The value of decentralized money depends on
Publish: 2021-04-21 11:14:03
1. In token economics, decentralized money is not the only object of value circulation and measurement. Therefore, a fixed amount of decentralized money does not necessarily lead to rejection by the market
decentralization in decentralized money contains multiple meanings: decentralization of money issuance, decentralization of money circulation, decentralization of money withdrawal...
as far as our current economic system is concerned, the issuance of money is carried out by the central bank or other similar institutions and endorsed by the national credit. Therefore, the issue of money is obviously a kind of centralized, controlled by the government or institutions. However, in the current economic system, the circulation of money is decentralized
although in our current financial system, the vast majority of money has been circulating through banks, this mode of circulation is mostly controlled by the money owners themselves, that is to say, the circulation of money is not controlled by central institutions. In addition to some specific financial requirements, some circulation has been regulated; Or the judicial organs may intervene and forcibly manage the circulation of money. In proportion, these centralized operations are very few. Therefore, we can say that in the existing economic system, the circulation of money is decentralized< In fact, the central bank and other financial management institutions make use of the power of currency issuance to regulate the whole market and maintain the stability of economic development and currency
we have learned in economics that the total amount of money circulation should match the current trade situation. In other words, the total amount of money circulation is closely related to the economic situation. The circulation of money needs to be regulated to influence the market; And the market also forces the regulatory agencies to regulate the currency through various feedback, so as to maintain the stability of the currency.
decentralization in decentralized money contains multiple meanings: decentralization of money issuance, decentralization of money circulation, decentralization of money withdrawal...
as far as our current economic system is concerned, the issuance of money is carried out by the central bank or other similar institutions and endorsed by the national credit. Therefore, the issue of money is obviously a kind of centralized, controlled by the government or institutions. However, in the current economic system, the circulation of money is decentralized
although in our current financial system, the vast majority of money has been circulating through banks, this mode of circulation is mostly controlled by the money owners themselves, that is to say, the circulation of money is not controlled by central institutions. In addition to some specific financial requirements, some circulation has been regulated; Or the judicial organs may intervene and forcibly manage the circulation of money. In proportion, these centralized operations are very few. Therefore, we can say that in the existing economic system, the circulation of money is decentralized< In fact, the central bank and other financial management institutions make use of the power of currency issuance to regulate the whole market and maintain the stability of economic development and currency
we have learned in economics that the total amount of money circulation should match the current trade situation. In other words, the total amount of money circulation is closely related to the economic situation. The circulation of money needs to be regulated to influence the market; And the market also forces the regulatory agencies to regulate the currency through various feedback, so as to maintain the stability of the currency.
2. The value of decentralization in jinwowo network analysis is as follows:
(1) fault tolerance: once there is a problem in the center, other nodes are easy to collapse. The centralized system is unlikely to be unexpected, because it depends on other nodes, and other nodes can not have problems together
(2) anti attack ability: decentralized system will make the cost of being attacked higher, because it lacks a sensitive central point, and the central point is more likely to be attacked by low cost. The reason is that we should all understand that the attack center may completely collapse, which is why more and more investors want the decentralized technology to become more mature
(3) anti Collusion: it is difficult for the participants in the decentralized system to sacrifice other participants and plot to make their own profits.
(1) fault tolerance: once there is a problem in the center, other nodes are easy to collapse. The centralized system is unlikely to be unexpected, because it depends on other nodes, and other nodes can not have problems together
(2) anti attack ability: decentralized system will make the cost of being attacked higher, because it lacks a sensitive central point, and the central point is more likely to be attacked by low cost. The reason is that we should all understand that the attack center may completely collapse, which is why more and more investors want the decentralized technology to become more mature
(3) anti Collusion: it is difficult for the participants in the decentralized system to sacrifice other participants and plot to make their own profits.
3. The value of money is formed spontaneously in commodity exchange, not determined artificially.
after World War II, the Bretton Woods system was established in the last century.
it was decided that the US dollar should be pegged to gold, and the currencies of all countries should be pegged to the US dollar.
a fixed exchange rate was determined.
the value of the currencies of all countries was basically determined in the 1970s e to the economic development of the United States The value of each country's currency is partly or completely determined by the market
about a country's instry
the value of currency is not only determined by the domestic market situation
the more important factor is the trade between countries
about a country's instry The development of the financial instry
first of all, the state usually does not take rigid measures to intervene in the operation of a certain part of the market
China is a socialist market economy system, the degree of freedom of the market is relatively high
and sometimes excessive market intervention will not receive the expected effect, but will self defeating The profits generated by the operation of financial procts such as securities and Futures and their derivatives are not included in GDP
so the saying that finance accounts for a high proportion of the economy does not seem to be true
if it refers to the financial market
the state only takes necessary measures to ensure the healthy and stable operation of the financial market
rather than hindering its development
after all, China's financial market is not stable The financial market has just started, the system is not perfect, there are many loopholes
and there is a lack of relevant laws and regulations
after World War II, the Bretton Woods system was established in the last century.
it was decided that the US dollar should be pegged to gold, and the currencies of all countries should be pegged to the US dollar.
a fixed exchange rate was determined.
the value of the currencies of all countries was basically determined in the 1970s e to the economic development of the United States The value of each country's currency is partly or completely determined by the market
about a country's instry
the value of currency is not only determined by the domestic market situation
the more important factor is the trade between countries
about a country's instry The development of the financial instry
first of all, the state usually does not take rigid measures to intervene in the operation of a certain part of the market
China is a socialist market economy system, the degree of freedom of the market is relatively high
and sometimes excessive market intervention will not receive the expected effect, but will self defeating The profits generated by the operation of financial procts such as securities and Futures and their derivatives are not included in GDP
so the saying that finance accounts for a high proportion of the economy does not seem to be true
if it refers to the financial market
the state only takes necessary measures to ensure the healthy and stable operation of the financial market
rather than hindering its development
after all, China's financial market is not stable The financial market has just started, the system is not perfect, there are many loopholes
and there is a lack of relevant laws and regulations
4. Money is a contract of exchange between people. Money has a certain range of credit relying on power politics. Then people recognize this kind of credit and start to use it. What money represents is value. Money itself has no value, but we change various forms of value into a unified circulation unit and give it to money, which is convenient for us to exchange value In exchange for circulation, the country will issue as much money as we have in the form of real value. Of course, there is not necessarily a certain floating space. Of course, if this proportion is seriously unbalanced, there will be economic problems
5. Short term factors:
1. Short term currency liquidity
2. Some short-term technical indicators
3. Geopolitical and unexpected factors
long-term factors:
1. Supply and demand
when supply exceeds demand, the currency will depreciate; When the supply exceeds the demand, the currency will appreciate
2. Monetary policy
changes in monetary policy will have an important impact on the value of money, which is the core factor
3. Economic trend
judging the value of money according to the economic trend, China's economic situation in the past few years was relatively good, GDP showed a rising trend year by year, in a state of rapid growth, The probability of currency appreciation will also be greater
4. Trade deficit
the situation of trade deficit can also reflect the value of currency
5. Political situation changes
under the situation of political instability in Middle East countries, The value of money will fluctuate with the change of political situation
6. Inflation and deflation
the value of money can be judged intuitively through inflation and deflation
7. The development factor of real economy
in China, the real economy is an important factor affecting the value of money, such as real estate, which has a high weight in some developed countries. In the process of development or economic volume of each country, the share of real economy is different. From the perspective of developed countries, the weight of consumer spending is very high. If consumer spending continues to increase, the overall economic development speed of this country is guaranteed.
