Economic crisis of the Series (xxvii) made from the introduction of inflation to the inflation

 Yang
plum pencil Economic Research Association
XXVII, from the introduction of inflation to the inflation
made in China, there are two good corporate performance. First, administrative monopoly,cheap UGG boots, and second, foreign trade enterprises. The former, who people know, the better their performance, the Chinese economy worse. they each earn a dollar, it means that might otherwise be the triple, five or even ten dollars, hundred dollars is gone. they are lower than improve the speed of China's economic development.
and foreign trade enterprises, did for the community to create real value, to meet the needs of the consumers mm though foreign consumers. these enterprises, is the real engine of growth in China .
Unfortunately, system deficiencies, so that these quality companies created wealth and no more for the benefit of the Chinese people. these companies more in the benefit of foreigners. And, because of exchange controls and fixed exchange rates, the quality of foreign trade U.S. companies also introduced China's inflation.
mentioned inflation, business cycle theory to be played out.
business cycle theory is concerned that inflation is the entrance into the economy. Typically, the increase in monetary inflation By means of credit expansion in manufacturing enterprises arrived first, too much money to be used to expand production, and promote capital goods prices, resulting in the production structure of the error extension. the economic crisis is a clearing and correcting this error.
China, the economy body, it could be endogenous is not serious inflation. but because of exchange controls and fixed exchange rate, from the U.S. introduction of a substantial amount of inflation.
the inflation is through foreign trade enterprises to enter China, the economy. foreign trade enterprises of all dollars of income, are automatically converted at the official fixed exchange rate of RMB deposit accounts of foreign trade enterprises. If no inflation in the U.S., this is just poor circulation caused by the foreign exchange. enterprises imported, but also time-consuming to go to apply indicators. < br> But if the United States have inflation,Discount UGG boots, foreign trade enterprises are in U.S. dollars, of which there are very legitimate components counterfeiting. This has actually depreciated dollars of income. If a corresponding increase in the exchange rate, change to more dollars, you can offset the depreciation of the dollar. But the exchange rate is fixed, although somewhat lower than 8.3, but not in place, the result is converted to the enterprise central bank also devalued the yuan. This is equivalent to the central bank following the issuance of RMB U.S. inflation. RMB business took these out, inflation began to spread in the Chinese economies.
foreign trade enterprises are the first to get the money, and they have the status of inflation in the most favorable, but, conversely, such advantages and pit them, let them miscalculated their ability to invest. RMB in their hands, in fact, already contains some of the legal counterfeiting.
and other production enterprises, like, foreign trade enterprises to get more money later, unable to tell whether there were legitimate fake. They just that their business can be a big success, a reasonable approach is to expand production as quickly as possible, occupying a larger international market share. As a result, these funds were put into production.
Therefore, the current round of the prosperity phase of the business cycle in China to mainly for large-scale development of foreign trade enterprises.'s trade surplus increased rapidly.'s foreign exchange reserves are rapidly increasing. Pearl River Delta, Yangtze River Delta and other major concentration of the rapid development of foreign trade enterprises. These enterprises mainly in the offshore market, but their investment funds competition in the domestic capital goods,UGG boots, leading to the domestic capital goods prices to rise. Meanwhile, the exchange rate is low, a large number of dollars of hot money into China is also involved in housing and stock market investments, resulting in a substantial rise in house prices and stock prices. This is pushing inflation A typical high performance of investment goods prices.
the additional money the United States, mainly in the United States for the great development of financial derivatives, while in China, it mainly for the great development of foreign trade enterprises. Since the existence of counterfeit legitimate these developments a considerable part is wrong, is unsustainable, and sooner or later be liquidated.
crisis first erupted in the United States. The financial institutions were liquidated. Lehman Brothers fall first. have been other banks also have fallen. who too much involved in financial derivatives financial institutions, must make a lot of wrong investment, it will inevitably be liquidated. But by this time, the U.S. government stepped in, and the inflation to continue, even accelerate, temporarily keep these financial institutions. familiar with the business cycle theory knows that, after the liquidation dragged, this is not a good thing.
When the U.S. began to liquidate bad investments, many people will be tight wallets, consumer demand will inevitably decline. China's foreign trade enterprises will be of the order reduce, their income will decrease. through their introduction to China's inflation will decrease. in accordance with the business cycle theory, when inflation decreases, that is a crisis.
This is the reality we see, the United States In this form of economic crisis to transfer to China. the introduction of error developed during inflation, foreign trade enterprises will face liquidation. their inevitable bankruptcy and unemployment. the surface look, as if this crisis is due to contraction in U.S. demand, but In fact, this crisis is not sustainable to stop the inevitable result of inflation.
new labor law and other factors seriously deteriorated the living environment of foreign trade enterprises, resulting in many enterprises difficult to sustain. The mixture of human disturbance and the business cycle in together, so that complicated matters, but also to complicate the solution. However, the basic context of the business cycle is still clear.
crisis broke out, then there may be two trends: First, stop inflation, liquidation, while increase in real savings, until after the liquidation of real savings and adapt the structure of production, the liquidation to a halt.'s economy will re-enter the growth. Although during a painful adjustment, but this is the only viable option, provided that those in power To understand the economics-related knowledge, and long-term policy considerations.
if the government is ignorant of economics, or no long-term policy considerations, it will take another way, that is, inflation continued. If inflation continues, production structure of the liquidation of the error would not have been, because in terms of inflation, those errors are exposed do not come out, naturally there can be no redress.
However, the delayed correct the error of course not a good thing. This delayed the price must be wrong to continue to accumulate, when,UGG boots clearance, finally unable to again and again, the crisis will still be broke, but will be more violent eruption.
Unfortunately, the United States and China now seems to be using this approach. the U.S. economy after crisis Obama The Government made money, stop the liquidation of financial institutions to continue to try to stop the conduct of the liquidation and adjustment.
crisis has caused the sharp decline of China's exports, for several months, fell more than 20% of the input inflation substantially reduced. In order to maintain the momentum of inflation, the Chinese initiate endogenous inflation. The Government hands expansion of credit, direct manufacturing inflation. The Government considers that in order to stimulate domestic demand to help bail out troubled companies.
based on economics ignorance and short-sighted policy objectives, the two countries join forces to big fat bill, stimulating consumption. Joy is waiting for the note-issuing economy were in her career.
then, China has what should be done to get rid of the economic crisis it?