-spamming paper money, called "money"

-shortage of materials, called "expansion"

Only one of them will lead to the imbalance of "goods/money", which will lead to the rise of prices.

1) inflation and inflation

The so-called inflation is actually two concepts. Spamming paper money is called money. The shortage of materials is called inflation. These two phenomena are completely different and cannot be confused at all. Otherwise, it will be a thousand miles away, leading to misjudgment in the real world.

For example, the National Development and Reform Commission, known as "the stupidest department in China", always makes mistakes on inflation and inflation. As a subsidiary of the National Development and Reform Commission, the analysis report that the decision-making department sees all day is always "there are 560 industries in China with overall overcapacity, and no department is in short supply".

What if there is overcapacity and supply exceeds demand? The National Development and Reform Commission told us that the price would go down, and the State Reserve Bureau would follow suit. So I lost my hands and feet on "copper futures" and was slaughtered by foreign banks like a little sheep.

The State Reserve Bureau can't figure out why there are too many "overcapacity" materials, so the price will fall. The State Reserve Bureau began shorting copper futures when the copper price was $3,300, thinking that the victory was in hand and the bubble was hit. But in the real world, the State Reserve Bureau made a big mistake. Today's copper price has already exceeded 7500 dollars.

The mistake made by the State Reserve Bureau is because they didn't understand the difference between "currency" and "inflation".

Too much material is called "expansion" and too little material is called "contraction". In the real life of China, there is basically an oversupply and overcapacity.

If the supply exceeds the demand, the price will inevitably fall. This sentence is true, and it is also the basic principle of economics. However, it is a mistake to directly extend to "price decline", which is a thousand miles away.

Because the measurement standards you make are not universally equivalent. For example, we can say that "cotton/gold" went up and "cotton/gold" went down. Taking gold as a measure, supply exceeds demand and supply is less than demand, and the inclination of supply and demand is very obvious.

However, if RMB is used as a measure, such as "copper/RMB", the effect is not so obvious. Because the RMB itself is not a universal equivalent. Its value, with the government issuing paper money indiscriminately, will be continuously diluted and shrunk.

In the past four years, the RMB has been diluted by about 300%, and correspondingly, prices should also rise by 300%. After deducting the development coefficient of productivity itself, there should be an overall price increase of about 200%. Every time the National Development and Reform Commission made a mistake in forecasting, it always thought that there was overcapacity, while prices kept rising. The reason is that the difference between "money" and "inflation" is not clear. So far, the description of inflation in China textbooks is still wrong.