According to the latest data, apart from the fact that the Federal Reserve is reducing its holdings of US debt,WinningatcrapsMost of him is increasing his holdings of US debt. According to the chart, foreign holdings of US debt have been increasing in the past six quarters. At the same time, the debt of governments around the world is also growing. America's government debt has grown from less than $10 trillion during the subprime crisis to more than $30 trillion now. China's government debt ratio also shows a rising trend. European countries face a similar situation. Debt growth matches the level of economic development.
The amount of money also matches the level of the economy, and only when the economy continues to grow, the amount of debt and money will continue to grow. Therefore, the key lies in economic growth and debt repayment. Evergrande can maintain normal operation when it owes 100 billion yuan, and it will be fine at 2 trillion, but when the debt increases to 2.WinningatcrapsAt the time of .5 trillion, the company was in trouble. Similarly, Vanke's life is not easy, but as long as the money can be repaid on time, the form of debt does not matter. However, it should be noted that money is borrowed to create money, and money is repaid to destroy it. In the transmission mechanism of money, borrowing and financing has always been a factor to promote economic activity, which has also led to the continuous increase in the number of money. Therefore, China's M2 money supply used to grow rapidly in the past, which is closely related to the rapid economic growth.
However, China's currency is mainly derived from borrowing, so when economic growth slows, the debt problem will bring great pressure. But if the central bank could provide backing for finance and government bonds, the situation would be different. Finally, let's consider a question: since the central bank provides fiscal backing so effectively, why can the United States do so, while we should restrict or even write it into the banking law and not allow the central bank to provide direct financial support?