How terrible is currency depreciation and expansion?

Mild currency depreciation or inflation is conducive to economic growth. Conversely, if the severe currency depreciation or inflation is very terrible, how terrible is it? Analysis below.
What is currency depreciation?
The currency depreciation is that the money is not so valuable. As the price rises too fast, the currency purchasing power continues to decline. Similarly, the goods need to spend more money to buy.
What is inflation?
This inflation actually refers to the currency over issuance, that is, a large amount of currency supply to the market, which directly allows the market to have a lot of money, thereby pushing up prices, directing the currency to depreciate, and the continuous decline in the purchasing power of the currency.
How is the devaluation of the severe currency?
It, serious currency depreciation means that the purchasing power of the currency is significantly reduced, and the cause is caused by the rise in prices too fast. The rise in prices is too fast, and it will directly allow everyone to collect it. If this situation continues, everyone's life is very tense, which will cause a series of problems.
A economic growth rate will definitely decline rapidly. The decline in economic growth indicates that the economy is going downhill. If the decline reaches a certain degree, the most terrible thing happens, it will lead to the economic crisis. All know.
How is severe inflation?
The is actually a significant reduction in currency purchasing power. The reason is that the price of the currency is too fast, the price rises too fast, and the value of the currency depreciation will also cause everyone to collect the support, which will directly affect the economy, which will directly affect the economy, which will directly affect the economy, which will directly affect the economy, which will directly affect the economy and directly affect the economy. Growth rate leads to the emergence of economic crisis.
The means of severe currency depreciation and severe inflation. In fact, the meaning is the same. Due to the rise in prices, the purchase power of the currency decreases. If it continues to deteriorate, it will lead to the emergence of the economic crisis. This is the most terrible consequence.
How is the economic crisis?
The is afraid of the economic crisis. How terrible is the economic crisis?
The following analysis:
(1) In the economic crisis, many small and medium -sized enterprises will have the phenomenon of bankruptcy and failure, followed by small and medium factories, and there will be a wave of losing.
(2) The company's bankruptcy, the failure of the factory, etc., will cause more people to lose their jobs and make more people lose their income. One person or family loses income, the quality of life of individuals or families is reduced, consumption power has decreased, and even some people or families do not even have life security.
(3) The economic crisis will trigger the financial crisis. The financial crisis will cause bankruptcy and failure of financial institutions. At the same time, it will also cause major financial products to kill major financial products, which will cause significant financial assets to shrink. Similar real estate, stocks, funds, bonds, etc. shrink.
(4) Economic crisis will lead to rising prices, and currency depreciate sharply. Especially for food in food, there will be shortage of food. Many goods will have supply in short supply, and it will be expensive.
(5) In addition to the above phenomena, there will also be a personal crisis and family crisis due to unstable life. Many people can't eat well and don't wear them well.
The above is a large negative impact brought by a economic crisis, which will directly affect everyone's food, food, housing and transportation, and affect the quality of life of everyone's eating, drinking, and sleeping.
The comprehensive analysis can explain that the mild currency depreciation or inflation is a good thing. It will help the development of the economy and stimulate everyone to do it. However, if the currency depreciation is too fast, it will cause economic crisis and cause financial products, which will bring a lot of terrible things.

1. Inflation is the periodic regulating inflation of the economy, which is essentially too much currency supply. When the currency supply on the market is too much, it will depreciate.
In 1978, if you have 30 yuan in cash in your wallet, then congratulations, at least you can be regarded as a person with a certain value. Get these money, you can buy 99 pounds of rice, 12 pounds of pork and 10 pounds of edible oil at state -owned stores. This pile of things is estimated that a shopping cart can not be installed. In contrast, if you want to buy the same more products with 30 yuan, I am afraid it will be a little idiot. 30 yuan, perhaps you can only buy 5 catties of rice, 1.5 catties of pork, and 1.1 catties of consumption oil in the supermarket, and these only need a small environmental protection bag to install it. The same amount of money, in different ages, the number of goods purchased is more than ten times, which is equivalent to secretly slipping away in the virtually.
