Read Zhou Qiren's Lessons of Money. Before I started reading it, I thought it was saliva from the newspaper. I plan to finish reading it in two days. You can stop watching, cover up the aftertaste, and even continue watching for a week, and you will get a lot. Teacher Zhou is really good at writing "series" comments. If ordinary columnists have a well-thought-out plan when writing articles, Mr. Zhou also has a well-thought-out plan when writing comments-he speaks calmly and occasionally sets some suspense, which makes people unable to help reading the next article to solve their doubts. It's like reading a long story, with chapters and sections, step by step. After reading the series of comments, I have a feeling of forcibly getting through the second pulse of Ren Du, which really requires the author's profound skill. Compared with the ever-changing economic situation, this is an "old book", published in June 20 12 (this book collects a series of comments on exchange rate and currency issues written by Mr. Zhou in the Economic Observer during the years of 10 and1); This is also a "new book", and the monetary phenomena and explanations mentioned in the book are not out of date at all. This is a must-read for children's shoes who try to correctly understand currency phenomena such as exchange rate and inflation. There is a joke that ten economists will have eleven views on the same economic phenomenon. What we are talking about is the diversity of economic theory's explanation of real economic operation, and it also reflects the complexity of reality from another side. Some economic phenomena are easy to understand, such as consumers can buy goods or services with money; Some economic phenomena are very puzzling. For example, in modern society, why is money no longer gold and silver but printed paper towels? Why do cotton paper printed in each country have exchange rate fluctuations? What is the necessity of the existence of a central bank that issues money? Why does RMB depreciate internally and appreciate externally? ..... Teacher Zhou said that "understanding money is easier than understanding money", which makes sense. Money is that piece of paper, and so is money. But this paper is completely different from that one: money maker, currency in circulation. It's easy to understand the money in your hand, but it's really difficult to understand the money that goes around in everyone's hands after spending it. However, no matter how complicated the economic phenomenon is, it also has its inherent logic. If there is any logic, it should be because researchers have not explored and studied thoroughly. Wang Yangming, a famous figure in the Ming Dynasty, praised the theory of "unity of knowledge and action", saying that knowing to the extreme is doing, and doing to the extreme is knowing. Theory to the extreme, must be true. The real monetary phenomenon should be explained by a set of self-consistent logic. Teacher Zhou's book tries to do such a job. I can't think of a better logic and explanation than Miss Zhou. I can only simply sort it out and record it for reference: Q: What is the exchange rate? Why is there an exchange rate? A: The exchange rate is the ratio between two currencies. How much RMB can I exchange for a dollar? This is the exchange rate issue. At present, most of the money in the world is paper money, which is not valuable and of little value. The ultimate fulcrum of monetary value is a country's national strength or government credit. If money is also regarded as a commodity, then this commodity will have a corresponding value, which we can call "monetary value". The most direct expression of monetary value is the purchasing power of money, that is, how many actual goods and services a country's monetary unit can exchange. Because each country's national strength and government credit are different, the currency value will be different. The ratio of different currencies is the exchange rate. In the real world, the most closely related to the exchange rate is cross-border trade. In cross-border trade, both parties can only use one country's currency for settlement (such as USD). When you return to your country after trade, you must exchange local currency (such as RMB) to buy your own goods and services. This conversion rate is the exchange rate. It should be noted that before the emergence of paper money, all countries used gold (or silver). The same currency does not care about the exchange rate. Q: More than a decade ago, during the Asian financial crisis, the international community called on the RMB not to depreciate. In recent years, the United States and other developed countries have been clamoring loudly that the RMB is undervalued and should be appreciated. What the hell are these foreign devils doing? Is it a sign of patriotism and backbone to insist on not appreciating the RMB? A: Generally speaking, it doesn't matter whether the RMB appreciates or depreciates. The appreciation of the renminbi has blocked exports, but individuals who spend abroad and Shanghai have benefited; The depreciation of RMB promotes exports, but inhibits imports. In short, the exchange rate has risen and fallen, and some people have benefited and some have suffered. The advantages and disadvantages of the whole depends on the current environment. Now Americans are calling for RMB appreciation, saying that appreciation is a responsible big country; China people say that it will not rise or appreciate slowly, and the theory of appreciation is an open plan of Americans. Please note here that Americans are also divided into interest groups. American manufacturers and exporters, of course, want the RMB to appreciate, so they lobbied in Congress and shouted to China. But there are two sides to this story. Importers and consumers in the United States have benefited a lot from "Made in China" in recent years, but these vested interests will not yell at China (when you have all the interests, what are you yelling about? )。 