1. Short term currency liquidity
2. Some short-term technical indicators
3. Geopolitical and unexpected factors
long-term factors:
1. Supply and demand
when supply exceeds demand, the currency will depreciate; When the supply exceeds the demand, the currency will appreciate
2. Monetary policy
changes in monetary policy will have an important impact on the value of money, which is the core factor
3. Economic trend
judging the value of money according to the economic trend, China's economic situation in the past few years was relatively good, GDP showed a rising trend year by year, in a state of rapid growth, The probability of currency appreciation will also be greater
4. Trade deficit
the situation of trade deficit can also reflect the value of currency
5. Political situation changes
under the situation of political instability in Middle East countries, The value of money will fluctuate with the change of political situation
6. Inflation and deflation
the value of money can be judged intuitively through inflation and deflation
7. The development factor of real economy
in China, the real economy is an important factor affecting the value of money, such as real estate, which has a high weight in some developed countries. In the process of development or economic volume of each country, the share of real economy is different. From the perspective of developed countries, the weight of consumer spending is very high. If consumer spending continues to increase, the overall economic development speed of this country is guaranteed.
6. After putting aside the policy of pegging to the US dollar, monetary policy is almost ineffective without solving the most important problem of currency issuance mechanism. If you get one dollar, you can issue the corresponding RMB. This system itself does not meet the requirements of sustainable development. China's monetary policy should not be aestheticism, but should combine the general principles of Marxism with the concrete practice of China's reform. With our own currency issuing mechanism, the reform of RMB exchange rate will come naturally and naturally, which is an absolute guarantee for long-term and healthy economic development
I believe that the general idea of making the economy develop well and rapidly is the inevitable choice to implement the scientific outlook on development put forward by General Secretary Hu Jintao. In view of the fluctuations in the process of economic development, some scholars propose that we can iron out the economic cycle by implementing the corresponding monetary policy in advance. It would be great if such an idea could be implemented. Unfortunately, monetary policy is not always as effective as the figures in textbooks. When the monetary policy proposed by scholars does not achieve the expected effect, they always put forward that the implementation of monetary policy needs to be strengthened and observed for a period of time; When there is no way to explain, scholars will say that this is e to the irrational factors of the market
put aside my differences with economists for the time being. I remember that my grandfather Zhou Gucheng once said to me that if you can't understand what your teacher said in class, it only means that he didn't understand it thoroughly. I think my grandfather is right. When I listen to the old professors who have won the Nobel Prize in economics, I feel that finance is very clear and even very happy. They are telling novel and interesting stories, graally leading students into a new way of thinking, suddenly enlightened, as if into the kingdom of freedom. Based on this, I speculate that some domestic economists may not really understand what they have said, they are just predicting the future with the feeling created by books. However, monetary policy is neither an astrology nor a reflection of some scholars. It should be a practical operation around the operation of domestic economy
if we classify the monetary policies of the major countries in the world, the monetary policy bases of the European Union, the United States and Japan are completely different, and the effect of the interest rate increase policy is naturally very different. The European Union has stipulated the method and standard of money supply in the form of common treaty, and the famous one is the "troika" theory. If the economic growth rate, employment rate and inflation rate are within the preset range, they will provide liquidity to the market. If they are higher than the preset range, they will implement tightening policies to rece the amount of money; If it is lower than the preset range, the expansion policy will be implemented to increase the money supply
the situation in the United States is quite special. I think the Federal Reserve is not a money issuing institution, and the right to issue money in the United States is in the capital market. If a company's share price rises sharply, the United States will correspondingly put in virtual dollars to show the added value of this part. Therefore, the more developed the U.S. capital market is, the larger the scale of its currency issuance is. There seems to be some truth in their ideas. For example, ExxonMobil has discovered a new oil field with reserves of 100 billion barrels. The stock price of ExxonMobil immediately rises, and the market value correspondingly increases by $50 billion, which is equivalent to an increase of $50 billion in the wealth of investors. If someone wants to cash in the profits, as long as the investors in the market generally agree with the new valuation of ExxonMobil, Someone will be willing to provide the investor with sufficient liquidity to make it cash. In the process, the Federal Reserve did not release money, and the U.S. Treasury did not print more dollars. So if the U.S. capital market makes a mistake in pricing an asset, the economy will suffer. In 2001, the wrong pricing of technology stocks by Nasdaq led to economic recession and inflation. Today's subprime debt is the same problem. The market's wrong valuation of borrowers' repayment ability and the value of real estate leads to the market's original issued currency showing the non-existent value wrongly
another is the mechanism of issuing currency with exchange rate represented by Japan. Japan basically implements the monetary policy of pegging to the US dollar for a certain period of time. Every time it receives a US dollar, it issues 100 yen. The effect of this policy is very stable in the short term, but in the long term, it leads to the accumulation of huge foreign exchange reserves in China. China and Japan have similar currency issuing mechanisms. China has implemented the exchange rate stabilization policy for nearly 10 years. No matter how the US dollar rises or falls, the people's Bank of China issues RMB 8.2765 for every US dollar it buys
in the process of development, it is correct for all countries to choose monetary policies that meet their own historical conditions and practical needs. My view is: first, there must be a currency issuing mechanism, and then there must be a monetary policy, so that we can talk about the exchange rate level organically. Of course, for such monetary mechanisms as Japan and Hong Kong, the currency issuing mechanism is the exchange rate mechanism, and they are unified
China started the reform of the exchange rate system in 2005, and the RMB graally appreciated. The way we adopted was the best "small step and fast walk" strategy. However, I don't think the exchange rate issue is the key. The reform of RMB exchange rate is a secondary issue. The core issue is: what is the currency issuance mechanism in China after putting aside the policy of pegging to the US dollar? It is graally decoupled from the US dollar, but basically it is still changing in the same direction and in different ranges with the US dollar. If you get one dollar, you can issue the corresponding RMB. This system itself does not meet the requirements of sustainable development. The law of the people's Bank of China promulgated on February 1, 2004 is actually the law of the people's Bank of China. Legally speaking, one of the important responsibilities of the people's Bank of China is to maintain the stability of the RMB value, not the exchange rate. However, the people's Bank of China has only maintained the stability of the exchange rate of RMB against the US dollar in the actual implementation of monetary policy, but not the stability of the value of RMB. The RMB is depreciating against the euro, the pound, the Japanese yen, the Canadian dollar, even the Russian Ruble and the Brazilian currency. However, the central bank always said in the quarterly monetary report before the exchange rate reform that the exchange rate of RMB against the US dollar remained at 8.2725:1, and the exchange rate of RMB continued to remain stable The law of the people's Bank of China proposes to maintain the stability of the currency value. The central bank's actual implementation is to maintain the stability of the exchange rate against the US dollar, and there is a significant difference between the two. If the value of the US dollar is stable, the two are consistent, but the value of the US