The United States and Japan accused the Chinese government of interfering in foreign exchange freedom and demanded that China implement a floating exchange rate and liberalize capital controls. China, on the other hand, firmly or tactfully refuses. To clarify this issue, we must first start with gold. As we all know, the first currencies of human beings were gold and silver. Because gold and silver are not easy to deteriorate, the output is not very large, and they are easy to cut, they have become symbols of wealth accepted by all countries. At that time, European colonialists were fanatically obsessed with gold, and their main purpose of searching for the New World was to find gold. When many later documents talked about this period of history, most of them accused capitalism of blatantly plundering wealth and carrying out the sinful nature of primitive accumulation of capital. In fact, if Europe at that time was regarded as a relatively isolated whole, that is to say, if the plundered gold was mainly used within Europe, then these golds were not primitive capital accumulation for Europe, but rather It's just equivalent to monetary expansion. Simply put, the increase in gold in Europe is just like the printing of more money today. Mild gold expansion can stimulate the economy, while excessive gold expansion will only drive the economy crazy.
Of course, if the total amount of gold does not increase, just like today's central bank stops issuing banknotes, the economy will stagnate and slump due to lack of sufficient currency. Gold, by its texture, is very suitable as money. But it doesn't have all the requirements of a currency. This is reflected in its supply. The supply of gold is determined by nature, sometimes more and sometimes less. The development of the national economy often requires a stable money supply. Especially when the world economy develops to a certain amount, gold will no longer be able to keep up with the economic growth, and become a restrictive factor of the economy.
During the evolution of money, paper money began to appear. The first banknotes were IOUs. Yinzhuang (equivalent to today's private banks) issued banknotes, and people holding banknotes could exchange them for silver or gold at various branches of Yinzhuang. Since the banknotes issued may be exchanged for gold or silver at any time, each bank must only dare to issue banknotes when it has the same amount of gold or silver. This is what you often hear: the issuance of banknotes should be based on reserves such as gold and foreign exchange. Of course, this statement reflects the reality of the time. Some economics students still use this sentence to explain today's monetary policy, which is nonsense.
In the process of issuing banknotes in Yinzhuang, I found that I could issue more banknotes than gold or silver? Because banknotes cannot be exchanged for gold immediately. Especially for those big silver villages, because of their good reputation, their banknotes can even be bought directly like gold and silver, and people don't care whether they have to be exchanged for gold or silver. In this way, the banknotes issued by Yinzhuang far exceeded its gold and silver possessions. This is the beginning of reputation currency. It means that money can be printed out of thin air. But both past and present, this expansion has been accomplished by credit. Therefore, many economists insist that even if money can be created out of thin air, it can only be expanded by means of credit. This statement has no theoretical basis at all. I can predict that if the monetary and fiscal policies are to be reformed, it will first make a breakthrough in the traditional theory of currency issuance.
Since the banknotes issued by the bank can exceed the wealth it actually owns, as long as there is no run, it actually occupies the excess wealth. This is similar to the currency tax on banknotes issued by modern countries. At the same time, banknotes are issued by private individuals, which is also not conducive to the country's macroeconomic regulation and control. Therefore, during the evolution of currency, the country began to concentrate on issuing banknotes. The country issued banknotes initially based on gold, that is, how much gold the country had to issue banknotes, and banknotes could be freely exchanged for gold. But later, with the development of the economy, the demand for total currency increased, and gold began to be in short supply. The country had to issue excessive banknotes in addition to its gold reserves. At this point the gold standard collapsed. Later, gold became an important means of payment internationally, and the country felt that it was necessary to control it by itself, so the country began to terminate the free convertibility of banknotes and gold, and used limited gold for state control. In this way, it entered the era of complete credit currency, and gold, as a domestic means of payment, withdrew from the field of circulation. The state issues banknotes entirely according to its own needs, and obtains huge profits from issuing banknotes. Because what they pay is paper, but what they print is money.
Based on the same principle, the international foreign exchange market is also on the same evolutionary path.
After World War II, countries handed over gold to the U.S. central bank, and the U.S. put in U.S. dollars in a certain proportion to gold. All countries accept the U.S. dollar as the world currency. This process is relatively fair, because the United States must issue dollars in strict accordance with its gold reserves, and countries can freely extract American gold with dollars, so there is no theory of exploiting the wealth of other countries. But soon, due to the rapid development of the world economy, not to mention the gold reserves of the United States, the total gold output of the world cannot keep up with the economic development. The United States has to start Print dollars in excess of gold reserves. When talking about this period of history, we need to correct a mistake, that is, the United States printed a large number of dollars to solve its foreign exchange deficit, which is not necessarily caused by the recession of the US economy. Even if the U.S. economy does not decline, the development of the world economy will prompt it to issue U.S. dollars in addition to its gold reserves. In particular, the faster the US's own economy develops, the more it needs to print more US dollars. If the U.S. economy is in surplus for a long time, the U.S. dollar cannot be sent to the world, and it cannot become the world currency.
