966-1988 years), significantly higher than China's current level, so now, Japan and South Korea M2 is also a relatively high proportion of GDP, respectively 159% and 147%. However, a worrying problem is that Japan and South Korea has been a rapid growth of M2, they are into the global circle of rich countries, while China's per capita GDP ranks only 100 countries in the world, the wealth of the long distances, Money has been the scale is the first of the, M2/GDP than Japan and South Korea also. Although M2 which led to too large foreign exchange factors, but calculations, about 2.4 trillion U.S. dollars of foreign exchange reserves to 27% of the M2, not too much. In China, government control of the growth rate of M2 has always been a goal of 17%, if the growth rate here is 10 years later, M2's size will reach 340 trillion. Even to 15% growth, will reach 285 trillion, which pretty terrible. But this is not impossible, such as South Korea from 1966 to 1988 period of rapid economic growth, the average annual growth rate of M2 has reached 34%. China's economy is still great potential in the development stage of urbanization level is only about 60 years in Japan, the economy and then maintain an average annual growth of 8% of the decade seems to be no problem. However, people in Japan and South Korea into the economic level of developed countries, M2/GDP only 100%, while China has not yet rich, M2/GDP it has reached 180%, and do the same growth rate continues, then, the world's currencies will be overwhelmed by the RMB. . . . . . Whether fewer people and more economically developed areas, many of the scarcity of assets will have to fly overhead fired it? For example, before the real estate bubble burst in Japan, a Tokyo can change half the United States. While China's real estate over the past 10 years has risen more than 5 times the total market value of urban and rural residential near the 100 trillion, accounting for the proportion of GDP is about 290%, while the U.S. currently only about 200%. We look at the past decade antiques, art, jewelry and other gains, is almost 10 times higher. So, in this territory, what scarce, what are small varieties, and what can be speculation, including the garlic and ginger. Baotou Steel Rare Earth is a publicly traded company, early last year, the price is about 7.5 yuan, the highest fired some time ago to 77 yuan, more than a year prices have gone up by 10 times! Because too much money, money in the search for scarce assets, and even money itself can also be speculation, said 1980 version of the face value of RMB 50 yuan, the current market price pushed up to 5,000 yuan, 100 times the rate of return, indicating existence Far better to bank the cash pressure bottom, the weight of the longer value. However, eventually the bubble to burst,christian louboutin heels M2 is the result of the expansion of the widening gap between rich and poor, the rich get rich by selling to buy a house in the proportion in M2 growing, and to raise money in the bank in order the wealth of ordinary people in the proportion of M2 is getting lower and lower. Thus, the Government has become increasingly concerned about the gap between rich and poor, and promised to do to improve, which also caused some panic in the rich, so, we found more and more people go to overseas migration, to buy overseas real estate. Thus raised a question: If the RMB freely convertible once, two-way opening up the capital market, then what of the residents are more willing to hold the yuan,Christian Louboutin Pumps or more willing to hold dollars? Currently, we are immersed in the expected appreciation of the renminbi, but the fact is that a 130 square meters in Shanghai apartments, you can change the state of New York, New Jersey, near the villa. If the M2 and then expanded to the United States I am afraid people will buy more and more. We can see that M2 growth rate was over 30% of South Korea in 97 years Asian financial crisis, sharp currency depreciation in 08 years in the U.S. subprime mortgage crisis, the Korean won has depreciated significantly. Therefore, I am worried about is that China has such a large scale M2, and will continue to go on the case of large future depreciation of the renminbi will be under tremendous risk