dollar has been shrinking for more than two years. I hope that the people's Bank of China will immediately return to the provisions of the law of the people's Bank of China< In retrospect, the people's Bank of China is responsible for formulating monetary policy and issuing RMB. Before the reform of RMB exchange rate on July 21, 2005, the currency issuing mechanism of RMB was actually very clear and transparent. This issuance mechanism is well known by the market, and investors can foresee the future. After the exchange rate reform, so far, I have not seen a white paper on China's currency issuance by the central bank. Just like any country has a white paper on foreign affairs and national defense, there should be a white paper on currency issuance. This white paper should explain in detail what the currency issuance mechanism is, under what circumstances the money will be put into the market, and how the quantity will be determined, etc. Maybe I'm ignorant, but I don't know in the market. We can either follow the example of the European Central Bank to solve this problem, or we can follow the example of the United States to issue money in the capital market. In short, what I feel urgently needs to be solved is what is China's currency issuance mechanism? This is a major problem. There must be a set of money supply mechanism for the issuance of RMB, as well as this white paper
the law of the people's Bank of China only stipulates that "the people's Bank of China is responsible for the currency issuance of RMB". As for how to issue RMB, according to what principle, how much to issue RMB and when to issue RMB, there seems to be no clear provisions in legal documents. And if everything becomes a black box, it's even more terrible. If we have our own currency issuance mechanism, and the market agrees with it, and we all operate according to this new device, then the RMB exchange rate reform will come naturally and naturally. No matter how low or how high it goes, it will be stable. There may be some switching costs between the two sets of machines in the market, but that is one-off, The new rules are an absolute guarantee for the long-term healthy development of our economy
in retrospect, in a sense, the currency issuance mechanism adopted by the European Union and the United States is in line with materialism. In the past, these countries generally implemented the gold standard system as a currency issuing mechanism, which may be correct in the era when there was no technological progress and only depended on plundering to develop overseas trade. However, after instrialization, wealth was created in large quantities, but gold reserves could not be increased correspondingly. Finally, the currency issuance system was out of line with the real economy, and the prices of various procts had to plummet to make the currency issuance meet the requirements of gold reserves again. Therefore, it is also the right choice to dethrone the gold standard. Now, the European Union puts money directly according to the increment of economic development, and the United States puts money indirectly by relying on the recognition of the new added value of enterprises in the capital market. In fact, they all determine their own currency circulation based on the value creation of the actual proction sector. Therefore, these systems, starting from the change of objective value, more or less reflect the materialist thought based on facts. However, the monetary policy implemented by Japan or Hong Kong more or less ignores the actual situation of the economic development of the region, and more embodies the idea of aestheticism. When we establish our own currency issuing mechanism, we should especially consider the viewpoint of monetary materialism
the monetary policy is almost invalid if the monetary issuance mechanism is not solved. In October 2004, the central bank raised interest rates for the first time. At that time, I proposed that raising interest rates would push up house prices. Now I am ready. If the appreciation of RMB against a basket of currencies exceeds the level before the exchange rate reform in July 2005, I am ready to write another article "recing interest rates and lowering house prices" and submit it to the Shanghai Securities Journal for publication. When I came to this conclusion, I had the same confidence as when I predicted that higher interest rates would push up house prices
China's monetary policy should not be aestheticism, but should combine the general principles of Marxism with the specific practice of China's reform. The gold standard ignores the value creation of human economic activities and uses abstract dogmatic gold as currency, so it makes a dogmatic mistake. Although Robert A. Mundell, the "father of the euro", won the Nobel Prize in economics because of the currency issuance mechanism of the European Union, that mechanism still depends on the subjective judgment of the European Central Bank on the economic operation, but this judgment is based on three objective indicators. In fact, the valuation of the capital market depends not only on the objective value basis, but also on the confidence of investors and their expectations for the future. Therefore, the US currency issuance mechanism also has its own subjective characteristics
I believe that the general idea of making the economy develop well and rapidly is the inevitable choice to implement the scientific outlook on development put forward by General Secretary Hu Jintao. In view of the fluctuations in the process of economic development, some scholars propose that we can iron out the economic cycle by implementing the corresponding monetary policy in advance. It would be great if such an idea could be implemented. Unfortunately, monetary policy is not always as effective as the figures in textbooks. When the monetary policy proposed by scholars does not achieve the expected effect, they always put forward that the implementation of monetary policy needs to be strengthened and observed for a period of time; When there is no way to explain, scholars will say that this is e to the irrational factors of the market
put aside my differences with economists for the time being. I remember that my grandfather Zhou Gucheng once said to me that if you can't understand what your teacher said in class, it only means that he didn't understand it thoroughly. I think my grandfather is right. When I listen to the old professors who have won the Nobel Prize in economics, I feel that finance is very clear and even very happy. They are telling novel and interesting stories, graally leading students into a new way of thinking, suddenly enlightened, as if into the kingdom of freedom. Based on this, I speculate that some domestic economists may not really understand what they have said, they are just predicting the future with the feeling created by books. However, monetary policy is neither an astrology nor a reflection of some scholars. It should be a practical operation around the operation of domestic economy
if we classify the monetary policies of the major countries in the world, the monetary policy bases of the European Union, the United States and Japan are completely different, and the effect of the interest rate increase policy is naturally very different. The European Union has stipulated the method and standard of money supply in the form of common treaty, and the famous one is the "troika" theory. If the economic growth rate, employment rate and inflation rate are within the preset range, they will provide liquidity to the market. If they are higher than the preset range, they will implement tightening policies to rece the amount of money; If it is lower than the preset range, the expansion policy will be implemented to increase the money supply
the situation in the United States is quite special. I think the Federal Reserve is not a money issuing institution, and the right to issue money in the United States is in the capital market. If a company's share price rises sharply, the United States will correspondingly put in virtual dollars to show the added value of this part. Therefore, the more developed the U.S. capital market is, the larger the scale of its currency issuance is. There seems to be some truth in their ideas. For example, ExxonMobil has discovered a new oil field with reserves of 100 billion barrels. The stock price of ExxonMobil immediately rises, and the market value correspondingly increases by $50 billion, which is equivalent to an increase of $50 billion in the wealth of investors. If someone wants to cash in the profits, as long as the investors in the market generally agree with the new valuation of ExxonMobil, Someone will be willing to provide the investor with sufficient liquidity to make it cash. In the process, the Federal Reserve did not release money, and the U.S. Treasury did not print more dollars. So if the U.S. capital market makes a mistake in pricing an asset, the economy will suffer. In 2001, the wrong pricing of technology stocks by Nasdaq led to economic recession and inflation. Today's subprime debt is the same problem. The market's wrong valuation of borrowers' repayment ability and the value of real estate leads to the market's original issued currency showing the non-existent value wrongly