The main cause of this contrast is the soaring price. From another perspective, it is also worthless money, that is, the higher and higher prices secretly open your wallet. When you have no consciousness, like an ant moving, you can transport your wealth to him a little bit. Your wallet is really "cut". After the Spring Festival 2010, we can feel that the price of daily necessities around us is quietly looking up.
Especially after May, the prices of agricultural products such as garlic, mung beans, corn, etc. are "relay": in early 2010, in Shandong, the main garlic producing areas across the country, the price of retail garlic rose by more than 40 times to reach 9 yuan per kilogram. about. In some large cities such as Beijing, the price of garlic in some supermarkets is even as high as more than 20 yuan per kilogram. In May 2010, mung beans received the "price increase" of garlic and became "crazy beans". The average wholesale price was 5-6 yuan per kilogram to 16.4 yuan, and at the highest rose to 19.95 yuan per kilogram.
In late June 2010, the retail price of ginger showed a rising trend, and the price increase significantly accelerated. It had risen to 12 yuan per kilogram in August.
On August 17, 2010, the Ministry of Commerce of China announced that the average wholesale price of 18 kinds of vegetables monitored in July rose 49.7%simultaneously. At the end of 2010, there were new data. In early November, the average wholesale price of 18 major vegetables in 36 large and medium cities across the country was 3.9 yuan per kilogram, an increase of 62.4%over the same period in 2009. Earlier, "1 yuan" vegetables are extremely common. Now, if you want to buy cabbage that previously discussed the kucks at a price of 1 yuan, I am afraid that it has become a delusion.
Ilads to highlight the improvement of their status with high prices that people are not adapted, and other products are not doubtful. On the runway of price increases, everyone has full horsepower and scrambled. According to the statistics of Ganji.com, compared with 2009, the cost of rent in Beijing has increased by 25%year -on -year, and the average rental price is 3,000 yuan. In addition, the average increase in rent prices in Shanghai, Shenzhen, Guangzhou and other cities also exceeded 10%.
In 2019, the most obvious is the price of pork, more than thirty pieces per pound, which is three times more than last year!
, in general, inflation occurs at a relatively good stage of economic development. The currency circulation is fast and the growth rate of foreign trade is good. Therefore, it is good for the economy. Proper inflation can stimulate people's consumption, buy houses, buy gold, and buy products needed for other life. Like the United States, many people live in borrowing, but the life of Americans is so good, forming a good consumer market
2. Extremely inflation can cause the economy to collapse. Everyone who has studied economics knows that the Tulip bubbles of the Netherlands, the real estate bubble in Japan, and the fiat currency bubble of the Kuomintang of the Republic of China are extremely inflation, and people's lives are not as good as death.

The inflation of more than 1500%in China in 1947, and Indonesia's inflation rate in 1966 exceeded 900%. Even in Asia's "small tiger economy", Singapore and Taiwan Taiwan had a far higher inflation in the early 1970s. It is not surprising that Africa has a worse record. Angola's inflation rate in 1996 exceeded 4000%. By 2007, Zimbabwe's inflation rate had risen to 66,000%, which made it surpassing the inflation records that surpassed the Poverty of the Congo Republic (a poverty -stricken development with the international capital market. The country is not included in our samples. Since 1970, there have been three malignant inflation events since 1970. I don't know how much people starve to death.
European experience includes large post -war malignant inflations studied by Cagan. Even aside from malignant inflation, Polish, Russia (Soviet Union, Russia) and Turkey have also occurred in high inflation most of the time. In contemporary, we may not think that Nordic countries will have large -scale inflation problems. But they also had high inflation before.