So some Americans are calling for the RMB to appreciate. For China, the biggest problem of RMB appreciation is to hinder exports. This is easy to understand. Exporters' raw materials, fixed assets, human resources, etc. They are all settled in RMB, but when they are exported, they actually get back US dollars. The appreciation of the renminbi is the depreciation of the dollar. At one end, the cost is increasing, and at the other end, the income is derogating. How painful! Most businessmen in China are exporters, and the pain of exporters can be regarded as the pain of China's economy. In China, a country with an export-oriented economy, export obstruction is of course the biggest original sin. On the other hand, why must we be "export-oriented"? With the global economic depression, China's exports are naturally blocked, which is not the fault of the exchange rate. The general trend, taking advantage of this economic transformation, seems to be a bright road (export-oriented inflation, see below). The appreciation of the renminbi has not betrayed the country, but some people are happy and others are worried. Q: Isn't the exchange rate essentially the currency ratio of two currencies? This exchange rate can be formed spontaneously by comparing the actual currency (actually bidding for foreign currency) in the money market? Why do foreign devils continue to rely on propaganda to exert pressure? Is the exchange rate issue a political issue? Is it reasonable for the government to intervene in the formation of exchange rate? A: It depends on the actual formation mechanism of RMB exchange rate in China. In principle, the exchange rate (the ratio of different currencies) is really determined by the market, and the government does not interfere, forming a so-called "floating exchange rate". However, China's exchange rate market is somewhat special: it is a tangible market, called China Foreign Exchange Trading Center, with its headquarters on the Bund. Only this one, no branches. As far as the exchange rate formation mechanism is concerned, the China Foreign Exchange Trading Center has indeed been completely market-oriented, and whoever bids high for foreign exchange will be sold to him. But because there are no branches abroad, foreigners can't buy RMB outside China, so they can only shout from a distance. The market problem has become a political problem. In fact, there is not a country in the world that does not intervene in the exchange rate. The only difference lies in the degree and means of intervention. It is legitimate for the government (central bank) to intervene in exchange rate changes, and its purpose is clear, that is, to maintain "exchange rate stability" (please note that I said "stability", not "rise" or "fall"). Some readers may ask, is exchange rate stability important? Of course it matters. Or in the field of international trade, or the separation of costs and benefits mentioned above and the application of different currencies. There is always a time lag in the project, the exchange rate changes too frequently, and the cost-benefit expectation is disordered. How to do this business? Money is not an ordinary commodity, but a measure of value. The standard of the measuring ruler is long or short, so the transaction naturally cannot go on. From this perspective, Qin Shihuang's use of administrative power and unified measurement will make great contributions in the future. So it doesn't matter whether the RMB appreciates or depreciates. It is important not to let the RMB appreciate or depreciate sharply frequently. The stability of RMB exchange rate cannot be achieved automatically through the market, and it needs the intervention of the visible hand of the government. By the way, people usually discuss the dispute between fixed exchange rate and floating exchange rate (represented by Mundell and Friedman). In reality, whether the government intervenes in the exchange rate market is not different. Relatively speaking, the government intervention under the floating exchange rate is relatively small, but it is only relative. When the exchange rate fluctuates too much and affects the smooth operation of the economy, the government will inevitably take measures to "maintain stability", which is called "dirty floating". Q: Is the RMB exchange rate just a foreign trade issue? Is it related to importers and exporters and people other than foreign businessmen? A: Of course, it's not just about foreign trade. The exchange rate is closely related to everyone. China is an export-oriented economy. Exporters have created a large trade surplus, and goods are exported abroad in exchange for a large amount of foreign exchange. The foreign exchange held by these enterprises cannot directly buy raw materials in China, so they are sold to commercial