another is the mechanism of issuing currency with exchange rate represented by Japan. Japan basically implements the monetary policy of pegging to the US dollar for a certain period of time. Every time it receives a US dollar, it issues 100 yen. The effect of this policy is very stable in the short term, but in the long term, it leads to the accumulation of huge foreign exchange reserves in China. China and Japan have similar currency issuing mechanisms. China has implemented the exchange rate stabilization policy for nearly 10 years. No matter how the US dollar rises or falls, the people's Bank of China issues RMB 8.2765 for every US dollar it buys
in the process of development, it is correct for all countries to choose monetary policies that meet their own historical conditions and practical needs. My view is: first, there must be a currency issuing mechanism, and then there must be a monetary policy, so that we can talk about the exchange rate level organically. Of course, for such monetary mechanisms as Japan and Hong Kong, the currency issuing mechanism is the exchange rate mechanism, and they are unified
China started the reform of the exchange rate system in 2005, and the RMB graally appreciated. The way we adopted was the best "small step and fast walk" strategy. However, I don't think the exchange rate issue is the key. The reform of RMB exchange rate is a secondary issue. The core issue is: what is the currency issuance mechanism in China after putting aside the policy of pegging to the US dollar? It is graally decoupled from the US dollar, but basically it is still changing in the same direction and in different ranges with the US dollar. If you get one dollar, you can issue the corresponding RMB. This system itself does not meet the requirements of sustainable development. The law of the people's Bank of China promulgated on February 1, 2004 is actually the law of the people's Bank of China. Legally speaking, one of the important responsibilities of the people's Bank of China is to maintain the stability of the RMB value, not the exchange rate. However, the people's Bank of China has only maintained the stability of the exchange rate of RMB against the US dollar in the actual implementation of monetary policy, but not the stability of the value of RMB. The RMB is depreciating against the euro, the pound, the Japanese yen, the Canadian dollar, even the Russian Ruble and the Brazilian currency. However, the central bank always said in the quarterly monetary report before the exchange rate reform that the exchange rate of RMB against the US dollar remained at 8.2725:1, and the exchange rate of RMB continued to remain stable The law of the people's Bank of China proposes to maintain the stability of the currency value. The central bank's actual implementation is to maintain the stability of the exchange rate against the US dollar, and there is a significant difference between the two. If the value of the US dollar is stable, the two are consistent, but the value of the US dollar has been shrinking for more than two years. I hope that the people's Bank of China will immediately return to the provisions of the law of the people's Bank of China< In retrospect, the people's Bank of China is responsible for formulating monetary policy and issuing RMB. Before the reform of RMB exchange rate on July 21, 2005, the currency issuing mechanism of RMB was actually very clear and transparent. This issuance mechanism is well known by the market, and investors can foresee the future. After the exchange rate reform, so far, I have not seen a white paper on China's currency issuance by the central bank. Just like any country has a white paper on foreign affairs and national defense, there should be a white paper on currency issuance. This white paper should explain in detail what the currency issuance mechanism is, under what circumstances the money will be put into the market, and how the quantity will be determined, etc. Maybe I'm ignorant, but I don't know in the market. We can either follow the example of the European Central Bank to solve this problem, or we can follow the example of the United States to issue money in the capital market. In short, what I feel urgently needs to be solved is what is China's currency issuance mechanism? This is a major problem. There must be a set of money supply mechanism for the issuance of RMB, as well as this white paper
the law of the people's Bank of China only stipulates that "the people's Bank of China is responsible for the currency issuance of RMB". As for how to issue RMB, according to what principle, how much to issue RMB and when to issue RMB, there seems to be no clear provisions in legal documents. And if everything becomes a black box, it's even more terrible. If we have our own currency issuance mechanism, and the market agrees with it, and we all operate according to this new device, then the RMB exchange rate reform will come naturally and naturally. No matter how low or how high it goes, it will be stable. There may be some switching costs between the two sets of machines in the market, but that is one-off, The new rules are an absolute guarantee for the long-term healthy development of our economy
in retrospect, in a sense, the currency issuance mechanism adopted by the European Union and the United States is in line with materialism. In the past, these countries generally implemented the gold standard system as a currency issuing mechanism, which may be correct in the era when there was no technological progress and only depended on plundering to develop overseas trade. However, after instrialization, wealth was created in large quantities, but gold reserves could not be increased correspondingly. Finally, the currency issuance system was out of line with the real economy, and the prices of various procts had to plummet to make the currency issuance meet the requirements of gold reserves again. Therefore, it is also the right choice to dethrone the gold standard. Now, the European Union puts money directly according to the increment of economic development, and the United States puts money indirectly by relying on the recognition of the new added value of enterprises in the capital market. In fact, they all determine their own currency circulation based on the value creation of the actual proction sector. Therefore, these systems, starting from the change of objective value, more or less reflect the materialist thought based on facts. However, the monetary policy implemented by Japan or Hong Kong more or less ignores the actual situation of the economic development of the region, and more embodies the idea of aestheticism. When we establish our own currency issuing mechanism, we should especially consider the viewpoint of monetary materialism
the monetary policy is almost invalid if the monetary issuance mechanism is not solved. In October 2004, the central bank raised interest rates for the first time. At that time, I proposed that raising interest rates would push up house prices. Now I am ready. If the appreciation of RMB against a basket of currencies exceeds the level before the exchange rate reform in July 2005, I am ready to write another article "recing interest rates and lowering house prices" and submit it to the Shanghai Securities Journal for publication. When I came to this conclusion, I had the same confidence as when I predicted that higher interest rates would push up house prices
China's monetary policy should not be aestheticism, but should combine the general principles of Marxism with the specific practice of China's reform. The gold standard ignores the value creation of human economic activities and uses abstract dogmatic gold as currency, so it makes a dogmatic mistake. Although Robert A. Mundell, the "father of the euro", won the Nobel Prize in economics because of the currency issuance mechanism of the European Union, that mechanism still depends on the subjective judgment of the European Central Bank on the economic operation, but this judgment is based on three objective indicators. In fact, the valuation of the capital market depends not only on the objective value basis, but also on the confidence of investors and their expectations for the future. Therefore, the US currency issuance mechanism also has its own subjective characteristics
7. How is the value of money determined? As a measure of value, does the value of money depend on something else? The classical answer to this question is actually very intuitive: the value of a person's "money" depends on the value of the "opportunity" that money can bring to his welfare in the world he lives in
in a world without "exchange" at all, money cannot represent any opportunity. In a world with "exchange" but not entirely "equivalent exchange", money, to some extent, represents an opportunity for welfare improvement. In a world that can be regarded as "equivalent exchange", the opportunity represented by money depends on the degree of "monetization" of the world economy. In a highly monetized economy, the value of money will further depend on the openness of the economy to other social economies. Generally speaking, the larger the number of people participating in the "equivalent exchange", the higher the value of the opportunity represented by money. So the value of money depends on the scope that Hayek said "the expansion order of human cooperation" can expand