Since the total amount of U.S. dollars issued far exceeds the U.S. gold reserves, the U.S. dollar can no longer maintain the previous ratio relative to gold, and the U.S. dollar has to depreciate. At this time, the world set off an upsurge of selling U.S. dollars and extracting gold. If left unchecked, the U.S. central bank’s gold may be exhausted, so the U.S. government announced that it would stop the exchange of U.S. dollars and gold, and the U.S. dollar would be decoupled from gold. This is the downfall of the Bretton Woods system.
The collapse of the Bretton Woods system was not caused by any country's economic recession, but an inevitable historical trend of world economic development.
Although the Bretton Woods system collapsed, the U.S. dollar remains unshakable as a world currency by virtue of its historical practice and strong economic strength. And at this time, the hegemony of the U.S. dollar began to emerge, and the U.S. dollar began to exist as an important means for the United States to grab the wealth of other countries.
Some people say that the United States is similar to the central bank of the world at this time. The U.S. dollar issued by the United States has become a credit-based currency. It can print dollars out of thin air and use them to buy physical wealth produced in other countries. In other words, the United States can exchange blank paper for raw materials and other physical products from other countries. Some people will say that when the United States buys products from other countries with dollars, other countries also get dollars, and other countries can use dollars to buy American products in turn. Therefore, there is no question of whether the United States is hegemony or not. This question involves two aspects. One aspect is closely related to the current depreciation of the US dollar, which I will elaborate on later. Here I talk about the first aspect of it, which is the currency tax issue of the US dollar.
Although countries with US dollars can purchase products from the United States, making the exchange with the United States an equivalent exchange, on the one hand it is an important means of foreign exchange reserves for various countries, and as the economy grows, the reserves will gradually increase; on the other hand As the world currency, the U.S. dollar must circulate in other countries in the world, and the faster the world economy develops, the faster the total circulation in each country will grow. Therefore, from a local point of view, there are continuous outflows or inflows of dollars into the United States, but on the whole, the United States still exports dollars outward and imports physical wealth inward. This is the real reason why everyone sees that it is often the US deficit. The U.S. dollar, which has been stagnant outside the United States for a long time, is the currency tax collected by the United States from various countries. With the privilege of currency tax, the United States directly plunders the wealth of other countries without compensation. Therefore, when you see that the United States provides assistance to other countries in the world, you should know that it may only return part of the wealth looted from these countries. At the same time, when you see the U.S. deficit, and the U.S. desperately blames other countries for causing its deficit, don’t easily come to the conclusion that the U.S. is really at a disadvantage.
Indeed, if the U.S. exports too many U.S. dollars, if these exported U.S. dollars are used to buy U.S. products, it will undoubtedly be a loss of wealth for the U.S., and it will receive less currency taxes. Therefore, the United States has taken another measure: depreciation. I personally believe that maintaining a stable U.S. dollar for a certain period of time, then depreciating, maintaining stability for a certain period of time, and then depreciating is a long-term established strategy of the United States rather than a sudden crisis. When other countries have stored too much U.S. dollar reserves, for example, countries like China have accumulated more than 300 billion U.S. dollars in foreign exchange reserves without eating or drinking, and the U.S. began to consider depreciation. The U.S. currency depreciation is mainly accomplished by lowering interest rates, expanding fiscal expenditures, and central bank intervention. Through these measures, the supply of U.S. dollars has increased and the U.S. dollar has depreciated. The reduction of interest rates and the expansion of fiscal expenditure in the United States will also have an impact on the domestic economy, for example, the economy may be overheated. But for the domestic economy, although I am not sure whether it is intentional or not very familiar with economic operation, in short, when it implements the devaluation of the dollar, it strictly controls domestic demand, that is to say, through the imbalance between supply and demand, making the U.S. interest rates have been lowered, the U.S. dollar has depreciated, and the U.S. economy is not overheating. I have already stated that it is not ruled out that the United States is not yet familiar with the economy, which leads to the imbalance between supply and demand. However, if it was me, and if I had a better understanding of the economy, it is not ruled out that some similar measures should not be taken. In particular, the United States has just finished a war, which also creates favorable conditions for depreciation.
If the U.S. dollar depreciates by 10%, China’s foreign exchange reserves will suffer an abrupt loss of 30-35 billion U.S. dollars. Put it in the world, how much will countries lose? How much will the United States plunder?
