Issuance of new money for the Olympic Games

"The high level of inflation, the central bank decided to new money, 60 million of new money supply to the market, this is definitely a bad decision. Although Qian Buduo, but the problem is that this money is to move the Olympic Games, To the market will send a wrong signal. Aspect is the tightening of reserve, and another one of the new money. A tight one-song, the central bank is it? Eating ecstasy »China's monetary policy Let me thoroughly confused."

This comment is wrong. Unfortunately, in addition to also lead to some netizens habit of indignation, I have even seen some of the students cited the economics of these words.

1, all the money into circulation unlikely, because it is clear to the ordinary people of their collections. So on the market of "real impact" can be ignored.

2, triggered the "inflation" is another reason why people on inflation expectations. In this example, it is said, people will come from this case in the central bank will be substantial additional cash price will rise to the conclusion, so start early to buy a large number of commodities (such as crosstalk, said the "one Piwo soy sauce") , Rising demand and prices rise further.

I do not see the mere 60 million commemorative coins to trigger the manner in which this is expected.

3, yes, 60 million notes a drop in the ocean of China's economy is negligible. Because here is to consider China's economic "stock" rather than "Traffic." The latter is the annual GDP, the former was the total of goods and services, it is an astronomical figure.

Therefore, even if these people for all the money in circulation (which can never be), the flow rate is 10 (it is said that an average flow of money 10 times), then the flow of money supply but also an increase of just six million. Never mind the country, the number of Beijing's economy will not have any substantive impact.

4, the central bank almost daily recycling old bank notes issued new banknotes, I do not see the money in addition to different looks, and other new money of any nature distinction.

5, even if we are very, very narrow definition of inflation and the associated "currency" (such as M1), "money" is only a part, and may be relatively small part.

Comprehensive on 5:00, both qualitative or quantitative analysis, these commemorative coins and inflation are not related.