in any case, given the scope of an indivial's world, the opportunities represented by money in the hands of an indivial are limited. Let's further study the indivial consumption behavior (consumption function is the starting point of macroeconomics). The basic consumption behavior, which is meaningful to macro issues such as interest rate, investment and inflation, is a decision-making process for consumers to allocate consumption materials along "time". The simplest analysis model of this process is the so-called "two period consumption model", as shown in the illustration: in the illustration, P stands for "current purchasing power", f stands for "future purchasing power", and indifference curve family represents the decision-maker's "preference order" in the trade-off between consumer goods represented by "current purchasing power" and consumer goods represented by "future purchasing power". Like the usual analysis of microeconomic behavior, if the line L is used to express the future purchasing power generated by the current purchasing power e retained in the future (in other words, the slope of L includes the rate of return on "savings"), then the equilibrium point of consumption will be realized at a (corresponding to the welfare level U2); If, for some reason (inflation, lower monetization, the implementation of the "quota" system...), the rate of return on "savings" falls to the level represented by the line g, then the equilibrium point of consumption will move to a lower welfare level point B (on the curve U1), Corresponding to larger current consumption and smaller future consumption (that is, the decline of macro "saving" rate); If we take into account the "investment" opportunities and the openness of the economy, then the future consumption opportunities represented by the saved current purchasing power will no longer be expressed in a straight line
according to the investment theory initiated by I. Fisher, investment opportunities (arranged according to the rate of return on investment) should be represented by the curve K, while the equilibrium point of consumption and savings (investment) will be represented by C. It is clear that equilibrium point C represents a higher level of welfare (U3) than points a and B. In a more complete market economy, the value of the purchasing power of money can be further improved. For example, when indivials are allowed to freely enter and leave the "lending market", the rate of return on savings is often much higher than the interest rate of bank deposits. This can be expressed as a straight line M. the part of m that exceeds the current purchasing power represented by point e represents the current purchasing power that indivials can borrow from the market (corresponding to the point on the P-axis to the right of point E). Now, the optimal or balanced "consumption saving investment loan" behavior must be represented by a group of points instead of a single point. First, along the investment opportunity curve K, we move from point e to point D1, dect the amount needed for this investment from the current purchasing power e, and then take part of the remaining purchasing power to the lending market to "lend", so as to move to point D2, the rate of return on investment plus the rate of return on lending purchasing power in the lending market, The future consumption is greatly increased (the amount on the F-axis corresponding to point D2), and the indifference curve of point D2 represents a higher welfare level (U4) than other equilibrium points
now let me extend several Institutional Implications from the above analysis: (1) the higher the degree of monetization of an economy, the higher the value of its "currency". This has been illustrated by the welfare improvement resulting from the transition from line g to line L 2) The more investment opportunities an economy creates, the more determined it is to protect and encourage entrepreneurs' profit rights, and the more open it is to the external economy, the higher the value of its "currency". This can be explained by the improvement of welfare by investment opportunity curve K and international money market M 3) The more stable the macro political and policy environment of an economy is, the higher the value of its currency will be. This is because the highly unstable social and political environment makes the expected discount value of "future purchasing power" greatly depreciate, which is equivalent to recing from the straight line L to the straight line g. "we have not entered Mendel's world yet", but our world, or any world with "money", still follows the law of "purchasing power parity" of money and can still have "monetary behavior", And the economic analysis schema that describes these behaviors, and in this sense, we are in the same "currency" world as Mendel. But I agree with Fan Gang's proposition: we have not entered Mendel's world yet
we have not yet entered a fully monetized and fully open world economic system. This proposition implies two questions: (1) should we enter Mendel's world 2) How do we get into Mendel's world? For economists, if "social welfare function" is given, then these two problems are economic problems; If there is no established social welfare function, then only problem (2) is an economic problem, and problem (1) will become a "political economy" problem.
in a world without "exchange" at all, money cannot represent any opportunity. In a world with "exchange" but not entirely "equivalent exchange", money, to some extent, represents an opportunity for welfare improvement. In a world that can be regarded as "equivalent exchange", the opportunity represented by money depends on the degree of "monetization" of the world economy. In a highly monetized economy, the value of money will further depend on the openness of the economy to other social economies. Generally speaking, the larger the number of people participating in the "equivalent exchange", the higher the value of the opportunity represented by money. So the value of money depends on the scope that Hayek said "the expansion order of human cooperation" can expand
in any case, given the scope of an indivial's world, the opportunities represented by money in the hands of an indivial are limited. Let's further study the indivial consumption behavior (consumption function is the starting point of macroeconomics). The basic consumption behavior, which is meaningful to macro issues such as interest rate, investment and inflation, is a decision-making process for consumers to allocate consumption materials along "time". The simplest analysis model of this process is the so-called "two period consumption model", as shown in the illustration: in the illustration, P stands for "current purchasing power", f stands for "future purchasing power", and indifference curve family represents the decision-maker's "preference order" in the trade-off between consumer goods represented by "current purchasing power" and consumer goods represented by "future purchasing power". Like the usual analysis of microeconomic behavior, if the line L is used to express the future purchasing power generated by the current purchasing power e retained in the future (in other words, the slope of L includes the rate of return on "savings"), then the equilibrium point of consumption will be realized at a (corresponding to the welfare level U2); If, for some reason (inflation, lower monetization, the implementation of the "quota" system...), the rate of return on "savings" falls to the level represented by the line g, then the equilibrium point of consumption will move to a lower welfare level point B (on the curve U1), Corresponding to larger current consumption and smaller future consumption (that is, the decline of macro "saving" rate); If we take into account the "investment" opportunities and the openness of the economy, then the future consumption opportunities represented by the saved current purchasing power will no longer be expressed in a straight line
according to the investment theory initiated by I. Fisher, investment opportunities (arranged according to the rate of return on investment) should be represented by the curve K, while the equilibrium point of consumption and savings (investment) will be represented by C. It is clear that equilibrium point C represents a higher level of welfare (U3) than points a and B. In a more complete market economy, the value of the purchasing power of money can be further improved. For example, when indivials are allowed to freely enter and leave the "lending market", the rate of return on savings is often much higher than the interest rate of bank deposits. This can be expressed as a straight line M. the part of m that exceeds the current purchasing power represented by point e represents the current purchasing power that indivials can borrow from the market (corresponding to the point on the P-axis to the right of point E). Now, the optimal or balanced "consumption saving investment loan" behavior must be represented by a group of points instead of a single point. First, along the investment opportunity curve K, we move from point e to point D1, dect the amount needed for this investment from the current purchasing power e, and then take part of the remaining purchasing power to the lending market to "lend", so as to move to point D2, the rate of return on investment plus the rate of return on lending purchasing power in the lending market, The future consumption is greatly increased (the amount on the F-axis corresponding to point D2), and the indifference curve of point D2 represents a higher welfare level (U4) than other equilibrium points
