Qingcheng Heroine | Wen
The Lady in the Yellow Shirt | Edited
Financial Entrepreneur Journey | Produced by
Many people believe that inflation is caused by printing too much money?
Some say printing too much money leads to inflation, while others argue it causes the stock market to rise. The next statement is:
"Inflation means no bull market."
At the beginning of last year, the sudden outbreak of the COVID-19 pandemic prompted global central banks to inject massive liquidity to support the economy. By the end of last year, markets began anticipating inflation as a result of such 'massive easing,' with commodity prices hitting new highs repeatedly. Since the beginning of this year, the stock market has experienced turbulence.
Facing the new wave of inflation, investors are highly confused: does excessive money printing bring a bull market or not?
On April 26th, in an offline salon titled "Investment Evolution Theory," initiated by Himalaya and co-organized by Financial Literacy Chivalry, several guests discussed the topic "New Inflation Attack: How Do We Beat the Printing Press This Time?"
Wu Zhaoyin, Macro Strategy Director at AVIC Trust, delivered a keynote speech titled "The False Premise of Inflation and the Uniqueness of This Round of Inflation."
Wu Zhaoyin believes that this round of inflation has its own uniqueness. Apart from monetary factors, there are also supply-side bottlenecks. In the early stages of excessive money supply, stocks tend to rise. However, in the mid-to-late stages of inflation, printing too much money can suppress stock prices.
No. 1
Inflation and Money Supply
From the perspective of monetarism, inflation can be explained as a monetary phenomenon. Monetarism has a formula: MV=PY (M is the money supply, V is the velocity of money...