Chapter 48 Chapter 9 Personal Coping in Financial Crisis

I would like to talk to readers about gold when the financial crisis hits.Recently, everyone asks me about this every day, and I get annoyed by it. Even when I am walking on the road or going to the toilet, people come to ask me, Professor Lang, should I buy gold.I want to say that this problem is very serious, because due to the impact of the financial crisis, everyone began to panic and began to want to preserve their assets.Because, starting from 2009, the impact of the financial crisis on each of our common people is beyond our imagination.why?Because this is a once-in-a-century financial crisis, we have never experienced it in the past.And according to instinct, everyone will tighten their consumption and dare not spend money under such circumstances.What about enterprises?Businesses will reduce investment and keep cash, so please think about it, if everyone retrench consumption and companies retrench investment, then our economy will be even more hopeless.But why doesn't Professor Lang encourage you to spend more and consume more at this moment, and why doesn't he encourage companies to invest more? I tell you repeatedly, keep more cash, why do you say that?Because this is human nature, I can't change it at all.

When any enterprise or person encounters a crisis or uncertainty, they will reduce investment or consumption and increase cash. This cannot be changed.This is why government decisions are so important.This is why the U.S. government came out to rescue the market. What is the reason?That is to help this society with sluggish consumption and investment inject a new kind of resources, so that they dare to consume and invest.Of course, what I want to discuss with you today is a financial issue. In China, financial management is very simple, and it is not a very complicated concept, because there are too few types of financial management that we can choose.First, the stock market, as I mentioned before, the uncertainty of the stock market in 2009 is very high.Second, the property market, the biggest risk of the property market in 2009 is the overall freeze. The real estate market in 2009 is likely due to the excessive investment of resources before 2008. Once the housing price fell, developers were tied up, and then the manufacturing industry was depressed, resulting in a decline in the amount of funds for property buyers. These forces will make 2009 The property market that started in 2010 stagnated.Third, bank deposits. What problems do bank deposits encounter now?Everyone is most worried about inflation.Please think about why everyone is worried about inflation. I think your worry is very reasonable.For example, the government's 4 trillion yuan rescue plan, may I ask where the money comes from? Before 2008, because our real estate market was very active, the government collected a lot of corporate income tax whether it sold land, real estate taxes, or corporate profits.These taxes make the fiscal and tax revenues of the central government or local governments at all levels not only rise steadily but also rise sharply.

However, starting from September of 2008, especially into November, the fiscal and tax revenues of local governments at all levels have dropped sharply.Therefore, where the funds of 4 trillion yuan will come from has become a problem.Well, according to the central government's plan, it can only contribute 1 trillion yuan, and the rest will be paid by local governments, and even 2 trillion yuan will be financed through banks.In this regard, I currently doubt whether the local government can afford to pay in this economic depression.But what I'm more worried about is, what if the government can't afford the money?There are two methods other than bank financing: the first is to issue treasury bonds, and the second is to print money.The result of issuing treasury bonds is the same as bank financing. Who will our government issue bonds to?The debt is not issued to the common people, but to the bank.If the bonds are issued to the bank, the bank must withdraw a large amount of funds from the private economy and then buy bonds, which is the same as the result of bank financing.In addition, 2 trillion yuan of the 4 trillion yuan is financed by banks.As long as you want to get financing from the bank, the inevitable result is that the bank will withdraw 2 trillion yuan from the private economy and transfer it to the local government for infrastructure construction.If the government bonds are issued to the banks, the banks will take back some money from the private economy to buy bonds, so whether it is issuing bonds or financing from the banks, the side effect is that the private economy will become more depressed.If you don't issue bonds, the result of printing money will cause overall inflation.If you keep a bank, it is general inflation that devalues ​​your deposits.In fact, the benefits of these three options are very poor.

Starting from December 21, 2008, our common people have a fourth choice, which is to invest in gold.