Limit to buy the inflation

Inflation is the essence of too much money in circulation. But expression comes out and attract the public attention, is the rise in prices. This can be a problem: how to deal with what the price question, can more effectively curb inflation? Obviously, to set limit to suppress certain commodities price, although at that time limit can achieve purpose, but it doesn't mean so pinned the inflation. Maybe, a wave of not flat, unusual, and rising prices from a commodity "out" to another commodity. Inflation is because of too much money circulation. People driven by inflation expectations, the currency in the hand, and the desire to buy goods and assets to hedge, from the loss of inflation. There behavior logic as hard as iron, is not easy to abolish. The government has to buy a ban on content restrictions,nfl hats of course, can "stable", a price. But people monetary assets is, the market is still in the purchasing power of the money, not bought a thing, the somebody else will return to buy b content. You buy or limit the again buy b content, the somebody else turned again and buy c content. Move around, the purchasing power of the money in the market "roaming", rising prices dropped, a series of barred from buying make might become the general level of commodity prices rising actively push. Can a different perspective. Given the wide circulation, currency rates and not one pace reachs the designated position of reality, higher market clinch a deal valence not only "reflect" inflation, its itself can also be "release" part of the inflationary pressure. For instance people spend money to buy rice, buy the surface, or buy a car, bought a house, this part of the flowers out of money into physical commodities, or to physical assets. Our rice, noodles, car, house of course can sell it, once again, to monetary assets and the purchasing power of the money, but are not so easy, because commodity or need immediate consumption, or assets and deformation of the trouble with transaction costs. More important, since because negative on currency value function just joined the ranks of the money, this part of the buyer is no longer a currency preferences, and prefer to hold goods and physical assets. This way, the original armed with liquidity nature is "persist". On this point, also can use I experience of a story to illustrate. In the 1960 s, I was in Shanghai primary school, litre middle school, on the way to school every day is subject to the temptation of delicious food. That's "three years difficult time", food and fusi supply strain, the government loose policy and allowed "free market" open. So both sides of the street to the school, filled up with all kinds of food stalls. What to eat, is expensive, under this plan than the supply of the expensive many times. But my mother never give money, and only she think reasonable need to deliberate appropriations. So, I'm inviting food needs of course the road "rigid for zero". At home and bend the place, is my mother bought a large jar of Iraq jujube, locked in the big wardrobe, every once in a while to send children take out a few a smash. At that time the Iraq jujube, import, every jin to sell 5 yuan. Then read the Chen yun thought of political don't know this is deal with the 1960 s one of the measures of inflation. Chen yun said, "the 1962 currency 1 freefloat reached thirteen billion yuan, and social 1 freefloat only $seven billion, and another six billion yuan? Be make several higher priced goods at six billion yuan, back, the market price is stable." (the Chen yun no.3 (people's press, 1995), p. 377). Here the "several higher priced goods", also including I that year had a will always remember the names of the Iraq jujube in that country. Under the planned economy also have inflation, cause is the same, "money hair too much, lead to inflation". At the time of the multiple money reason is "four years since 1958 (national finance) book collecting from more than a digital 'apparently has false", in fact,' four years has a great deficit countries'. 'preliminary estimate, there may be two hundred yuan, or some more billions. "among them, 1961 national deficit $five billion seven hundred and seventy million. In 1962,...... in fact have a fairly large deficit, $five billion project" (see "the ChenYunChuan",cheap nfl jerseys the central literature press, 2005), p. 1300). As a result, "this years dug business inventory, a price, with the help of a big part of gold, silver and foreign exchange reserves, in foreign trade on the debt, and still owe more 67 billion yuan ticket to make up for the deficit, these are all inflation performance". "The reason is very simple: on one hand, spending more money; on the other hand, agriculture, light industry, the state of the goods production to less, these two aspects can't balance". Permanent cure, of course, is to increase the supply of agricultural products and light industry products, and the control of the money supply, and try to have the money in circulation stock back. Here is very important lesson is must not think all price freezes up, is to control inflation. To clear, stabilize prices do not be equal to a stable inflation, as under control is not equal to the thermometer under control the temperature. That each jins 5 RMB yuan of Iraq jujube in price index measure the temperature of the price-- of course will improve price is reading, but experience said, that it is one of the effective measures to inflation. The key is, this part of the price index with high commodity prices, isn't like WenDian on to it, the seller back more than the amount of money sloshing, spend less money out? If do get, inflation period part of rising prices, is also likely to avoid price impact society more sensitive areas, until finally put too much has been made of the currency to eradicate inflation in the right direction.

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