The increase in bank loans has led to the number of banknotes in circulation exceeding the actual demand, which has led to the price increase and the devaluation of banknotes. For example, the circulating commodities with a value of 100 yuan need to be sold. Under normal circumstances, as long as there are 100 yuan notes in circulation, the exchange can be successful. If a loan of 100 yuan is added in circulation now, the paper money in circulation is 200 yuan, and the goods are only 100 yuan. Therefore, the demand for products exceeds the supply, and the price of original commodities has increased from 1 yuan to 2 yuan. At this time, the purchasing power of paper money is only half of the original.