For example, the inflation rate of Norway in 1812 reached 152%, the inflation rate of Denmark in 1800 reached 48%, and the inflation rate in Sweden in 1918 reached 36%. . Latin American countries' history of inflation after World War II is particularly spectacular. As shown in Table 12-3, in the 1980s and 1990s, they had multiple vicious inflation in peacetime.
n n n n R n These inflation allowed the middle class of its country to return to the poor overnight, making people's livelihood better than death, which is very scary!

It to inflation, there will be different causes, for example, the price of basic raw materials, the price of basic raw materials The rise will drive the price of other products. Typical is that the rise in oil prices will cause a series of price increases, and the rise in agricultural products will also cause price increases.
The inflation will also be caused by increased liquidity, issuance If there are too many currencies, the money is not worth the money.
. That will also be due to the rapid economic development, the increase in wages, the more money in the hands, and the demand is strong, which will cause the price to rise. Inflation is a bad thing, and it is terrible.
If inflation rate and economic growth are consistent, but the scene of economic prosperity.
. When the economy is overheated, the inflation is severe , Usually regulate it through financial and currency policies.

Therefore, as long as inflation is within a reasonable range, there is nothing terrible. The influence of various factors of the external environment causes the inflation rate to exceed the controllable range, and finally leads to economic collapse. R n The other typical case is Zimbabwe, a currency with a value of hundreds of millions of faces, and you can't buy anything.
This is a very severe situation, which is a disaster for ordinary people. Because the money at hand is completely lost at hand, the money at hand is completely lost at hand After purchasing power, wealth will shrink sharply, and even life is unsustainable.
Let's take a look at how much money is worth the current 1 million years. According to the inflation rate this year After 10 years, how much is 1 million left. The inflation rate this year is about 3%. According to this standard, it is calculated at 100/(1 3%)^10 = 74.409, so it is about 740,000.
So if we want to resist inflation, we must understand financial management. It is easier to win inflation through financial management. The financial plan I suggest is to divide your funds into three parts of the following three wealth management products:
1. Investment stocks
It if you have a lot of free time, you can also learn stocks. Essence Many people usually do not speculate in stocks, and then fry when the so -called bull market comes, but often such people lose their stocks the most.
Because the stock market is a speculative market, you don't want to spend some time research, and it is basically impossible to make money. Usually spend more time to understand the stock market, so after several years of accumulation, it can reach a certain level. If you are lucky, you will have a bull market, maybe stock trading can allow you to directly achieve financial freedom.
2. Fixed investment public offering funds
The fixed investment public offering funds. At present, there are thousands of public fund funds in the market. To find a good fund, it is necessary to think about it. It can be screened from the fund ranking.
The fund has the main stock type, mixed type, debt type and currency funds, and the risks are gradually decreased. Stock funds are relatively risks, but their income is relatively high, so it is suitable for people with strong risk tolerance. If the risk tolerance is low, you can consider investing in some hybrid and debt -type funds.
If you are still young and have strong risk tolerance, you can focus on investing in stock funds. Purchasing funds should adopt a fixed investment method, which can reduce risk. Because the fund will have a long callback period, if you buy it at one time, it may cause a lot of losses in the process of callback.
is generally suitable for fixed investment for two weeks to one month. It is too frequent or the cycle is not good. Once the fund is fixed, do not rush to sell losses. Generally, the fund can win the index.
3. Regular deposits of deposit banks
In addition to stock trading and purchase funds, some funds can be used to purchase regular deposits of banks, so that the annualized 4%return is almost the same. The funds of this part are mainly for the urgent use of money, so it is still possible to deposit for six months, and it will be fixed again when it expires.
The annualized earnings of about 10%through the above financial management plan, it is easy to implement, so that you can win inflation.
Remember that when he was a child, at the house of Taiyu, he saw some flowers on the wall, on the ceiling, and some furniture. I feel a little fun, so I asked too much: "What is this, it's pretty good." Tai Yan looked at me and smiled, saying, "These are all money, golden coupons, and several sacks, enough for tens of billions of yuan."
