The biggest perception of ordinary people in the era of negative interest rates is that deposits are shrinking. If they deposit 1 10,000 yuan in the bank in August and withdraw it in August, the actual loss will be 1.25 yuan after deducting the CPI growth factor. After the economic crisis began in 2008, the central bank continuously lowered the deposit and loan interest rates to stimulate the economy. The deposit and loan interest rate of RMB was lowered for four consecutive times: September 2008 16,10,29,112,23. Among them, the one-year deposit interest rate has been greatly reduced from 4. 14% to 2.25%, while the loan interest rate is getting lower and lower, allowing more and more money to flow in the market. On the other hand, China has been over-issuing currency for many years. The broad money balance (M2) increased by 19.2% year-on-year, and the growth rate was 1.6 percentage points higher than that of last month. In August, RMB loans increased by 545.2 billion yuan, which also exceeded market expectations, so inflation was obvious.
The evil consequence of negative interest rate: unfair distribution of social wealth
Poor people: saving less and less, getting poorer and poorer.
The most intuitive impact of negative interest rates is that residents' deposits in banks will shrink more and more. Residents' savings deposits are 29 trillion yuan, and the interest rate is at least 3 percentage points lower than the neutral level, which is equivalent to an annual increase of about 900 billion yuan.
Since it is unsafe to put money in the bank and it will evaporate in vain, taking it out is the best way. However, a considerable part of bank deposits cannot be withdrawn, which is the "compulsory savings" of low-and middle-income people. They can't and dare not consume, let alone turn it into investment. Of course, their little money is not enough to invest. Farmers, in particular, don't use the money unless they have to, because the money is saved to support the elderly and save lives, or is needed in case of emergency at any time. Therefore, in a sense, negative interest rate, as a wealth redistribution tool, will further plunder the poor wealth of the disadvantaged groups in society.
Rich people: start speculating and further push up prices.
Of course, the rich will not just watch their money evaporate in the bank, so they will definitely try their best to seek investment. In fact, China's investment channels are relatively simple, and most of the rich have turned their attention to the stock market, property market and futures market. This is also supported by survey data. According to the observation of Yin Zhongli, Institute of Finance, China Academy of Social Sciences, in 2007, when house prices rose rapidly and negative interest rates became more serious, the real estate market in China just ushered in a period of soaring prices. "In 2007, CPI broke through the key point of 5% in July and reached 6.5% in August. In contrast, the China stock market rose by 17% and 16.7% respectively in the past two months, and house prices soared. " Yin Zhongli said. Therefore, it is generally believed that negative interest rate is the real murderer behind high housing prices.
Individuals and enterprises that can get loans: let the asset bubble fly.
In the era of negative interest rate, we can't ignore the low loan interest rate. Since 2003, the real loan interest rate in China 1 year has been 2.6% (the official CPI has increased by 2.7% annually), so individuals and enterprises who can borrow money can get it at almost no cost. In 2009, not only did the central government launch a huge investment plan of 4 trillion yuan to stimulate the economy, but bank credit surged 10 trillion yuan that year, setting a record high. Low interest rates triggered huge demand for credit and capital, while cheap-money policy released huge liquidity. When hot money and hot money are rampant, speculation will be even crazier and more rampant. At this time, speculative profits far exceed the return on investment, and industrial capital is threatened. [Detail] The typical representative of this is the real estate industry. According to the data of China People's Bank, by the end of 2009, the balance of real estate loans accounted for 19.2% of the total loan balance, an increase of 1 percentage point over the end of last year. In 2009, new real estate loans amounted to 2 trillion yuan, accounting for 2 1.9% of all loans, accounting for an increase of1/percentage point over the previous year, and an increase of 1.5 trillion yuan. Among them, personal housing loans increased by 1.4 trillion yuan, about five times that of 2008 and twice that of 2007.
In the era of negative interest rates, people's money evaporated in banks. On the other hand, it is actually local governments and state-owned enterprises that can get a lot of loans from banks, so such large projects and empty projects are not uncommon. According to the Financial Operation Report of China in 2009 released by the central bank in June, the loans in 2009 were mainly invested in infrastructure, leasing and business services, real estate and manufacturing, and actively supported the construction of infrastructure and key projects. The low interest rate in China is a long-term phenomenon, not a sudden occurrence. Historically, in the 240 months from September 1990 to August/20 10, negative interest rates appeared in about 80 months, that is to say, the probability of negative interest rates appearing in these 20 years was 33.3%. This is because depressing the real interest rate or even conniving at the negative real interest rate is the key factor for China's financial system to support economic growth. At the low interest rate, the amount of bank credit is huge, which greatly stimulates investment and drives the economy. However, there are many hidden dangers in this economic growth model, such as asset bubble inflation, environmental pollution, poor resource consumption, and intensified polarization between the rich and the poor, and the future economic growth space is severely compressed.
The huge spread between deposit interest rate and loan interest rate has always been the biggest profit source of China commercial banks. For example, we pointed out in a special topic before that the net interest margin income of ICBC, the most profitable bank in China, accounted for 78.9% of the total income. For regulators, the biggest threat of negative interest rate is the diversion of deposits, but historically, even if there is negative interest rate, it will not necessarily lead to a large number of deposits flowing out of banks. Judging from the balance of residents' savings deposits, it climbed from 490 billion in September of 1990 to about 29 trillion in August of 20 10, and it increased by about 5 trillion annually in 2008 and 2009, and it has also increased by about 3 trillion so far. Therefore, the central bank is more worried about too much deposits, rather than the diversion of deposits. In the past 20 years, the balance of monthly savings deposits has decreased only for about 20 months. Even in 2007, when the stock market and housing market were booming, the maximum monthly reduction was only about 500 billion yuan.
Although the interest rate is negative, the prospect of raising interest rates is not clear. One of the reasons is that the government is optimistic about the future decline of inflation, and believes that inflation can be effectively curbed by strengthening the supply of agricultural products and cracking down on price speculation. But this is actually a very wrong concept. In fact, inflation is caused by too much money and has nothing to do with the price of agricultural products. However, because China's CPI statistics are very unscientific, and the weight of food items is above 30%, the government can control CPI as long as it controls food prices, but such CPI can't measure the real inflation degree at all, which is tantamount to drinking poison to quench thirst.