Ensuring the stability and rise of the value of RMB is to improve the domestic purchasing power of RMB. The only correct way to improve domestic purchasing power is to realize tight or tight monetary policy. The loose monetary policy since 2008 is wrong, which is not in line with the actual situation of China's economic development. The insufficient domestic demand in China is mainly caused by the disparity between the rich and the poor, not the insufficient currency circulation. Professor Zhang put it well, "If demand can stimulate the economy, then the world would have entered a capitalist society". In the long run, tight monetary policy will only increase the purchasing power of RMB, and will not reduce the effective demand of society. The simplest and most extreme example is the currency reform of 1 RMB/SGD 100, which will not actually reduce the effective demand. Tight monetary policy is equivalent to exchanging S $ 100 for S $99 yuan. In essence, Keynes's loose monetary policy and fiscal policy are effective not because the policy itself plays a role, but because it indirectly plays a role in balancing the rich and the poor. First, the government invests a lot of public funds, which actually enables people who have no money to spend (the consumption of public products is free); Second, the social welfare system actually distributes the money of the rich to the poor in the form of social welfare through taxation; Third, the essence of inflation is to devalue people's deposits, and its essence is to devalue the money of the rich, because the poor borrow more and the rich save more, which indirectly realizes the transfer of assets. Therefore, on the basis of implementing a fair and efficient national income distribution policy, we should firmly implement a tight or tight monetary policy to ensure the continuous improvement of RMB purchasing power and lay a good foundation for opposing deficit finance and predatory monetary policies in Europe and America.

2. Resolutely oppose deficit finance and loose monetary policies in European and American countries.

The value of RMB has risen steadily, so we have reason to ask European and American countries to keep the value stable. Especially in the United States, their monetary policy is simply robbery. In 2009, the Federal Reserve purchased $300 billion of US long-term treasury bonds and $750 billion of mortgage-backed securities, robbing people around the world of $654.38 billion. 20 10 years is even worse. On September 29th, the US House of Representatives passed the Exchange Rate Reform to Promote Fair Trade Act yesterday with a vote of 348 to 79.

Only by ensuring the stability of the value of the RMB can we demand the stability of the US dollar. Now, although China's wanton issuance of RMB can promote the stability of RMB exchange rate, this superficial stability cannot guarantee the preservation and appreciation of China's $3 trillion foreign exchange reserves. Although the value has been maintained in RMB, the purchasing power of foreign exchange reserves has been greatly reduced, and the number of international commodities that can be purchased has been greatly reduced. In fact, it has not achieved value preservation and appreciation. If the China government adopts the correct economic policy, the comparative advantage of RMB will be reduced by more than 30%, and there will be appreciation pressure, which will let the market decide whether to appreciate. In this way, although the foreign exchange reserves of $3 trillion depreciated against the RMB, it ensured the purchasing power of the US dollar for international commodities, and actually realized the preservation and appreciation.