Why China is still frequently added leverage?

Why in the economy was the most difficult year, as well as the central authorities have identified the going to the lever to capacity, the actual situation is often not satisfactory, but in frequently to add leverage? No wonder to speak to the president, the price to stock is a great invention of Chinese economics, you can award the Nobel prize.

According to the figures announced on April 20, the people's Bank of China in 2016, one quarter of this year, our country individual house purchase loans increased 1 trillion yuan, an increase of 43.09 billion, a record since 2010, the central bank announced loans from financial institutions to invest in the report since. In the 1 quarter of all new loans to more than yuan, the proportion of loans over 20%. In short, the people and the enthusiasm of the lever is very high.
This inverse growth, it seems that with the current economic cycle is not how to match.
But the data is more than that. According to a report released by UBS recently, the current 95% of the financing of domestic financing, new external debt is very few. Estimated that by 2020, China's debt to GDP ratio will exceed 300%. Haitong Securities also issued a view that the 1 quarter of the new social financing in the new year, an increase of more than year on year, Yuan Chao in the 1 quarter of 2009. Data reflect the real estate and infrastructure is the main reason for the increase of new financing and currency. Compared with 2009, the current monetary stimulus effect is even worse, so the second half still need to guard against the risk of economic once again.
In recent years, the development of banking business in full swing in the past few years, by the end of 2015, financial capital has been as high as 22 trillion yuan. Which contains a large number of banks entrusted to the external institutions through a variety of ways to carry out the actual management of funds. For the sake of safety, such funds to invest mainly in the bond market, according to estimates, at present total bond market both inside and outside the field of financial leverage has reached 5.4 trillion yuan. This not only contributed to the domestic bond market bull market, but also on behalf of hundreds of times are leveraged funds in bond market surging. In other words, financial institutions are bored to add leverage.
In my understanding of the overseas financial institutions, many banks have significantly increased the bond investment and medium and long-term loans. One reason is to against the traditional trade financing service cuts, keeping the asset size and profitability, so choose the bond investment and the time limit more long syndicated and club on loan. And that often means more capital mismatch, or liquidity risk.
We also, not to mention the moment of the black line with the rebar bar. Despite the analysis of this is to go to production capacity faster than the demand side of the shrinking, which led to a surge in asset prices. But you really do not see the human factors in which the role of how many? Even from the cash flow point of view, I am also willing to understand it as financial assets such as in the maze of bull to collide with everywhere, each running at a place, they attracted the arrogant bursts, to be hit headache, turn away when will leave a rubble, and scarred.
I would like to ask, why in the economy was the most difficult year, as well as the central authorities have identified the need to leverage to capacity, the actual situation is often not satisfactory, but in frequently to add leverage? No wonder to speak to the president, the price to stock is a great invention of Chinese economics, you can award the Nobel prize.
Naturally, a huge amount of money is not a reason to go around. Since the 2008 global officially entered the drainage pattern, also in some countries, the central bank is reserved, but soon learned the world pool is so big, who first put Huanshi who will benefit from this simple truth, so Baxianguohai, recount. Has been placed on the interest rate is negative, shaken the basis of the existence of the bank, the Bank of Japan still said there is room for. What have you got to do with so much money? If the economy does not see a significant improvement, it is best to do the best way to do the money to make money.
Second, although these years to millions of people on the real estate condemn it in speech and writing, said high prices to destroy the human dreams and entrepreneurial spirit, raise the cost of living also reduces the quality of life, hinder the economic vitality. But high prices really pulling the dozens of industry development, on the other hand also absorption absorptive a large number of the stock of capital. If there is no real estate to a lot of money to cure in the above, fly up to heaven, it is far from the pork. Therefore, when the economic downturn affected by the real estate industry, capital flow will appear abnormal. When the transaction of funds flow find behind plenty of ammunition support, of course, such as ha 2 general joy to find can be pushed up the price of the assets of the.
Third, the end of inflation is not a shadow of the. In spite of the low inflation rate in recent years. But this aspect is related to the adjustment of the index, on the other hand, it is also caused by the economic depression. However, from the basic rules of view, moderate inflation is conducive to economic growth, but such as the rapid growth of the amount of money issued, but the economy has failed to keep up with the times, inflation is only a matter of time. The low interest rate environment, in order to counter the potential impact on inflation, added leverage to win gain is personal and financial institutions normal choice.
And the king's a peephole view.