now let me extend several Institutional Implications from the above analysis: (1) the higher the degree of monetization of an economy, the higher the value of its "currency". This has been illustrated by the welfare improvement resulting from the transition from line g to line L 2) The more investment opportunities an economy creates, the more determined it is to protect and encourage entrepreneurs' profit rights, and the more open it is to the external economy, the higher the value of its "currency". This can be explained by the improvement of welfare by investment opportunity curve K and international money market M 3) The more stable the macro political and policy environment of an economy is, the higher the value of its currency will be. This is because the highly unstable social and political environment makes the expected discount value of "future purchasing power" greatly depreciate, which is equivalent to recing from the straight line L to the straight line g. "we have not entered Mendel's world yet", but our world, or any world with "money", still follows the law of "purchasing power parity" of money and can still have "monetary behavior", And the economic analysis schema that describes these behaviors, and in this sense, we are in the same "currency" world as Mendel. But I agree with Fan Gang's proposition: we have not entered Mendel's world yet
we have not yet entered a fully monetized and fully open world economic system. This proposition implies two questions: (1) should we enter Mendel's world 2) How do we get into Mendel's world? For economists, if "social welfare function" is given, then these two problems are economic problems; If there is no established social welfare function, then only problem (2) is an economic problem, and problem (1) will become a "political economy" problem.
8. Value measure is the most basic and important function of money, that is, money acts as the measure to show and measure the value of all other commodities. The quantity of commodity value depends on the length of social necessary labor time. Here, social necessary labor time is the internal measure of commodity value. But under the condition of commodity economy, the amount of commodity value can not be expressed directly by labor time, but only by currency as the representative of value. During recess, money performs the function of value measure, which is actually the external value measure of commodity value. The value of a commodity expressed by a certain amount of money is the price of the commodity. In other words, price is the monetary expression of value. The reason why money can act as a measure of value is that money itself is a commodity and also has value, which can be used to measure the value of other commodities
currency performs the function of value measure through price standard. In order to measure the size of all kinds of commodities, money itself must first determine a unit of measurement, that is, to technically determine a certain weight of gold or silver as a monetary unit, such as Jin, Liang, Qian, Fen, etc. The unit of money that contains the weight of a certain metal is called the price standard. Different countries have different monetary units of measurement, so there are different price standards. For example, in the history of our country, "Liang", "baht" and "Wen" became the main monetary units, that is, the price standard. In Britain, the monetary unit is mainly the pound. Price standard is not an independent function of money, but a technical regulation derived from the function of value scale. Although the function of monetary value measure is realized by means of price standard, they are different categories. The difference lies in: as a measure of value, money is the embodiment of social labor condensed in goods, while price standard is the unit of measurement of money
at first, the relative value of a country's currency (paper money) was determined by the country's gold reserves, which we call the gold standard system. This situation began in the 15th and 16th centuries when paper money appeared in the world and lasted until the middle of the 20th century. At that time, when there was more gold in that country, the currency of that country was valuable - whether it was metal coins, bank notes or paper money. In fact, when our world enters the era of instrialization, that country has more energy, and its currency will become more valuable. This is the situation in which the currencies of oil procing countries in the Middle East are formed
after the Second World War, e to the most powerful economic power of the United States, the dollar and gold were forced to be pegged to a fixed exchange rate of one ounce of gold to 28 US dollars, and other currencies were also pegged to the US dollar (in fact, they were pegged to gold), which formed the Brighton forest monetary system, that is, the global monetary system with the US dollar as the main body
after the 1970s, with the economic recovery of western countries, the Bretton Woods monetary system collapsed, and the floating exchange rate system replaced the fixed exchange rate system. In the beginning, the exchange rate of a country's currency changed in the price of the Bretton Woods monetary system according to the demand of international trade. Later, people thought that this was not in line with the needs of national or regional economic development, so purchasing power parity was used to determine the exchange rate of currency. Of course, the theory of purchasing power parity can only theoretically explain the exchange rate of currency, and the market exchange rate is another thing. Therefore, after the mid-1980s, the theory of purchasing power parity was replaced by the neoclassical trade theory (trade The interest rate difference and the comprehensive evaluation of the central bank's bill volume
all the above are theoretical pricing of exchange rate
in the mid-1970s, the financial market transaction theory was rapidly established, which includes the redefinition and practical verification of the efficient market theory (market Inclusive Theory), the establishment and practical verification of the option pricing theoretical model, as well as the management theory of modern banking and global finance. At this time, the market exchange rate was determined, It often depends on two aspects:
1. The currency issuing authority's mandatory exchange rate pricing and the allowed fluctuation range in this pricing, such as RMB, new Taiwan dollar, Hong Kong dollar, Malaysian ringgit, Argentine Peso, etc. Although these currencies are not negotiable, they still need to be convertible under the terms of trade; As for fully convertible currencies, such as yen, euro, pound sterling, etc., although their issuing authorities do not force the exchange rate and the fluctuation range of the exchange rate, they all have a bottom line. If the bottom line is exceeded, the currency issuing authorities or the closest trading partner government will intervene, The most obvious is the yen. When the yen is close to 100, the Japanese government will intervene. When the yen is over 130, other Asian countries will be unhappy and will negotiate with the Japanese government, or even buy a lot of yen quietly
2. In the market, large institutions and banks decide their exchange rate quotation according to the foreign exchange assets they hold and the market risk, interest rate risk, policy risk and other factors they are responsible for. This is because financial institutions need to ensure the safety and liquidity of their funds. As for profitability, they only consider profitability after ensuring the safety and liquidity, Small institutions and banks decide their exchange rate quotation according to the price they offer to big banks when they evade risks
the bank's quotation is based on its own foreign exchange liabilities (that is, everyone's deposits) and the risk control standard of foreign exchange assets. In order to prevent run or other risks, the foreign currency reserves of banks must be diversified, which brings great market risks to the operation of banks. Therefore, general banks have a risk control limit for each foreign currency they hold, such as 100 million US dollars (risk control limit) ± 10%), 80 million euro (risk control limit) ± 5%), 100 million Swiss francs (risk control limit) ± 15%)... When the holding amount of a certain currency is higher or less than the allowable range of risk control, the bank must make an even offer, so that the holding amount of the currency is within the limit of controllable risk. At this time, the bank will make its own quotation for the currency according to the market price at that time, the market price it wants and the quantity it needs, This quotation may be similar to that of other banks, or far from that of other banks
