The Ministry of Finance’s press conference this time has made it clear that everything is done to reduce debt.
It is not enough to just issue 50-year treasury bonds to pay off tens of trillions of local debts. The most direct way is to start printing money. However, if this causes hyperinflation, it will affect social stability. In order to pay off the debts, the stock market must be pushed up and used as a capital reservoir. The higher the stock price and the better the market, the more funds it can accommodate. The deeper the pool, the more national debt-paying tools it has and the more room for money issuance.
At present, the debt problem in various places cannot be underestimated. Local governments are facing huge financial pressure, and the rapid accumulation of debt has caused continuous troubles. As economic growth slows, local government fiscal revenue has also shrunk, making the already embarrassing financial situation even more fragile. In this context, a series of measures taken by the Ministry of Finance are particularly critical, especially injecting more liquidity into the stock market.
This market-oriented approach is not simply to make the stock market rise wildly, but to use the stock market as a buffer to allow investors to direct idle funds from the off-market to the market. This means that the stock market may experience a period of crazy growth, attracting more investors to participate. And the strong stock market performance will also enhance investors' confidence and further accelerate capital inflows.
In the long run, a strong stock market can establish more financing channels for local governments. Once the stock market performs well, local governments can effectively broaden their sources of fiscal revenue through issuing stocks and asset securitization. This is undoubtedly a powerful measure to promote economic growth and resolve local debt.
These changes also mean that ordinary people may benefit from them. The prosperity of the stock market will help increase the wealth of residents, and some people will become economically wealthy. Whether investing in the stock market or sharing the dividends of development through other means, people's living standards will be improved. To a certain extent, people's willingness and ability to consume are also expected to gradually pick up in the economic recovery.
Many people are worried that the increase in money supply will lead to inflation and damage consumers' purchasing power. Relatively speaking, moderate money supply plus efficient economic operation can inject vitality into the market, balance supply and demand, effectively control inflation levels, and achieve steady economic growth. The government should guide the market through more scientific economic theories and policy implementation, rather than simply relying on blindly increasing money supply.
Everyone is looking forward to a better life in the future. How to make wise decisions in this market trend has become a challenge we must face. What do you think about the current fiscal policy and stock market prospects? Do you have any unique views?