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Loose monetary policy is the "curse" of private usury

Time: 2012-12-28         Source: Rong 360 original         Author: Li Jing

On September 29, 2011, Wenzhou Municipal Party Committee and Municipal Government promulgated the Opinions on Stabilizing and Regulating Financial Order and Promoting Economic Transformation and Development (hereinafter referred to as "opinions") in response to the bosses in Wenzhou appearing in the "running path", and "On the one hand, banks are required to "not raise capital or pressure on loans."Lending ratesThe maximum increase cannot exceed 30% to ensure that the target of new loans of 100 billion yuan will be determined at the beginning of the year. On the other hand, “the business owner who has left is urged to return as soon as possible and organize the disposal; to the police who continue to evade, the public security, labor security, and other departments must strongly intervene and conduct investigations swiftly; the unpaid wages, false closings, and false If you leave or leave bankruptcy, you must deal with it strictly.
There is no doubt that Wenzhou has looming the financial collapse of private usury. In fact, this situation has long been expected. Regardless of whether it is Inner Mongolia or Jiangsu and Zhejiang, the trend of private loan sharks has intensified over the past few years. OrdosPrivate lendingThe interest rate is 30%, Wenzhou is also more than 24%. If one looks at the final outcome, it is easy to conclude that “the government's monetary tightness has led to the breakdown of civil finance”, and many people have called for “the government cannot adhere to the monetary contraction line and must adopt a loose monetary policy immediately”. However, if we look at the beginning of the game, the conclusions reached are exactly the opposite. It is precisely because past monetary easing has caused the breakdown of private finance in certain areas. This is like an individual being addicted to drugs. Rehabilitation is very painful. Some people say that this kind of pain is caused by not continuing to use drugs.
How does monetary easing promote large-scale private loan sharks? Looking back at the history of China, from about the beginning of 1993, there was a wave of usury in China. At that time Shenzhen and other citiesBank deposit rateAchieving more than 25% of loan interest rates exceeding 30% is commonplace, and it is almost the same as today's private usury. At that time, not only could the city credit cooperatives have high interest rates, but trust companies, securities companies, etc. were actively involved. Even many commercial banks joined the ranks. Many branches of commercial banks were involved in out-of-account operations. Wuhan and Haikou also appeared throughout the country. And other capital trading centers, the member units are national commercial banks and non-bank financial institutions. Its excitement is not worse than it is now.
Why was there usury? From the fund demand side, it is mainly due to the loose monetary policy in 1992. After the Southern Patrol of 1992 in Xiaoping, the whole country blew up the “Great Leap Forward” and currency and credit surged. No matter if the growth rate of investment or the growth rate of currency and credit exceeded 35% or more, then one year later, there was obvious currency. Expansion began in June 1993 with macroeconomic controls and 16 measures were introduced. Of course, the main measure is to tighten the credit gates and rectify and standardize the financial order. Money and credit suddenly tightened after loosening, and capital inevitably emerged. Many cities have emerged as "uncompleted buildings." The most typical representatives are Beihai City in Hainan and Guangxi. These "uncompleted buildings" were not until more than a decade later. Clean up. In the initial stage of monetary tightening, enterprises and individuals often did not have psychological preparations, and their expectations were still in a state of rising bubbles. Therefore, raising funds at all costs became their common choice.
The root causes of the usury boom in 2011 can also be explained by the loose monetary policy in 2008. The central bank must adopt monetary stimulus to create "hot industries" and "cold industries." For example, real estate, which depends on large-scale capital, is a hot industry. Those relying on self-funding, such as family retailing, are cold industries. "Hot industry" is cheaper to obtain capital for production, but it is not necessarily cheaper to sell. Because buyers are not only looking at low interest rates for mortgages, but also have a threshold for down payment. The higher the house prices are, the higher the expectations of real estate speculation will be, but the threshold will also become higher, so it will require a large amount of private financing to enter this area, which is equivalent to raising the conditions for capital formation. In the process of this fundraising and financing, the private interest rate will be greatly raised due to the expected high real estate speculation, and eventually evolve into a usury.
Therefore, it is paradox to think that monetary tightening is a matter of suffocating small and medium-sized enterprises. It is just monetary easing that has created a disaster for private usury. The

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