when the exchange rate of a certain currency is very favorable for the bank, the bank will consider trading the currency at this price. However, e to many problems such as quantity, term and so on, most of the time, the quotations we see in Reuters and blog are negotiation price or intention price. Whether the transaction can be concluded at this price is still unknown
the price quoted by a bank to its customers is often the price that the bank can accept and is easy to level off immediately, and in terms of quantity, it is far less than its own risk control limit in this currency. Once the customer's transaction is too large, the trader will tell you another price
foreign exchange transaction is a price transaction, also known as an agreement transaction. The external quotation of banks is also independent, and the quotation of banks for each customer is also independent. Most of the quotations we see are reflected in the quotation of multiple banks. For the independent indivial of transaction, banks can quote to this indivial indivially, Of course, banks can also quote for a specific group. If you use the quotation terminal of Reuters, you can see that each quotation is followed by a bank abbreviation, which indicates that the bank quoted (inquired) a quotation for the price of the currency to the market at the last moment. If someone responds, the person will contact the bank directly instead of Reuters. Sometimes, after a transaction with a bank, you can see that the bank you are trading with reports a price that is the same as your transaction price (or a difference of 1-2 points) on the terminal of Reuters in a very short time, which indicates that the bank may have to make an even offer because of a transaction with you, Of course, it may also be that when some other bank makes an even offer to the bank, the bank's position is not enough, and it needs to do another transaction with the same (or similar) transaction price as you just made to make up the position. Because the delivery period of block transactions is often 48 hours, we can see the inquiry information between banks in the communication system of Reuters terminal. Sometimes their inquiry is very funny, and they often say & quot; Can I keep this price for a day (or a few hours, a period of time)& quot; And her competitors sometimes answer & quot; Only 12 hours, please make a new inquiry after that; Cold back in the past, always give people a hot face cold buttock feeling. Relatively speaking, the trading volume of the foreign exchange market is large, but every transaction is a black box operation. You don't know the actual and acceptable price of your trading bank, and you don't know the actual and acceptable trading volume of your trading bank. Therefore, we can't count the trading volume through a reasonable mechanism. On the other hand, although the daily trading volume of the whole foreign exchange market is more than US $2 trillion, the vast majority of traders or bidders have the authorization limit of trading quota when they trade. Once their trading quota in this period is insufficient, they will coldly sue you; Now there is no price;, When you make an inquiry to her in five minutes, she will tell you the current price very enthusiastically. Sometimes she will tell you that if you trade several US dollars in this currency, you can also get n points of discount (foreigners' efficiency is high, so they can apply for authorization so soon, but there are still people looking for their flat offer).
currency performs the function of value measure through price standard. In order to measure the size of all kinds of commodities, money itself must first determine a unit of measurement, that is, to technically determine a certain weight of gold or silver as a monetary unit, such as Jin, Liang, Qian, Fen, etc. The unit of money that contains the weight of a certain metal is called the price standard. Different countries have different monetary units of measurement, so there are different price standards. For example, in the history of our country, "Liang", "baht" and "Wen" became the main monetary units, that is, the price standard. In Britain, the monetary unit is mainly the pound. Price standard is not an independent function of money, but a technical regulation derived from the function of value scale. Although the function of monetary value measure is realized by means of price standard, they are different categories. The difference lies in: as a measure of value, money is the embodiment of social labor condensed in goods, while price standard is the unit of measurement of money
at first, the relative value of a country's currency (paper money) was determined by the country's gold reserves, which we call the gold standard system. This situation began in the 15th and 16th centuries when paper money appeared in the world and lasted until the middle of the 20th century. At that time, when there was more gold in that country, the currency of that country was valuable - whether it was metal coins, bank notes or paper money. In fact, when our world enters the era of instrialization, that country has more energy, and its currency will become more valuable. This is the situation in which the currencies of oil procing countries in the Middle East are formed
after the Second World War, e to the most powerful economic power of the United States, the dollar and gold were forced to be pegged to a fixed exchange rate of one ounce of gold to 28 US dollars, and other currencies were also pegged to the US dollar (in fact, they were pegged to gold), which formed the Brighton forest monetary system, that is, the global monetary system with the US dollar as the main body
after the 1970s, with the economic recovery of western countries, the Bretton Woods monetary system collapsed, and the floating exchange rate system replaced the fixed exchange rate system. In the beginning, the exchange rate of a country's currency changed in the price of the Bretton Woods monetary system according to the demand of international trade. Later, people thought that this was not in line with the needs of national or regional economic development, so purchasing power parity was used to determine the exchange rate of currency. Of course, the theory of purchasing power parity can only theoretically explain the exchange rate of currency, and the market exchange rate is another thing. Therefore, after the mid-1980s, the theory of purchasing power parity was replaced by the neoclassical trade theory (trade The interest rate difference and the comprehensive evaluation of the central bank's bill volume
all the above are theoretical pricing of exchange rate
in the mid-1970s, the financial market transaction theory was rapidly established, which includes the redefinition and practical verification of the efficient market theory (market Inclusive Theory), the establishment and practical verification of the option pricing theoretical model, as well as the management theory of modern banking and global finance. At this time, the market exchange rate was determined, It often depends on two aspects:
1. The currency issuing authority's mandatory exchange rate pricing and the allowed fluctuation range in this pricing, such as RMB, new Taiwan dollar, Hong Kong dollar, Malaysian ringgit, Argentine Peso, etc. Although these currencies are not negotiable, they still need to be convertible under the terms of trade; As for fully convertible currencies, such as yen, euro, pound sterling, etc., although their issuing authorities do not force the exchange rate and the fluctuation range of the exchange rate, they all have a bottom line. If the bottom line is exceeded, the currency issuing authorities or the closest trading partner government will intervene, The most obvious is the yen. When the yen is close to 100, the Japanese government will intervene. When the yen is over 130, other Asian countries will be unhappy and will negotiate with the Japanese government, or even buy a lot of yen quietly
2. In the market, large institutions and banks decide their exchange rate quotation according to the foreign exchange assets they hold and the market risk, interest rate risk, policy risk and other factors they are responsible for. This is because financial institutions need to ensure the safety and liquidity of their funds. As for profitability, they only consider profitability after ensuring the safety and liquidity, Small institutions and banks decide their exchange rate quotation according to the price they offer to big banks when they evade risks