banks. Commercial banks can conduct foreign exchange transactions in China Foreign Exchange Trading Center. And this China foreign exchange trading center is a membership system. These members are central banks, major commercial banks or other financial institutions. The exchange rate is determined by these members bidding against each other, and the highest bidder wins. Among these members, there is a super premium member called the central bank. The central bank has done something in this market called "buying foreign exchange by hand". How big are your hands? Anyway, it buys most of the foreign exchange in this market. It should be noted that the central bank did not use administrative power to buy and sell, but followed the market rules to buy goods in the market like other government agencies. Obviously, the central bank has the highest bid, so everyone is willing to sell the foreign exchange obtained through the trade surplus to the central bank. The question is, where does the central bank go to buy foreign exchange manually? We know that the central bank has the right to issue money. A natural and convenient operation is to print RMB to buy foreign exchange. In fact, the People's Bank of China has already done so. The consequence of this operation is that the central bank "passively issues money": in the case of China's export-oriented economy and perennial trade surplus, foreign exchange keeps flowing into China, and the central bank has to print a lot of RMB and buy foreign exchange in order to maintain the stability of the exchange rate. In recent years, foreign exchange reserves have been rising year after year, and the number of passive issuance of RMB is very considerable. The perennial trade surplus means: things are sold abroad, and a lot of money is brought back, but there are not many things at home. What can I buy with so much money? As a result, prices soared, forming the so-called "inflation". Inflation is closely related to everyone. Remember, any external problem is actually an internal problem. Q: The central bank borrowed heavily to buy foreign exchange, which caused the currency to be oversold. In turn, it has to issue central bank bills, increase statutory reserves and raise interest rates to recover liquidity (to curb inflation). What's the point of all this trouble? A: First of all, it is clear that the central bank's foreign exchange purchase plan is to maintain "exchange rate stability" and promote normal import and export trade. Frequent exchange rate changes will double the cost of foreign trade transactions, leading to the failure of transactions that could have happened. Exchange rate stability is particularly important for export-oriented economy. Secondly, Article 3 of the People's Bank Law stipulates: "The goal of monetary policy is to maintain the stability of the currency and promote economic growth." It says here that the central bank's goal in formulating and implementing monetary policy is to maintain "monetary stability". Please note that there is no mention of exchange rate stability. Maintaining monetary stability is the old line of the central bank. Therefore, the central bank has two demands: exchange rate stability and currency stability. These two goals are very important, one involves foreign trade and the other involves the foundation of domestic economic operation, and neither of them can be abandoned. But sometimes there is a struggle between policy objectives, and this pair is typical. To understand why we fight, we must first understand the relationship between the two concepts. Look at the following picture first: (see my personal blog /logs/2349 12626.html) Under the floating exchange rate system, the exchange rate is the ratio of the currencies of the two countries. If the exchange rate is to be stable, the currency value must be stable. There are two possibilities: 1) the currencies of the two countries remain unchanged; 2) The currency changes of the two countries are synchronous, that is, the currencies of the two countries appreciate or depreciate at the same time, with the same range. The possibility of the former is zero, and the latter can only be done occasionally. In the era of paper money, the national credit behind monetary value comes from social productive forces, and the synchronous change of monetary value inevitably requires the synchronous change of productive forces in both countries. If China wants to maintain its currency stability and exchange rate stability, it is inevitable that the currency changes in the United States will be synchronized with those in China. Of course not. How did Uncle Sam cope with the change of China's currency? Even if Americans cooperate with China, will he cooperate with Europe, Japan and Russia? If Americans don't cooperate, the RMB exchange rate will be difficult to stabilize; If the currency is to be stable, it is difficult to achieve exchange rate stability. However, the China government has done such a difficult thing: the central bank printed money to purchase foreign exchange to maintain exchange rate stability, and at the same time used various monetary instruments to recover liquidity and stabilize the currency value. This is really a miracle. But this miracle won't last long, and the final result is inflation. Inflation is a monetary phenomenon-the circulation of money exceeds the total flow of social goods, which