Foreign media: developed countries embark on the road of currency tightening

Reference News Network reported on August 21. According to the "Japan Economic News" reported on August 20, the continuous expansion of funds began to decrease with the spread of the new crown epidemic in 2020. This is because inflation has become a world issue, and countries are absorbing funds by ending the new crown epidemic fund assistance, tax increase and financial tightening. After the new crown epidemic, the prices of risk assets such as stocks and commodities continue to rise, and currency tightening may become a turning point in these risk assets.

According to the statistics of Economic Organizations (the seasonal callback), the narrow currency supply (M1) turned to decrease after three years in April 2022. Specifically, the M1 here refers to the currency that can be used at any time at any time. It also decreased in May. This is the first time that M1 has decreased for the first time since 1980.

Before and after the new crown epidemic, the total amount of M1 expanded more than doubled. The biggest factor is the fiscal policy of various countries. In order to cope with the stagnation of economic activities, the government issued cash to maintain employment and provides unemployment subsidies, coupled with interest -free loans, etc., the funds flowing into the real economy surged. The quantitative easing policies implemented by the central banks such as the Fed and the Bank of Japan have also played a stimulating role.

It is reported that the reason why the current currency begins to decrease is that countries are anxious to deal with inflation. In addition to the supply restrictions caused by the popularity of the new crown, inflation is largely caused by increased funds. The central bank's interest rate hikes and quantitative tightening have the effect of slowing "currency creation". "Currency creation" refers to the increase in funds such as bank loans. If bank loan interest rates rise through policy interest rate hikes, the difficulty of raising funds for enterprises and individuals will increase.

Broad currency supply (M2) including M1 and regular deposits (M2) is expected to continue to increase. However, the "actual M2" that the United States excluded inflation in June decreased by 1.4%month -on -month, and the decrease was a high position since August 1973 (about 49 years). The more broad currencies, the longer it takes it to absorb it. The decrease in M1 in developed countries can be said to be the initial movement of the formal decrease in funds in the future.

The focus of the future is the impact of risk assets. The expansion of funds is directly related to the soaring assets.

Tang Kami Daisuke, chief market economist of Ruisui Bank, pointed out: "Fund contraction may be a turning point in risk assets that are rising during the new crowns. ","

It is reported that the funds that support risk assets such as stocks and goods are now declining, and the market is cautious and increasingly rising.

A clothing store in Tokyo, Japan is in promotion (Agence France -Presse)

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