It’s not that the funds are gone, but that the credit is gone. The credit mentioned here specifically refers to the trust given by various market entities to relevant parties in the process of economic operation and the subsequent capital reconstruction process.

For example, if you have deposits in the bank and you want to buy a house, you need a loan when the funds are insufficient. When the economic situation is in a period of growth, the bank will give you a loan if its credit to individuals, including businesses, is relatively high. For example, If you lend you 1 million, this 1 million is the bank's funds, and it is directly occupied by you. The 1 million will be double-counted into 2 million, and the scale of social funds will be large. In finance, it is called money reconstruction;

< p> If the economy is in a period of downturn or crisis, the trust given by banks to society and the scale of loans will be small, and individuals will have less funds. They may not be able to afford a house. The demand for house purchases will be low, and house prices will fall. Going back to the 500,000 mentioned above, no one wants even 500,000. In addition, some people buy houses for investment. If the social demand for house purchases decreases, investors will not buy anymore because they are worried about investment losses, and they may not buy houses worth 500,000 yuan.

The funds are not gone, but the credit of the banking system has been reduced. These include the reduction of the People's Bank of China's credit to commercial banks and the reduction of commercial banks' credit to society. After the credit is reduced, the RMB will be transferred from the circulation area to the issuance fund of the People's Bank of China. The money in the issuance fund cannot be called cash, and it cannot flow out to participate in social and economic buying and selling activities.

What are the characteristics of a financial bubble that begins to burst?

The main characteristics are that people's consumption is soaring and prices are rising. People spend money when they have it and do not save or save very little.