But since the second half of last year, with the soaring oil price, the inflation monster has come back with its jaws open. Probably the most famous sign is that one day the second brother proudly boasted to the eldest brother that the goblin had stopped eating Master and his meat was more expensive. So, big brother, go back to Huaguoshan.
Followed by daily necessities, agricultural products began to rise sharply, especially rice. Some people began to hoard rice, and the rice in supermarkets and Costaco was once out of stock and had to be supplied in limited quantities. It's just that this is not an effective way to fight inflation. Suppose a bag of rice costs 50 dollars, and you buy 10 bags, the garage at home will be a little crowded. One hundred bags is probably the limit that can be stored. That's only five thousand dollars. Even if you save all this money, how much can you save? What's more, there are losses such as mildew and moth-eaten. This is obviously not a good method.
When people think of inflation, it is a natural desire for the government to implement price control. Old capitalist countries, including the United States, including * * * who has always loved the market economy and Nixon, the party chairman, have also done stupid things in price control: that is, the government controlled the oil price at 197 1. The result of this is to add fuel to the fire: on the one hand, due to price control, the profits of manufacturers are not regulated by the market. Artificially low oil prices make producers reluctant to increase production capacity or develop new oil fields. On the other hand, artificially low oil prices make people have no desire to control consumption. The supply is in short supply, and the government's control of oil prices has further aggravated this imbalance between supply and demand. Since 1970, US crude oil imports have doubled at that time.
So what else can people do to deal with inflation? Let's see (Forbes, May 2008, page 37, "Fighting inflation"):
Zimbabwe: The government blamed bullies, smugglers and other illegal businessmen for the inflation rate of 65,438+000,000% and the unemployment rate of 80%, and cracked down severely. No one is allowed to "illegally" exchange foreign exchange, and offenders will be imprisoned. All businessmen must deposit cash in the bank every day. As a result, the government's iron fist only works for ordinary people. Inflation does not buy this account, and prices will rise if they rise.
Iran: When the Minister of Economy admitted that there was nothing he could do about 18% inflation, the President immediately released him.
India: For 7% inflation, the Indian government has found a very creative solution: canceling the futures trading of some grains. They are also prepared to take the same measures for steel products that are in short supply and threaten to implement price control.
. . .
These remedies are not important just to really control inflation. If we really want to control inflation, we must treat the symptoms and start from the root. The reason for inflation is simple: supply and demand are out of balance, and demand exceeds supply. To get a radical cure, we should start from these two aspects: either increase supply or reduce demand. But it is easier said than done: to increase supply, prices must be allowed to rise for a certain period of time until manufacturers feel profitable, thus expanding production scale. It is impossible for manufacturers to really increase supply because they are artificially required to be included in mass production at low prices.
To reduce demand, it is necessary to reduce the amount of money or raise interest rates. But when inflation occurs frequently, the economy may face recession. The economic situation after the American subprime mortgage crisis is a classic example. The Fed is really the lesser of two evils, biting its teeth and cutting interest rates.
If you can't beat them, join them (if you can't beat them, join them): Let your money go up with the price of oil and rice!
In 2009, the anti-crisis policies of major global economies were essentially Keynesian demand management policies, and China was no exception. After the introduction of the 4 trillion fiscal stimulus plan, the problems that China encountered in 20 10, such as asset price bubble, economic overheating tendency and rising price level, were actually related to the application of traditional policy means of demand management. In any economy, as long as the total demand expands too fast in a period of time, the problem of uncoordinated follow-up speed will appear at the level of total supply, first of all, in the shortcomings of the national economy. China's experience for many years is that when the growth of total demand accelerates, energy transportation will first become a bottleneck. After the launch of this round of economic stimulus plan, there will be a shortage of electricity supply in 20 10 years, a sharp rise in coal prices, especially coal prices, and a shortage of railway transport capacity. The sharp rise in house prices and vegetable prices will be related to the expansion of the national economy such as energy transportation.
House prices and prices have gone up for many years. Even the high housing prices in the past two or three years have no inherent law that the bubble has been rising. Although the new policies to curb the real estate bubble have been introduced twice in recent years, in this context, real estate developers and local governments still show their determination to fight against the central government. But the central government still has policy bullets, such as the deadly property tax and some effective policies aimed at improving supply. Once these policy bullets are launched, I believe that they will be the first and second in the country.
The main driving factor of prices in China for many years is the price of vegetables. The price of 20 10 vegetables has increased greatly, which has both long-term and short-term factors. A by-product of China's urbanization process is that a large number of suburbs are merged into cities, which has turned hundreds of thousands of supply bases with vegetables as the main products into high-rise cities. In addition, more than 1000 million farmers flood into cities to seek employment every year. Therefore, the number of people growing vegetables in the production base has increased blindly, and the first-and second-tier cities are getting farther and farther away from the vegetable production base. In addition, the supply channel between vegetables and demand cities is artificially blocked by factors such as rising fuel prices and arbitrary charges and fines on expressways, and the circulation cost is increasing. In 20 10, natural disasters occurred frequently in various parts of China, and the demand for vegetables in Korea, Japan and other countries surged, which can be regarded as a short-term driving factor for the increase in vegetable prices.