Of course, although the United States allows a certain deficit, but the deficit is too large, and the impact on it is also unfavorable. On the one hand, the United States reduced its deficit through depreciation. On the other hand, especially under the Bush administration, welfare was weakened, the economy shrank, and unemployment increased. Therefore, increasing the demand for export and foreign trade has become the focus of stimulating the economy. Most of the products exported by the United States are high-tech products with high added value. No matter how many exports there are, it will have little impact on the reduction of physical wealth in the United States. Therefore, increasing exports and using the wealth obtained from exports to import low-value-added physical wealth is also the focus of the US economy. The depreciation of the US dollar has reduced its export price and increased exports.
As far as the United States and China are concerned, the depreciation of the US dollar and the appreciation of the renminbi will have an impact on future imports and exports. The most ruthless move is yet to come.
The United States and Japan have accused the Chinese government of interfering in foreign exchange markets. There are two main requirements, one is that the renminbi should appreciate, and the other is that capital market controls should be liberalized, that is to say, capital can be freely convertible. These two requirements are enough to cause fatal damage to the Chinese economy.
A currency can be devalued in various ways. For example, in the United States, it is achieved through domestic economic policy measures such as adjusting the US dollar interest rate. However, if this method is not used properly, it will often hurt one thousand people and self-injury eight hundred, because these domestic economic policies not only affect the foreign exchange market, but also threaten the domestic economy of the country. Frankly speaking, this is also caused by the flaws in Western economic theory itself. However, China adopts another method, which is to directly buy and sell through the central bank to ensure the exchange rate of RMB in the foreign exchange market. At the same time, China also adopts capital controls, and capital cannot freely enter and exit the Chinese market. Therefore, China can intervene in the foreign exchange market while relatively shielding its own economy. But in any case, whether the currency depreciates is mostly determined by government policy. No matter whether it is the United States or Japan, the depreciation of its currency is the result of government intervention, not the market and freedom they keep talking about. Some officials in Japan said that although the interest rate is determined by the government, the statement that the exchange rate should be determined by the market is simply ridiculous, which is typical discourse hegemony. They are all interventions, and they all lead to currency depreciation. Is your intervention the market economy, and mine is government intervention? To be honest, the current foreign exchange system in the West has many flaws. Is it possible to make up for these flaws? , not making the same mistake as you is government interference?
Their real purpose, apart from the above, lies in a more insidious measure.
At the time or before they asked for the appreciation of the renminbi, financial speculators in the United States or Japan began to secretly flow a large amount of funds into China. This inflow would be easier if China's capital markets were opened up. After the funds flow into China, they are converted into RMB and wait for the RMB to appreciate. After the appreciation of the renminbi, these financial predators began to sell renminbi and buy dollars. It is impossible for the People's Bank of China to sell RMB to buy US dollars. If so, the exchange rate of RMB will fall. In order to maintain the RMB exchange rate, the People's Bank of China must buy RMB and sell foreign exchange reserves such as US dollars. Originally, the reason why China’s renminbi appears to be appreciating is because China’s economy is unbalanced, demand is insufficient, prices are low, and a large amount of renminbi is floating outside the market. Especially in recent years, a large amount of capital has fled abroad. According to statistics, the fleeing capital has reached 3 trillion yuan. However, it is not that the renminbi should really appreciate.
If the capital market was opened up at that time, the fleeing capital plus the renminbi hidden in the ground in China poured out, and the financial predators used financial leverage to mobilize ten yuan of one yuan of funds to attack the renminbi, there may eventually be two result. The more optimistic result is that the People's Bank of China has sufficient foreign exchange reserves, and finally gritted its teeth to support the RMB exchange rate. However, at this time, due to the large amount of dollars that have been thrown out, the foreign exchange reserves are also completely lost, and the national economy has regressed for several years or even more than ten years. The second result is even more terrifying, that is, the central bank finds that it cannot support it, and finally allows the RMB exchange rate to change. At this time, the RMB exchange rate will fall all the way. The more the RMB falls, the more people sell the RMB, and the more they sell the RMB, the more the RMB exchange rate will fall until it finally collapses. This is a replica of the financial crisis in Southeast Asia. By that time, China was completely sluggish.
This is the most serious possible consequence of the appreciation of the renminbi. Even though China is still under capital control, it is a sign that all kinds of speculative capital still enter China through various channels with more than 20 billion US dollars.
So, can the RMB not appreciate, but capital liberalization? As Zhang Wuchang advocated? Comparatively speaking, I would rather the RMB exchange rate float a bit, while not opening up capital exchange, and I would not open the capital market under a fixed RMB exchange rate. Because of the floating exchange rate, hot money is going to attack the RMB. At least I can strengthen control through administrative means and open up the capital market. In the current situation where the RMB may depreciate in general, if foreign financial predators and the underground RMB attack China, Even if the renminbi does not appreciate, a large amount of foreign exchange reserves may be consumed and the economy suffers heavy losses.