Is I heard it, even more puzzled. Although I didn't feel much about money at that time, I also knew that money can be bought for fruit sugar, which is a good thing. So I asked further: "Tai is a concubine, since it is money, why did I get the wall?", Tai Ying put away a smile, sighed, and said, "These are all the money in the past, and now it is not useful to use it now. "
P. This is probably the hazy impression of the devaluation of currency and inflation in my life.
The Golden Coupon Incident knows that it is a scraper made by the authorities on the eve of liberation. As a result, the prices were soaring and the currency depreciated. With the liberation of New China, it finally became a bunch of waste paper. Helpless people could only use it to paste the wall.
Inded in life, did we feel the depreciation of currency and inflation? The terms of inflation and currency depreciation seem to be very professional, but they actually happen to us. In daily life, we are always feeling the impact of economic changes to us.
In this year, the most deepest thing we feel is pork, and the price is almost doubled. I was chatting with a friend yesterday. When talking about pork, he said that he didn't know the meat for a long time. Although it is joking, it also shows that the price of pork still exceeds people's general purchase capabilities.
The people who often go to the vegetable market and supermarkets will find that the eggs suddenly increased in a day. The day before yesterday was 3.5 yuan, and today it was 5.0 yuan. There are also some of other items consumer in daily life, which say that the price increases the price increase. The image of the people is called "Garlic You", "Ginger You", "Scraping the Wind", etc., to express the helplessness of "money is not valuable".
. The other has a profound impact on us, and the price of houses has increased by 10 or twenty times in ten years. Many people who want to buy a house a little hesitated. It was enough to buy the second ring house and could only go to the Sixth Ring to buy it. In the morning, I was enough to buy a three -bedroom room. In the afternoon, I could only buy a two -bedroom room, or even a bedroom. I believe many people can feel the same.
Of course, in life, we will feel the fluctuations of prices from time to time, some are normal fluctuations, and some are abnormal fluctuations. So what exactly is currency and inflation?
What is inflation? Simply speaking, the inflation is "money is not valuable".
How is inflory and what are the consequences? From the perspective of several domestic inflation, the cause of inflation is that the central bank exceeds currency, which has caused money to be worthless.
The consequences of inflation are usually the following:
If first, private small and medium -sized enterprises occur in the tide of closure
This results caused by several times of inflation is a large number of private enterprises in some areas closed down. Especially in the Jiangsu and Zhejiang area, news of private enterprises' failure is put into newspapers from time to time. The trend of corporate failure brings a rise in population unemployment, affecting the lives and survival of thousands of families, which has an impact on the safety and stability of society.
It, the capital market is turbulent, devouring middle -class wealth
The early stage of inflation, due to the increase in currency supply, it will increase the increase in the capital market. As inflation intensifies, the stock market has rapidly soared to a high position to a high position. Investors flocked in, and the aunt who bought food rushed to the trading room.
But the good show did not start, it came to an end, and the stock market then stunned thousands of miles. How many investors have lost their blood in an instant. Countless middle class became the proletariat overnight. A large number of social wealth was swallowed ruthlessly.
. Third, the price soaring, currency depreciation
The most direct result of inflation is the soaring price and the depreciation of the currency. Take a few examples of currency depreciation in different countries:
In Germany
The First World War, Germany experienced a speedy inflation, a newspaper rose from 0.3 marks to 70 million marks in three years, of which It rose from 2,000 marks to 70 million Mark a month. Is it very shocking!
Russia
During the civil war from 1921 to 1922, the inflation rate was as high as 213%; in 1992, the inflation rate of the former Soviet Union reached a level of 2520%. Essence
Zimbabwe
In Zimbabwe, the currency is not the discussion, but the discussion. It requires a scale to buy things. Zimbabwe is the country with the largest millionaires in the world, but the poorest country. In 2008, Zimbabwe's inflation rate was 2.2 million%.
