Xu Jia money printer

* * Original by Liu Jiaolin * *

Among all macroeconomic indicators, the size and growth rate of debt are top priorities. For the top two global economies, China and the US, there are different concerns. People are concerned about America's treasury debt, and are worried that it is growing too fast and repeatedly breaking through limits. People are concerned about China's social finance (social finance), and are worried that its growth rate is declining and sluggish.

Today's fiat currency system has long since moved from hard currency such as gold as anchor to debt as endorsement. This is the credit-debt monetary system. Debt (debt) is credit (credit), credit is debt, or in other words, you have to have credit to be eligible for debt. Conversely, your successful debt indicates that your credit is recognized by society.

If you have a credit or not, it expires and is voided. Every game starts here.

Under the credit-debt monetary system, the principle of banknote printing (currency issuance) is to find an entity with social credit and make him take on debt. For every dollar he owes, he can issue a corresponding 1 yuan note. Similarly, when he pays off this 1 dollar debt, he must also eliminate 1 dollar of currency in order to maintain balance on his balance sheet.

The principle is the same, and the mechanism is different. US banknotes are printed by the US government as the credit subject, and treasury bonds are issued by the Bank of America — that isFederal Reserve, print out a certain amount of dollars to cover these debts. This is a simplified model. In fact, the US government (Treasury) and the Federal Reserve are separated by a market, and the operations at both ends are staggered and will not stay in sync, so we will see that recently Yellen is issuing debt while Powell is downsizing. In China, banknotes are printed by the residential department as the credit subject, and the commercial bank evaluates the credit limit and then prints a certain amount of RMB to correspond to this loan (debt). Here we have examined only one of the largest ways of generating debt money, the real estate sector. As for the above two models, we haven't introduced too many details of the banking system's balance sheet, and have ignored other debt methods and subjects, so please note that they are not complete.

In the American model, government debt, financing money, is used for government expenses (mainly interest payments, foreign military aid, social benefits, etc.). In the Chinese model, the buyer's debt and financing money were given to real estate agents for consumption and expansion (reinvestment) of the business.

In the US, the Federal Reserve is a money printer. In China, every real estate company is a money printer. This is the Zhao family money printer, this is the Li family's money printer, this is the Yang family's money printer, this is the Xu family's money printer,...

Borrowing money to increase debt is called increasing leverage. The entire society will have more money in circulation. Currency inflation, and in severe cases, it is called a flood of liquidity. Repaying money and reducing debt means deleveraging. The amount of money circulating in society as a whole will decrease, and currency deflation. In severe cases, it is called a liquidity crisis.

The symptoms of excessive liquidity are treatable; it is enough to introduce policies to suppress borrowing. What is difficult to deal with is a liquidity crisis. They don't want to get into debt, and if they have money left over, they have to repay loans early, which is bad — at least for the financial industry, because you can't get rid of your hair without wild animals.

Deflation is also bad because one person's expenses are another person's income. If people don't spend because of lack of money, many people won't be able to eat. This principle can be viewed on the video science of Qiaoshui Fund Dario introduced in the 2023.8.23 article “China's Deleveraging” by Teach Chain.

As for the American model, social deflation, the Federal Reserve can print money to make up for this liquidity gap. As for the Chinese model, social finance is poor, and Yang Mama can't print money to fill the gap like the Federal Reserve — because Yang Mama doesn't know how to print money.

As explained in the 2023.8.21 article “Artificial Prosperity: The Great Transfer of Wealth” by the Education Chain, the operation of the US model transfers the debt of the residential sector to the federal government through the three links of “Federal Reserve Printing - Treasury Issuance - Government Payment”, and cooperates with the federal government to instigate geographical conflicts abroad to plunder overseas wealth, thus completing the wealth transfer process of “Overseas Wealth - US Wealth - US Residents' Income”, creating a prosperous and prosperous “world economy in recession, America's unique landscape”.

Xu Jia's banknote printer is not comparable to the Federal Reserve's banknote printer. The money printing machine in the Xu family consumes batteries from local people. If it runs out of fuel, the money printer will not be able to print money even if it runs out of fuel; if there is an opportunity, it will also secretly transport wealth overseas, spilling oil while refueling, which is very inefficient. The Federal Reserve's banknote printer, on the other hand, relies on the US military and Wall Street to collect dry batteries from around the world and carry overseas wealth to the US. As long as they can catch fat boys, it's enough to eat a wave of leeks from the East, and next time to eat leeks from the South. This gives chives from other plots enough time and space to recuperate and thrive.

Those who are full of Luo Qi are not silkworms.

* * Original by Liu Jiaolin * *

(Official account: Liu Jiaolin. (Knowledge Planet: Reply to “Planet” on the official account)

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