What does rising prices mean? What is the signal?

Rising prices are often a monetary phenomenon. Because you print more money, the purchasing power of money becomes weaker. When you were young, the use was in short supply or the price was controlled by some links. Not long ago, the central bank capped mortgage loans, with 40% for real estate loans from large banks and 32.5% for personal housing loans.

Such restrictions give people the impression that more than 70% of asset loans have entered the real estate sector, not to mention various wealth management products, loans, trusts and other huge funds. Honghu Lake is the land of Wang Yang. The flood of funds kept pouring into the real estate market, and there was a super bull market that lasted for 20 years. House prices are tossing and turning, ranging from five times to ten times and twenty or thirty times.

Remember that lady who forgot her house for 28 years? Thousands of dollars were leveled at the beginning. Twenty-eight years have passed, and the unit price of buildings around the community has been above 70,000, up 28 times, and house prices have risen. Based on the directional performance of inflation, it is precisely because the real estate market has attracted the greatest firepower that there is no overall inflation, and prices have generally turned a few heads.

In February last year, when COVID-19 was raging, the demand for masks soared, and the masks that cost ten cents at ordinary times were sold for ten dollars. Therefore, thousands of meltblown fabrics have been fired to 600,000 per ton, with huge demand and lack of funds. The fundamental reason for the soaring prices of some commodities is the rising prices of some vegetables and fruits. Sometimes it is due to climatic reasons, such as flash floods and premature frost caused by heavy rains. As a result, the production of agricultural products is reduced, the scale of terminal sales is obviously reduced, and the price increase will become inevitable. This is the self-regulation mechanism of the market. Price increases reduce demand and gradually reach a balance. The fluctuation of pork price is more complicated. At first, strict environmental protection requirements were used, and too many small farms were shut down, and the production capacity was greatly suppressed.

Coupled with the African swine fever series, a large number of pigs died. At present, the production capacity can't be restored, and the risk of breeding in the future becomes greater, and the confidence of retail investors and farmers is difficult to recover, while large capitals have entered the market one after another, forming a local monopoly. Without the consent of retail investors, prices are more easily manipulated, and it is natural that meat prices are high.

In 2020, influenced by COVID-19, European and American economies declined. In order to boost the economy, countries have started printing presses. Among them, the United States is even more unscrupulous, printing 20% of the banknotes in the past year. In this case, other countries in the United States may not necessarily suffer. The United States can easily buy the assets and goods of various countries by printing money without doing anything, which is simply robbing money.

It is precisely because there are more funds in the market that flow into the stock market and the stock market goes up. The corresponding assets invested by various assets have gone up, and the price-earnings ratio of leading stocks in the industry is hundreds of times. There are still funds that are optimistic about this buying expectation and seek opportunities to preserve and increase value. In this context, this is why Maotai has been rising and has been ignored by others. The reason for the looting is that everyone is looking for long-term and stable channels to increase value and preserve value. Maotai will not expire for a long time, but it will appreciate. Except for Russian hair and gold, ordinary people can't seem to find reliable channels.

In a word, the stock price rise is mainly caused by currency. There is no need to be nervous about short-term inflation in China, but the pressure of inflation in the medium and long term will be greater. How to maintain and increase the value needs to learn to think, but never touch the house.