It taxis in Zimbabwe, even if you pay for 50,000 yuan in money, the time of counting the banknote is similar to the time of the car. Go to the restaurant for dinner.
The feeling of being robbed
Micro -inflation is conducive to economic development, but severe inflation will affect economic development. It is far from the period of the Kuomintang. As long as 10 yuan, it may be 100,000 to buy a pound of rice tomorrow. If you buy another pound of rice the day after the day, you may have to loan banknotes. In 1948, the civil war entered the turning stage. On the 19th, the price index of Shanghai was equivalent to 5.71 million times before the war! Intersection Intersection The inflation rate has reached 571000000%! In fact, there are more than these people's biological materials. In 1948, the banknotes had reached the point where a sack of banknotes could not be bought for a pound of rice, and the people suffered. Looking at Venezuela, the inflation rate of Venezuela in 2016 reached an amazing 481.5%, and in 2018 reached an amazing 1698488%. The paper bit currency was worth it. The Venezuela government had to erase the newly issued currency.
What is currency depreciation? Assuming that the total currency around the world is 1,000 yuan, there are a total of 1,000 bananas, and the price of each banana is 1 yuan. In order to implement a loose monetary policy next year, the currency began. %, Our money can buy 1 banana last year. This year may only buy half, so there are two ways to make our purchasing power unchanged. 100%.

This of the depreciation of currency depreciation of the currency led to a decline in the purchase power of the currency. The wealth in the hands of residents was deprived of. The 10,000 yuan households in the 1980s were very rich. From the perspective of residents, it does not want to have currency depreciation, because the depreciation of currency means that the purchasing power of the cash in the hand will decrease and wealth will become less. money. According to the issuance of M2, the compound annual depreciation of the currency exceeds 6%, which means that our wealth compound annual growth growth must reach 6%, so that we can achieve the positive return of wealth in the depreciation of our currency. For ordinary people, there are only real estate.

If inflation is the poor of the poor, and the poor people's life is getting sad, because the poor people have a little bit of savings are all cash, and the inflation is worthless. I can buy a tire. The rich has a lot of physical assets. The physical assets are not afraid of inflation. Therefore, the most terrible inflation is that the poor are getting poorer, and the rich are getting richer and richer
In the final analysis, inflation is to test the management ability of the ruling authorities. Inflation will affect social stability, affect the panic of the people, anxiety, nervous, right, right, right, right Reality dissatisfaction affects the hearts of the people.
has a country called Zimbabwe. If you bring Zimbabwe 1 million trillion, how much can it be worth it? The answer is 2.5 yuan. If a piece of real money can't buy an A4 paper, Zimbabwe's economy is directly paralyzed. The government was helpless and finally chose to settle with the dollar. However, due to the recent interest rate hikes and shrinkage, the US dollar has begun to develop inflation in Tianjin, and the Tianjin government is considering using RMB for settlement.
The severe inflation will directly lead to the collapse of the national economy. Due to the collapse of the currency system, the national economy will degenerate into an era of objects, and even the economy will be controlled by other countries and cannot extricate themselves.
The important reason for the strong currency is the strong economic foundation, severe inflation, and it is likely to appear in the country with its own core technology and products. Most domestic products depend on imports and continue to trade. The deficit, just like Zimbabwe, even imported toothpicks, can be said to form a vicious circle.
has a saying in China, but it is too late. In fact, in the case of the basic market for the national economy, moderate inflation has a promotion effect on the economy. Because only when people realize that it is impossible to create wealth, they can do nothing after they are creating wealth, and set a lifetime, and the wealth created will create new wealth over time. However, once the speed of depreciation exceeds expectations and we will not be able to keep up with the depreciation of the currency, then people in this country will lose confidence and form a vicious circle.
Therefore, super -expected inflation is a major blow to the national economy, and moderate inflation can make the economy continue to be full of vitality. The most fundamental is that the development of the real economy can stabilize inflation expectations.