For example, in 2020, the outbreak of this epidemic led to currency overshoot. In the United States, financial assets such as stocks are prone to skyrocketing, while in China, houses are prone to skyrocketing, and different countries have different choices.
For another example, in 2020, not all stocks in the US stock market are rising. The Standard & Poor's 500 Index, represented by traditional industries, rose by 15%, while Nasdaq, represented by innovative technology and biomedicine, rose by 40%. Tesla, the representative of emerging industries, was included in Standard & Poor's for the first time and rose by 27% that day. Therefore, even similar assets in the same country have structural differences. Although the whole market is rising, there are great differences among different stocks. So is the house in China. Houses in the central areas of key cities such as Beishangguangshen and Shenzhen are skyrocketing, which are high-quality assets. Houses in suburban fringe areas are inferior assets without inflow, many of which do not rise or even fall, and the structure is also obvious.
Generally speaking, money is over-paid, and the extra money will first flow to the areas that can get the most income to earn income. When the economy is booming, it is more willing to flow to production and sales. When the economy is bad, it mainly flows to the field of financial assets. After a period of sharp rise, the market has accumulated risks, and funds will cash out and flow to other places.
Therefore, if the super currency is properly regulated, it will promote economic activity, guide the interconnection between industries and be conducive to economic growth. However, if it is not well controlled, it will easily lead to speculation, inflation and rising prices, which will have a negative impact on the economy and people's livelihood.
Such assets must meet six conditions: 1. Scarcity, 2. Easy to cash out, 3. Easy to lock in liquidity, 4. Do not hold a lot of foreign capital. Does not affect people's livelihood, and 6. Easy to control the buying and selling process.
Give some familiar examples.
House: luxury house in big city, school district house, small apartment in core area.
Stocks: Tencent Holdings, Kweichow Moutai, Meituan, Tesla, etc.
Others: Bitcoin, etc.
This kind of asset must be scarce, it can be natural, it can also be artificially agreed, it can be an industry monopoly or a technology monopoly ... In short, it must be scarce.
Houses in urban areas will skyrocket, suburbs will not skyrocket, degree rooms will skyrocket, ordinary houses will not skyrocket, commercial housing will skyrocket, and commercial real estate will not skyrocket. The reason is scarcity.
Such assets must have the following characteristics:
Only assets that are easy to realize will people be willing to continue to spend money on them to undertake the liquidity under the currency overshoot.
People will not cash out in large quantities, or they can't cash out in large quantities. Could be:
Why do you need this condition? Because after asset inflation, if liquidity cannot be locked, people will cash out in large quantities, which may lead to flooding of liquidity and hyperinflation.
Why do you need this condition? Because, if you hold a large amount of foreign capital, after asset expansion, a large amount of foreign capital will be cashed out, which will lead to a large loss of foreign exchange, which will affect the stability of the exchange rate.
After the expansion of this kind of assets, it will not affect people's livelihood, and at most it will cause people's ridicule and abuse.
Therefore, housing prices in big cities can skyrocket, and most of the houses just needed in small cities will not skyrocket, but at most they will rise steadily.
If the buying and selling of such assets is easy to control, so much the better. We can control the entry and exit of money at any time to prevent the flood of liquidity and lead to hyperinflation.
BTB, core value stocks, mineral resources.