Faced with these two factors, we should study the solutions with a peaceful mind. For the long-term factors, we should take some institutional countermeasures, and for the short-term factors, we should take some operational countermeasures to solve them. The purpose of solving inflation is to satisfy the people. People are divided into cities and rural areas. The price of agricultural products has risen, urban people have complained, and farmers have applauded; When prices fall, city people will smile and farmers will complain. Therefore, when dealing with the rising prices of agricultural products and vegetables, it is not appropriate to take simple policy measures that only consider the interests of one party and not the interests of the other. Personally, I think we should be tolerant of the rising prices of agricultural products, so as to mobilize the enthusiasm of farmers to the maximum extent under the small-scale peasant system like China. Of course, at the beginning of 20 10 in China, the prices of agricultural products generally rose, but farmers got too little benefit (only about 10%), and most of the benefits were taken away by practitioners in the circulation field, including speculators. This abnormal situation must be corrected.
If the price of agricultural products rises sharply, it should be a good thing that most of the benefits of the price increase are obtained by the peasant brothers. Isn't it always said that cities feed back the countryside? Feeding back with market mechanism is more powerful than shouting 1000 slogans. Then, how to ensure that most of the proceeds from the price increase of agricultural products can be obtained by farmers? I think the easiest way is to build more farmers' markets and let farmers become direct sellers of their products. If the transportation of agricultural products takes the green channel, farmers will be free of booth fees at the farmers' market. After a sufficient number of farmers' markets are established in major cities across the country, vegetable prices in large and medium-sized cities will drop sharply in less than the first half of the year. I have had an empirical investigation myself: the price of vegetables in the Sihaiqiao farmers' market near me is more than 50% cheaper than that of Hanlinfu supermarket, and much cheaper than that of large supermarkets such as Lotus in Yichu. Therefore, the measures to control the prices of vegetables, agricultural products and other commodities that have contributed greatly to China's CPI are extremely simple: as long as about 200 farmers' markets are built in each city of Beijing, Shanghai, Tianjin, Chongqing and other big cities, so that farmers can become the main force of direct sales, it is not difficult to curb CPI. By expanding the proportion of farmers' direct sales to stimulate supply, the supply will increase substantially and the price will decrease. In the end, city people will be very satisfied. When the government controls the price, farmers will benefit first, then the supply of agricultural products such as vegetables will increase, and after the price drops, urban people will benefit indirectly.
20 1 1, and the expected inflation control target of decision-makers is 4%, which is a low-middle level inflation rate in emerging market economies. Data show that in 20 10, the inflation rate in Brazil was about 5.9%, that in Russia was about 8.8%, that in India was 8.58%, and that in Vietnam was 1 1.75%. The inflation rate of these four emerging market countries with rapid economic growth is obviously higher than that of China. Therefore, on the one hand, we should take measures to deal with the threat of domestic inflation, on the other hand, we should have broad vision and wise policy ideas to avoid two extreme tendencies: first, we should avoid over-reliance on administrative means. In the price control of agricultural products, we must resolutely crack down on hoarding, speculation, price gouging and market disruption, but we cannot set price control lines for vegetables and some agricultural products. Once the price is controlled, it will not stimulate farmers' enthusiasm for production and will eventually affect supply; Second, the phenomenon of "everyone is profound" appears as soon as inflation rises. Misguided by some so-called experts and scholars, the public inappropriately accused the central bank of excessive currency, which eventually brought undue pressure to the formulation and adjustment of normal monetary policy.
Under the pressure of public opinion, there is indeed a tendency of improper policy choice in China at present. This possible policy deviation is from extreme easing in 2009 to excessive tightening of 20 1 1. Although our monetary policy is known as "prudent", there are probably some problems in actual operation, such as too strict management of credit indicators, excessive use of tightening policy tools, and excessive supervision.
Different from people from all walks of life who say that there is excess liquidity and excess liquidity, according to my observation, after the central bank raised the deposit reserve ratio for six times in a row, the funds of China's commercial banking system have been quite tight. In 2009, the excess reserve ratio of commercial banks remained at 3.2%, but by the second half of 20 10, the excess reserve ratio controlled by many commercial banks was as low as10.5%, which means that the central bank may use the deposit reserve ratio as a usual quantitative tool to implement the austerity policy. At present, the one-year interest rate in the interbank market has reached about 5.7%, which shows that the overall funds of the commercial banking system are already tight.
I really appreciate the differential deposit reserve ratio policy of the central bank. In order to carry out macro-control on such a huge economy as China, we must adopt differentiated monetary policies according to different situations. For example, when inflation is the enemy, a deduction coefficient should be given to loans from commercial banks to support agricultural products, especially those related industries that are conducive to increasing the supply of agricultural and sideline products. As long as the staff of the central bank and banking supervision departments work hard, our macro-tightening policy, which focuses on regulating supply rather than simple and indiscriminate, will surely succeed.
As for the external input of inflation, I don't think this is a problem worthy of attention. With China's economic integration into globalization, international inflationary pressure is inevitable for any country. There is also a magic weapon in our policy tool basket that we have been reluctant to use-exchange rate. As long as we use this tool boldly and allow the RMB to appreciate sharply, the negative impact of externally imported inflation will be offset to a great extent.