the bank's quotation is based on its own foreign exchange liabilities (that is, everyone's deposits) and the risk control standard of foreign exchange assets. In order to prevent run or other risks, the foreign currency reserves of banks must be diversified, which brings great market risks to the operation of banks. Therefore, general banks have a risk control limit for each foreign currency they hold, such as 100 million US dollars (risk control limit) ± 10%), 80 million euro (risk control limit) ± 5%), 100 million Swiss francs (risk control limit) ± 15%)... When the holding amount of a certain currency is higher or less than the allowable range of risk control, the bank must make an even offer, so that the holding amount of the currency is within the limit of controllable risk. At this time, the bank will make its own quotation for the currency according to the market price at that time, the market price it wants and the quantity it needs, This quotation may be similar to that of other banks, or far from that of other banks
when the exchange rate of a certain currency is very favorable for the bank, the bank will consider trading the currency at this price. However, e to many problems such as quantity, term and so on, most of the time, the quotations we see in Reuters and blog are negotiation price or intention price. Whether the transaction can be concluded at this price is still unknown
the price quoted by a bank to its customers is often the price that the bank can accept and is easy to level off immediately, and in terms of quantity, it is far less than its own risk control limit in this currency. Once the customer's transaction is too large, the trader will tell you another price
foreign exchange transaction is a price transaction, also known as an agreement transaction. The external quotation of banks is also independent, and the quotation of banks for each customer is also independent. Most of the quotations we see are reflected in the quotation of multiple banks. For the independent indivial of transaction, banks can quote to this indivial indivially, Of course, banks can also quote for a specific group. If you use the quotation terminal of Reuters, you can see that each quotation is followed by a bank abbreviation, which indicates that the bank quoted (inquired) a quotation for the price of the currency to the market at the last moment. If someone responds, the person will contact the bank directly instead of Reuters. Sometimes, after a transaction with a bank, you can see that the bank you are trading with reports a price that is the same as your transaction price (or a difference of 1-2 points) on the terminal of Reuters in a very short time, which indicates that the bank may have to make an even offer because of a transaction with you, Of course, it may also be that when some other bank makes an even offer to the bank, the bank's position is not enough, and it needs to do another transaction with the same (or similar) transaction price as you just made to make up the position. Because the delivery period of block transactions is often 48 hours, we can see the inquiry information between banks in the communication system of Reuters terminal. Sometimes their inquiry is very funny, and they often say & quot; Can I keep this price for a day (or a few hours, a period of time)& quot; And her competitors sometimes answer & quot; Only 12 hours, please make a new inquiry after that; Cold back in the past, always give people a hot face cold buttock feeling. Relatively speaking, the trading volume of the foreign exchange market is large, but every transaction is a black box operation. You don't know the actual and acceptable price of your trading bank, and you don't know the actual and acceptable trading volume of your trading bank. Therefore, we can't count the trading volume through a reasonable mechanism. On the other hand, although the daily trading volume of the whole foreign exchange market is more than US $2 trillion, the vast majority of traders or bidders have the authorization limit of trading quota when they trade. Once their trading quota in this period is insufficient, they will coldly sue you; Now there is no price;, When you make an inquiry to her in five minutes, she will tell you the current price very enthusiastically. Sometimes she will tell you that if you trade several US dollars in this currency, you can also get n points of discount (foreigners' efficiency is high, so they can apply for authorization so soon, but there are still people looking for their flat offer).
9. The value of M and N currency swaps depends on the (price) factor
on the premise that other factors remain unchanged, the price of goods is inversely proportional to the value of money itself. Generally speaking, without considering other factors, the more valuable the money (appreciation), the lower the commodity price; The lower the value of money, the higher the price of goods
the basic rule of mathematics is multiplication for direct ratio and division for inverse ratio. Similarly, if a country's currency appreciates by M%, then the value of the commodity should be expressed in currency (that is, the price of the commodity) as N / (1 + M%), or division, just change the minus sign to the plus sign
in short, remember "increase, decrease, decrease; Direct multiplication and inverse division. For reference.
on the premise that other factors remain unchanged, the price of goods is inversely proportional to the value of money itself. Generally speaking, without considering other factors, the more valuable the money (appreciation), the lower the commodity price; The lower the value of money, the higher the price of goods
the basic rule of mathematics is multiplication for direct ratio and division for inverse ratio. Similarly, if a country's currency appreciates by M%, then the value of the commodity should be expressed in currency (that is, the price of the commodity) as N / (1 + M%), or division, just change the minus sign to the plus sign
in short, remember "increase, decrease, decrease; Direct multiplication and inverse division. For reference.
10. Monetary value: monetary value
the property of living material worth (often indicated by the amount of money something would bring if solid)
I understand that monetary value is the value of a country's currency in the international market, such as 1 yuan RMB, its monetary value is 0.145293 US dollars, or 0.073518 pounds, Or 0.093078 euro. In a broad sense, money is also a commodity, which also follows the principle of demand. The exchange rate reflects the value of a country's currency, and different foreign currencies reflect their value in different countries
how is the value of money determined? As a measure of value, does the value of money depend on something else? The classical answer to this question is actually very intuitive: the value of a person's "money" depends on the value of the "opportunity" that money can bring to his welfare in the world he lives in
in a world where there is no "exchange" at all, money cannot represent any opportunity. In a world with "exchange" but not entirely "equivalent exchange", money, to some extent, represents an opportunity for welfare improvement. In a world that can be regarded as "equivalent exchange", the opportunity represented by money depends on the degree of "monetization" of the world economy. In a highly monetized economy, the value of money will further depend on the openness of the economy to other social economies. Generally speaking, the larger the number of people participating in the "equivalent exchange", the higher the value of the opportunity represented by money. So the value of money depends on the scope that Hayek said "the expansion order of human cooperation" can expand.
the property of living material worth (often indicated by the amount of money something would bring if solid)
I understand that monetary value is the value of a country's currency in the international market, such as 1 yuan RMB, its monetary value is 0.145293 US dollars, or 0.073518 pounds, Or 0.093078 euro. In a broad sense, money is also a commodity, which also follows the principle of demand. The exchange rate reflects the value of a country's currency, and different foreign currencies reflect their value in different countries
how is the value of money determined? As a measure of value, does the value of money depend on something else? The classical answer to this question is actually very intuitive: the value of a person's "money" depends on the value of the "opportunity" that money can bring to his welfare in the world he lives in
in a world where there is no "exchange" at all, money cannot represent any opportunity. In a world with "exchange" but not entirely "equivalent exchange", money, to some extent, represents an opportunity for welfare improvement. In a world that can be regarded as "equivalent exchange", the opportunity represented by money depends on the degree of "monetization" of the world economy. In a highly monetized economy, the value of money will further depend on the openness of the economy to other social economies. Generally speaking, the larger the number of people participating in the "equivalent exchange", the higher the value of the opportunity represented by money. So the value of money depends on the scope that Hayek said "the expansion order of human cooperation" can expand.
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