wu fan
wu fan|Nov 03, 2026 09:58
The deflation of the RMB is truly severe. Fiscal deficits require money everywhere: pensions are short of funds, technological innovation is short of funds, unemployment and homelessness relief is short of funds, and civil servant salary cuts and arrears are short of funds. With such a severe shortage of funds, how can this be solved? Actually, the Americans figured it out long ago: "Drop money from helicopters rather than risk deflation." The government should be the lender of last resort during a crisis. During a crisis, it should increase its own debt to create more liquid currency and wealth. Government debt consists of the income and savings of businesses and the people. At this time, restricting local government debt, cutting and withholding civil servant salaries, downsizing and laying off staff in public institutions, and raising taxes on businesses and ordinary people are short-sighted and detrimental. The correct approach should be the opposite. Restore civil servants' salaries; pay all back wages; postpone layoffs for public sector employees; reduce taxes for businesses and the public; lower interest rates to near zero; issue over 10 trillion yuan in special treasury bonds to fill these gaps. The RMB should appreciate externally, but it should depreciate by 3-5% annually internally. The current RMB appreciation externally coupled with internal deflation indicates that too little RMB is being printed. The current situation is that no one is earning RMB, nor are they holding any. The floodgates need to be opened, and liquidity needs to be released. High money prices lead to a money shortage, and a money shortage dries up the cash flow of industries. The printing presses should be increased immediately; money should be poured in like helicopters. A vast ocean of RMB should be used to nourish industries. The only solution is printing money.
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