Before reading the article, please click "Follow" to facilitate discussion and sharing, in order to repay your support, I will update the high-quality content daily
Recently, there has been a major event in China's financial sector, which has caused a lot of uproar, and there have been speculations about whether China's central bank will become the Federal Reserve.
This is that the People's Bank of China has obtained a permit to buy domestic government bonds, which means that the People's Bank of China will be able to buy Chinese government bonds in the future.
Some people will directly feel that there is nothing to make a fuss about, on the contrary, this incident can be said to be an important change in China's financial sector.
The first country to talk about buying and selling Treasury bonds is the United States, and the Federal Reserve of the United States often buys and sells US Treasury bonds.
Everyone sees in the news that the Federal Reserve often sells US Treasury bonds or buys US Treasury bonds, and does not understand why the US itself is doing this.
To put it simply, when the Fed finds that there are too many dollars circulating in the market, but the Fed cannot raise interest rates to get it back.
The Fed can only siphon dollars into the market by selling US Treasuries, so that it can recoup the excess dollars.
Conversely, when there are fewer dollars in circulation, they start buying large amounts of US Treasury bonds so that they can put dollars on the market.
The Federal Reserve controls the circulation of dollars in the market by buying and selling U.S. Treasury bonds, which can further control the market.
Such a method is a very useful monetary adjustment tool, which can avoid the interference of monetary policy on prices as much as possible.
For many years before, the United States issued U.S. Treasury bonds in the market, and China and other countries became large buyers of U.S. Treasury bonds.
In the past, China needed to buy U.S. Treasury bonds and Chinese exports every year to earn a large amount of dollars in foreign exchange to enter China.
Since China itself does not have the ability to directly circulate the dollar, it needs to change to the renminbi through the exchange rate, which will increase the number of people.
As time goes by, the renminbi will begin to grow slowly, and when the renminbi reaches a certain level, it will begin to depreciate sharply.
Now, the United States has started a new round of financial war against China, trying to suppress China in the financial aspect.
China has begun to play new tricks against the United States, and China's central bank has begun to buy China's own government bonds.
This means that China's financial sector is ready to start a new historical starting point, and it is also the starting point for the development of China's finance.
This also means that in the future, China's financial sector will no longer need to adjust the circulation of RMB in the market through interest rate leverage.
The fact that the People's Bank of China (PBOC) was able to start buying Chinese government bonds is a magnificent "transformation", which further shows that China's dependence on foreign currencies has also become smaller.
China has also begun to slowly break away from the containment of the US dollar, gradually regain the initiative in finance, and better survive in the financial war.
There is another layer of meaning of "transformation", that is, China has slowly changed from a "prey" to a "hunter".
Financial reform and autonomy can make China's voice in the international arena more important.
China can also get rid of the shackles of the US dollar, and the RMB can also enter a very good development situation.
In the future, China will better deal with the financial war and currency war of the United States, and it does not need to blindly carry it.
But change brings not only a very good future, but also the arrival of this crisis, and this time the change is also an existential crisis.
As China's central bank begins to buy government bonds, the stock market above the Chinese market may immediately have a surge.
And this surge will bring a serious problem, and that is the problem of inflation, which is a very difficult problem.
The boom in the stock market will directly stimulate a large part of investors, so that these investors will start to make money.
More and more investors are entering the money-making industry, and entering so many investments in a short period of time will directly cause inflation.
This depends on the Chinese government's own control methods, through which the impact of inflation is minimized.
Inflation is a good thing for the people, but it's a good thing for the whole people.
It can mean that the purchasing power of the renminbi has risen outside, and the value of the renminbi has increased, although it is not good for individuals.
The United States is now engaged in a financial war and currency war with China in order to devalue China's renminbi so as to harvest it.
The People's Bank of China (PBOC) is trying to confront the United States and make the value of the renminbi rise to offset the impact of the United States.
In this way, China can gain a firm foothold in this financial war and can guide the stable development of the financial market.