is the root cause of inflation. Fixed exchange rate has various indisputable benefits in restraining the government from issuing money indiscriminately and maintaining economic stability. In the book, Mr Zhou Qiren made a comparison. Fixed exchange rate is like the plan provided by Pang Tong to Cao Cao in Chibi War, which connects all the chains on the ship like a flat ground; But in the end, Zhuge Liang burned it clean with a shareholder wind. Similarly, fixing the exchange rate has many advantages, but it also has great risks. There is a lesson in history, that is, the only real fixed exchange rate system-Bretton Woods system (in my opinion, the gold standard and the euro are not fixed exchange rates, but the same currency). This system requires the currencies of all countries in the world to be linked to the US dollar, while the US dollar is linked to gold. If the gold production on the earth is limited, the issuance of dollars will be restricted, and the circulation of all currencies in the world will be restricted. It seems that the inflation problem of paper money has been solved in one game. However, due to the instability of the anchor currency dollar (Uncle Sam abolished the corresponding relationship between the dollar and gold based on various pressures), the system eventually disintegrated. Just like a group of cruisers locked an aircraft carrier, it is a pity that the aircraft carrier is not a mainland and is in danger of sinking into the sea. A fixed exchange rate is an attempt to anchor the dollar, while a floating exchange rate has various anchors. The dispute between the two exchange rate systems is essentially a dispute over the currency standard (the anchor of currency). Fixed exchange rate is not bad, but unsustainable in reality. In recent years, the US government is heavily in debt, and through several rounds of quantitative easing, the value of the US dollar has completely depreciated. People's anchors have flown, so why should we anchor the value of RMB with the US dollar? Q: Is there any way to untie the present knot? A: It is possible. Theoretically, there are the following channels for currency over-issuance: In response to the financial crisis, the central bank actively over-issued money. This often happens in times of economic crisis or war. The above-mentioned central bank passively oversubscribes money. Government-led investment, through the bank's function of "creating money", has caused a flood of liquidity. (Of course, this is also because the government sells land. 1995, Article 29 of the People's Bank Law specifically stipulates: "The People's Bank of China shall not overdraw the government finances, and shall not directly subscribe for or underwrite government bonds and other government bonds." Blocked the first channel at the institutional level. The third channel The government-led economic development model belongs to the successful "China model" in the eyes of many people. For example, Mr. Zhang Wuchang believes that the root cause of China's 30-year economic miracle lies in "competition among local governments", and the existing GDP-oriented official performance outlook is also trying to continue this model. It is difficult to block this third channel of excess money. Therefore, in order to control inflation, there may be a breakthrough in trying to start from the second channel. In this book, Teacher Zhou put forward a point: If the government wants to stabilize the exchange rate, it must use "real money and silver" to purchase foreign exchange. The basic logic is that it is not impossible for the central bank to buy foreign exchange to stabilize the exchange rate. The key is the source of funds for purchasing foreign exchange-stabilizing the exchange rate with excess currency. In fact, it is an invisible tax, which is not included in the budget. Without budget, there is no supervision. If the central bank overspends money to buy foreign exchange, it is equivalent to buying things on IOUs, and there is no constraint. If the source of foreign exchange purchase funds is changed to real government financial funds, the government will naturally be careful, and the funds invested in the exchange rate market are also stock currencies, which naturally reduces the probability of inflation. Teacher Zhou put forward three kinds of "real money and silver": public budget expenditure, profits paid by state-owned enterprises and special financial bond issuance. What about the exchange rate if the money is not stable enough? Teacher Zhou's opinion is, forget it, the twisted melon is not sweet, and the exchange rate should float. The above is the operating logic of China currency. A little wordy, not beautiful enough. But this is the real world. Of course, the above notes are missing. In the book, Mr. Zhou also has many wonderful expositions on controlling inflation: deconstruction and analysis of "structural inflation", feeding new resources to the currency tiger, the history of putting forward and verifying the "theory of money quantity", the disagreement with the People's Bank of China on the issue of raising interest rates, why people choose paper money that is easy to overspend instead of the stable gold standard and the folk gold standard contract, and the relationship between controlling inflation and controlling prices with jujube in Chen Yun. For reasons of space, skip it and read a book.