How does money change?

  Inflation, according to the common people, is that the money in his hand is “changing hair” and is worthless. Although this statement is image, it is not accurate.

  Inflation is not the price increase of some things, nor the price increase of many things, but almost everything is raising prices.

  The strange word of CPI often appears in the news. CPI is the abbreviation of the initials of the three words in the English “consumerpriceindex”, that is, the “consumer price index.” In economics, the degree of rise in CPI is used to express inflation.

  The index is characterized by no units. If you represent all consumers, in 2008 you bought 100 kinds of goods, including food, clothing, and use, as well as books, newspapers, airline tickets, haircuts, fitness, and medical treatment. Of course, the money spent on each product is different, and the importance is different. We simplify it and don’t consider this. If you buy these things, it costs a total of 2,500 yuan. We define this money as 100 without a unit. This is you, the consumer price index for consumers in 2008.

  Assume that you bought the same thing in 2009 and spent 5,000 yuan. Since 2,500 yuan is the index of 100, then 5,000 yuan is the index of 200.

  Using the 2009 index, minus the 2008 index, and dividing by the 2008 index, we got the inflation rate of 2009, which is 100%.


  The inflation rate is roughly calculated in this way. Of course, the specific calculation is much more complicated. The National Bureau of Statistics specializes in calculating this. The Bureau of Statistics looks for many families, tracks their purchases, and considers which products to choose as samples, but in theory. That’s it.

  Note that the inflation rate is only the increase in the price of goods and services, not including the price of the asset, such as the stock price, regardless of how the Shanghai Composite Index and the Shenzhen Component Index soar, does not affect China’s inflation level; the price of new housing does not include In the CPI, accordingly, it does not affect the level of inflation. You might say that the stock is so expensive, the house price is tens of thousands of square meters, is my money still not hairy?

  Yes, your money is gross, but the house is not an ordinary commodity. It has the property of investment products, it is easy to be manipulated, and the price difference in each place is very different. Which one is the standard calculation is a problem; for stocks Not everyone buys stocks, but goods and services are inseparable. It doesn’t make sense to not count the house and stock prices into CPI. Of course, the price of renting is in the CPI.

  There has been very serious inflation in human history. In the 1940s, the Hungarian price index rose from 100 to 4×1047 in less than two years! This is the worst inflation in human history. No matter how rich you are, even if you are rich, as long as your property is in the form of money, you will be like the poor one.

  Indeed, serious inflation has a “fair” revolutionary role. What Bill Gates, Warren Buffett, Forbes’ super rich, under this level of inflation, will become nothing. Super inflation is the fastest way to eliminate the rich.

  The worst inflation in 2008 occurred in Zimbabwe in southern Africa. Due to the erroneous deprivation of white land and inappropriate economic policies, the country’s inflation rate in the first half of 2008 reached 146,800%! The poorest, one month The income also has tens of millions of Zimbabwe dollars.

  If inflation is severe, there will be very bad consequences. For example, if you lend 1,000 yuan to others this year, the interest rate is 10%, and he will pay you 1100 yuan next year. However, the unexpected inflation has occurred. The inflation rate is 100%. Then, you will suffer, because you get 1100 yuan, you can’t buy the original 1000 yuan to buy, and borrow money from you. People take advantage of it. He used the borrowed l000 yuan to buy something this year, and can sell 2,000 yuan next year. In addition to returning you 1100 yuan, he earned 900 yuan.

  Therefore, serious inflation is beneficial to the debtor and is not conducive to creditors. However, if the creditors are always hurt, no one will be willing to borrow any more. In this way, many investment opportunities will be lost in vain and a great loss to society. Keynes said that the creditor-debtor relationship is the foundation of the entire capitalism.

  Inflation also increases people’s actual tax burden. For example, a person who earns 1,000 yuan a month needs to pay personal income tax. Your income is not enough and you don’t have to pay taxes. Now that inflation is 100%, and your income has only increased to 1,500 yuan, then your actual purchasing power, as measured by what you can buy, will fall, but because 1,500 yuan exceeds the threshold for personal income tax. Point, you have to pay personal income tax. Originally, you became poorer than the original, and instead you have to pay taxes, which further reduces your standard of living. This is very unfair.

  The biggest downside of inflation is that people become confused and overwhelmed by the future. You can safely sign contracts and make investments. You may not dare now, because you don’t know what to do. Therefore, many economic activities have stopped.

  How did inflation occur?

  The first is people’s excessive pursuit of goods, such as Jay Chou’s concert, only 10,000 tickets, but Jay Chou’s “fans” too much, want to look at the style, so some people are willing to spend several times higher than the original price, from the ticket When the trafficker buys a ticket, the price is raised.

  Who is most willing to engage in inflation? It is the government. Because the government is the largest debtor in society, if there is serious inflation, the government’s debt repayment pressure will be reduced immediately. For example, the government’s debt is 100 billion, and next year, but inflation is 100%, debt is reduced by half, and the actual debt is only 5 billion yuan. As long as the government collects 5 billion yuan in taxes and buys goods, it can sell 10 billion yuan next year, just to pay off all debts.

  To put it bluntly, inflation is a hidden tax, and the government secretly turns the wealth of ordinary people into their own. For example, if there are 100 units of goods in the market, and the people have 100 yuan in their hands, the average price of each item is 1 yuan. Now the government has printed 100 yuan of banknotes. Then, half of the things are government, if Print more, and even more of the main things become government.

  Severe inflation needs governance. There are many ways to do this: First, banks shrink their monetary roots and reduce the scale of loans, so that the purchasing power of enterprises and individuals is controlled; second, increase taxes, can also achieve the same purpose; third, increase the basic products. Supply, some commodities have a particularly large impact on price increases, such as the aforementioned pork, because everyone needs it, and if their prices rise, it will trigger a chain reaction. If the supply is increased, the price can be effectively prevented. Fourth, let the overheating The economy has cooled down and slowed down the pace of economic growth. Economists have found that there is a trade-off between unemployment and inflation. Because there is more unemployment and less income, it will not snap up. Let some people lose their jobs, although they are emotionally incompetent, but they can actually reduce the inflation rate.

  It should be noted that when the inflation rate is not serious, there is no harm to the economy, but it may have some advantages. The characteristics of not serious inflation are not as expected. If everyone thinks that the inflation rate of next year is 3%, the workers demanded a 3% increase in wages, and the seller asked for a 3% increase in the sale. Although the price rose, the interests of all people were not hurt.

  Of course, there are always things that have risen above 3%, and some have risen below 3%. But overall, the impact on people is very slight. Moreover, some resource products, such as oil, are disposable and increasingly scarce. If the price is not raised, it will be used up in advance, so the price increase of oil is very reasonable.

  Inflation, if not serious, is not necessarily a bad thing.