Among the resources managed by the central bank, the currency reserve, as an idle credit resource, has not been used. In order to cope with inflation and deflation, similar to the energy storage power station in the power grid, we suggest that the central bank set up a currency reserve fund. Its main functions are as follows: first, to adjust the total amount of money according to economic requirements, cut off peaks and fill valleys, stabilize the money supply of the whole society, and reduce the price fluctuation range of various social assets; The second is to adjust the monetary structure according to economic requirements, mainly to adjust the amount of money in the real economy and the virtual economy.
The currency reserve fund consists of gold, foreign exchange reserves and funds specially issued or concentrated by the central bank. It is an important part of the central bank's asset currency and a special currency reserve strictly controlled by the state and subject to total control. The money reserve fund belongs to social assets and is managed by the government. It should be managed by the National Monetary Reserve Fund Management Committee composed of the People's Bank of China, the National Development and Reform Commission, the Ministry of Finance, the State-owned Assets Supervision and Administration Commission and the Ministry of Labor and Social Security, with the central bank as the competent business unit.
The money reserve fund is issued when the real economy is deflationary. If there is surplus social funds (as is the case in China at present), they will be distributed to the society. If social funds are insufficient (that is, the real economy and the virtual economy are tightening at the same time), increase the number of money issued. The raised money reserve fund is used for specific social projects that must be undertaken by the society and to purchase some non-performing assets, thus increasing the money supply and alleviating the deflation problem. At this time, the money reserve fund mainly exists in the form of assets.
When the real economy is in inflation, we will issue a money reserve fund to recover money, and at the same time sell the bad assets we have to recover money. While reducing the money supply, increase the supply of social assets. At this time, the money reserve fund mainly exists in the form of money.
From the use point of view, the money reserve fund has the attribute of indirect tax, and its social debt is similar to the national debt, but stronger than the national debt. However, the purpose of issuing is different: the currency reserve fund is issued to adjust the amount of money, and the national debt is issued to make up for the lack of fiscal revenue; They are also distributed in different ways. Under certain conditions, national credit can be used to issue money to form a currency reserve fund, while national debt can only be raised from social funds. They exist in different forms. As a special currency reserve, the money reserve fund does not constitute a direct financial burden and can exist for a long time, while the national debt may not exist for a long time. The scope of use of the two is also different. What needs to be emphasized here is that, unlike national debt, the money reserve fund can only be used for public welfare projects that the whole society must and should undertake, and can never be used for any economic projects in any name. This must be guaranteed by national legislation.
At present, we have surplus funds, surplus materials and various resources, relatively low prices, and various social needs that need to be met urgently. This is a good opportunity to establish a currency reserve fund. We suggest that the first phase of the money reserve fund should be raised from the society, mainly from financial institutions. The interest rate of the money reserve fund should be calculated according to the 5-year deposit interest rate and change with this interest rate. The People's Bank of China occupies the currency issuance index and pays the interest on the currency reserve. This is equivalent to the society paying the cost, transferring funds from the virtual economy and investing in the real economy according to social needs.
It is suggested that in the period of deflation, under the monetary reserve fund, some funds should be set aside to participate in the auction of non-performing assets, or some non-performing assets can be purchased by bidding. In order to avoid aggravating deflation and reducing the loss of the money reserve fund, in the period of deflation, the acquired non-performing assets are generally only accounted for and not dealt with. When inflation occurs, the acquired non-performing assets will be sold to the public through bidding, and the losses caused by the sale of assets will offset the total monetary reserve. As this part of the money reserve fund exists in the form of physical assets, the money reserve fund should enjoy the treatment of AMC.
Different from AMC, the source of money reserve fund is not financial funds, but invisible seigniorage. Its essence is that the whole society uses money reserve funds to offset some losses of commercial banks and state-owned economy. When the stock market plummeted, the Federal Reserve provided liquidity loans to financial institutions, and the Bank of Japan bought bank shares to avoid bank bankruptcy. The use of the Exchange Fund by the Hong Kong SAR Government to rescue the market is worth learning.
The essence of issuing monetary reserves and purchasing non-performing assets is the systematic risk of the central bank's invoice writing off part of social credit. There is an essential difference between hyperinflation and debt dilution in some countries. In the case of deflation, the former is a limited means of currency issuance actively used by the government, and the write-off of debts is controlled by deflation, which is beneficial to creditors and economic operation, does not reduce the debtor's responsibility, and conforms to the requirements of market economy rules; The latter is passive and laissez-faire inflation, which is harmful to creditors and economic operation, reduces the debtor's responsibility and does not meet the requirements of market economy rules. In the long run, it is a feasible financial insurance measure to use the money reserve fund and write off some social credit risks with central bank invoices.