On the other hand, we can't help asking, even if the United States does not use tricks to snatch China's foreign exchange, does foreign exchange have any meaning for China?
For a long time, due to policy mistakes in education, social security and welfare in China, as well as the further widening economic gap between the central and western regions and between urban and rural areas, domestic demand has been seriously insufficient. Insufficient domestic demand leads to a further reduction in wages, which in turn leads to a further decline in domestic demand. Therefore, China pins its economic development on external demand and hopes to sell its products through foreign trade. However, most of China's products are low-grade products, and the competition in the international market is mainly based on cheap prices. And this kind of cheapness mainly relies on China's cheap labor to complete. This is a very serious problem: if the wages of the labor force are kept down for a long time, domestic demand will not start, and China will further rely on external demand; and relying on external demand will need to lower the wages of the labor force to compete in the international market. Depressing labor wages will continue to depress domestic demand.
It is really a spectacle to step back and look at our domestic economy now:
We continue to produce a large number of products and export them to foreign countries in a steady stream, in exchange for a large amount of foreign currency, but domestic people cannot consume them. A large amount of foreign currency exchanged was flowed back to the United States and other countries by the country by purchasing the national debt of the United States and other foreign countries. In this way, China's GDP marked by paper money continues to increase, but the wealth used for domestic consumption does not increase and may even decline. And because domestic demand is sluggish, external demand accounts for a considerable proportion of total demand, so people think that external demand is more important, and further suppress domestic demand to expand external demand, so the national economy is further distorted. It manifests itself in the form of a large foreign exchange surplus and sluggish domestic demand.
A country's economy should fundamentally depend on the consumption of material wealth. This kind of consumption is the source of the reproduction of material wealth in the next round. How can the country be prosperous and strong with a few pieces of colorful waste paper. The United States has maintained a foreign exchange deficit all year round, but it has become an economic superpower. This is a very important point. The foreign exchange obtained from China's foreign trade is not used to purchase corresponding foreign material wealth for domestic development. Let alone 400 billion U.S. dollars in reserves, even if there are 4 trillion U.S. dollars, it is no different from waste paper? It is a pity that domestic demand has been tightened in vain, but It is to make wedding clothes with others.
The success or failure of foreign trade depends not on whether you have a deficit or a surplus, but on whether the added value of your products is high. If the added value of the product is low, the more surplus you have, the more the national power will decline. However, this economic analysis is not the content of this article, and it will be analyzed later. At present, the People's Bank of China is trying its best to curb the appreciation of the renminbi, and the way it intervenes is the standard western macro-monetary policy, that is, buying dollars and selling renminbi. In order to prevent inflation from being thrown out of RMB, on the other hand, it tightens monetary policy and weakens the amount of money injected in normal ways, in order to achieve the stability of a country's total currency. This method is very dangerous, because although the total amount of currency seems to be stable, it has strengthened the economic imbalance, normal business operations are restricted by the tightening monetary policy, and a large number of renminbi are thrown out of the market. As a result, China's economy will be in such a dilemma: the economy will continue to shrink, the demand will continue to be exhausted, and a large amount of renminbi will become a river hanging on the ground, which may collapse at any time. Therefore, once the normal economy picks up a bit, the central bank has to worry about it, fearing that the river will collapse and cause inflation, so it tightens its pockets. And tightening the pockets of money, the economy will not improve. So two factions of economists quarreled, one said that China's economy was going to be inflationary, and the other said that China was still deflationary. The key thing to fear is this hanging river, a sword hanging above his head. Without this hanging river, whether the Chinese economy is shrinking or expanding, the situation will be clear and there will be much less debate.
For the Chinese economy to function normally, this hanging river must be cut. Strengthen the taxation of monopoly profits, strengthen the fight against capital flight, implement a property registration system, and increase inheritance tax. Increase investment in education and public welfare facilities such as social security and medical care. Effectively protect workers' rights, improve the quality of our country's labor force, and stop always being proud of cheap labor. Transform an export-oriented economy into an inward-looking economy. The above measures can be equivalent to the impact of the central bank's monetary tightening on investment, but they can stimulate the enthusiasm for investment and increase consumption, cutting the hanging river, so it is not the same as merely tightening monetary policy. For the current foreign exchange reserves, in addition to retaining the necessary part to stabilize the market, it should be used to purchase strategic resources or technologies. In this way, the U.S. dollar will be thrown out, so as not to talk about the international community, and at the same time make foreign exchange more effective. It is actually used to build China, instead of holding foreign exchange at the bottom of the box like a miser.
Add
