According to the latest statistics released by the central bank, as of the end of June, the broad money M2 balance was 192.14 trillion yuan, an increase of 8.5% year-on-year, and the growth rate was unchanged from the end of last month, 0.5 percentage points higher than the same period of the previous year.
It is worth noting that M2 data includes cash flow + demand deposits + time deposits + resident savings + securities company customer deposit + housing Provident fund deposits + other deposits (including non-deposit financial institutions' deposits in deposit-taking financial institutions), while the M2 of 192.14 trillion yuan does not include nearly 4 trillion yuan of insurance premiums purchased by the people of the whole country.
First, let's talk about what problems M2 data can reflect.
M2 reflects both the purchasing power of reality (M1, the sum of cash and demand deposits) and the potential purchasing power. In other words, M2 is the embodiment of purchasing power, reflecting the ability to purchase goods and services after we have earned income, which is a reflection of the economic environment.
How much is the M2 of 192 trillion yuan?
According to the official website of the Federal Reserve, as of July 1, 2019, the US M2 data is $14.8194 trillion, which is about 101.9 trillion yuan according to the current exchange rate of 6.88. Beyond the US 90.24 trillion, it is nearly 1.89 times.
Looking at China's purchasing power level and price level from M2
On July 17, the Ministry of Agriculture and Rural Affairs held a press conference. The data showed that in June, pork prices were wholesale. The price was 21.59 yuan per kilogram, up 4.7% from the previous month and up 29.8% from the same period of last year. The average price of six fruits including Fuji apple, pear, watermelon, banana, pineapple and Kyoho grape was 8.39 yuan per kilogram, up 11.1% from the previous month. It rose by 51.7%. Fuji Apple and Yali, which have the highest attention, rose 106.2% and 165.5% respectively.
First, in 2008, 10 years ago, China’s M2 was 47.52 trillion, which is now four times that time;
Look at the price, the average price of pork in June 2008 is 7.03 yuan / publicJin, in June this year, the average price of pork wholesale was 21.59 yuan / kg, which is now three times that.
4 times the level of purchasing power, relative to the price level of 3 times the level, 43.28 yuan / kg of pork, 16.78 yuan / kg of apples is still cheap.
If M2 maintains an 8.5% annual growth rate, it will reach 312 trillion yuan by June 2025. According to this speculation, if the house price does not rise during the period, the bubble is gradually eaten by M2. If the oversupply of the apartment during the same period, M2 will be released from real estate to other areas. Now, the insurance you bought for four or five thousand yuan is also worth cherishing!
In the future, insurance products will become more and more expensive, especially pure insurance insurance, not only because of your age, but also because of the high risk of future diseases, accidents, etc. The coordination of anti-inflation functions and economic indicators has led to an increase in the pricing of products.
In fact, China's actual purchasing power may be even more alarming in terms of M2. From the perspective of GDP, there is a lot of reasonable tax avoidance in China's GDP. This is contrary to the US, and the US tax is low. The data of 100 million yuan can be reported to 200 million (this can be used to finance 300 million). Others said that the renminbi has depreciated, income has been devalued, and living standards have fallen. But in fact, the use of the renminbi in the country, our purchasing power has not been reduced due to depreciation, in fact, there is not much change. In particular, the development of the mobile Internet and the continuous improvement of its penetration rate have accelerated the improvement of purchasing power.
Let's take a look at the two formulas of the insurance industry:
insurance depth = premium income / GDP
insurance density = premium income / total population
Look at another indicator: the ratio of M2/GDP, which represents both the degree of economic monetization and the macro leverage.
(in the past 10 years insurance depth and density trend)
It is not difficult to see that The depth of insurance (premium/GDP) is positively correlated with the degree of economic monetization (M2/GDP). At the same time, when the M2 data grows appropriately, the money supply will increase, and some funds will flow into the insurance market.
LastAnother example is that M2
a student represents the central bank, and several other students represent different banks and depositors. When the central bank stipulates that the deposit reserve ratio is 10%, that is, every time a bank receives 100 yuan, it needs to keep 10 yuan to meet the cash withdrawal demand of the depositors, and cannot lend all the money.
Now the central bank pays 100 yuan to the professor. After the professor gets the money, he puts the money in the commercial bank. At this time, commercial bank A can leave 10 yuan and take the remaining 90 yuan to lend. For example, if you lend a small A, the small A will not hold the money all the time. If he saves to another commercial bank B, the commercial bank B can leave 9 yuan and take the remaining 81 yuan to lend.
The currency is circulated in this way. What will be the end result?
A 100-piece deposit, circulated at a 10% deposit reserve ratio, will eventually allow us to transfer 1,000 yuan to the entire society.
The base currency (M0) here is 100 issued by the central bank, and the broad money (M2) is 1000.
Under the 10% deposit reserve ratio, after the circulation of the commercial banking system, the social money supply can be expanded by a full 10 times. This multiple is just the reciprocal of the deposit reserve ratio of 10, also known as the currency multiplier. Therefore, for every additional base currency of 1 yuan, the commercial banking system can create more than 1 yuan of demand deposits.
Correspondingly, if the central bank raises the deposit reserve ratio, the amount of money circulating in the market will be less. At this time, there are fewer investment opportunities in the market (including investment insurance).
(In my opinion, if there is something wrong, welcome Yazheng)