After sending away a large number of local officials who came to the door, I didn't expect the central-level Ministry of Finance.

"Boss Lin, I take the liberty of bothering, you may feel disappointed, I'm here to make a fortune!" Minister Liu of the Central Ministry of Finance said a little embarrassed, "It's a shame to say, as the minister of the Ministry of Finance, the finance is so poor that the treasury is running rats, the deficit is constantly expanding, there is no money, and what's worse is that if you want to issue treasury bonds to borrow money, you can't issue many treasury bonds!"

"What is the current interest rate for treasury bond issuance?" Lin Qi asked.

"The interest rate on three-year Treasury bonds is 14%, the one-year bond is 11.34%, and the interest rate is 9.36% for less than one year. 12.42 per cent for the biennium. Minister Liu said.

"This interest rate is not very attractive!" Lin Qi said, "Now the inflation rate is almost 24%, and there are more profitable businesses, so doing anything is better than buying treasury bonds, right?"

"Mr. Lin, why don't you buy a little, otherwise our Ministry of Finance will really not be able to live. If you buy a national debt, we have a reason to fool you...... No, persuade other banks and localities to buy the central government's government bonds. Minister Liu said.

"Okay, but I think 3 years of government bonds is too short, if you want to issue 10 years. Lin Qi said, "10-year treasury bonds, fixed interest rate of 15%, and 7.5% interest paid in June and December every year. In this way, the new chess insurance company can buy 2 billion treasury bonds. In addition, the main reason why treasury bonds cannot be sold is that bonds are not easy to trade and liquidity is not good. I suggest that the Ministry of Finance cooperate with the central bank to engage in a reverse repo model for treasury bonds. ”

"Treasury bond reverse repo?" Minister Liu was stunned.

"I invented the name, but the trading model is well established in developed countries. In the mainstream developed countries of the world, government bonds can be used as quasi-currency second only to currency. The main reason is that government bonds can really be used as money in the banking and financial system. If banks and other financial institutions and enterprises feel that treasury bonds can replace cash and preserve their value than cash, then it will be easier for them to issue treasury bonds. Reverse repo is in the open market, such as the stock and bond market, people who need money can use treasury bonds as collateral to obtain loans, and those who want to borrow money will quote an annualized interest rate, ranking from high to low according to the ranking, and the highest priority is to close high-interest rate loans. Institutions that are willing to lend money, when they see that someone is taking treasury bonds as collateral, they begin to grab the opportunity to take out loans, and the lower the quotation rate, the easier it is to close the deal. To put it simply, it is to use treasury bonds as collateral as a store of value similar to money, as long as the market is mature. Then, the liquidity problem of people who buy treasury bonds is solved, and they need to use money, and they do not need to wait for the maturity of treasury bonds, but pledge treasury bonds in the market to obtain short-term loans. As long as there are people willing to borrow money, then government bonds will surpass ordinary deposits and quickly be subscribed by banks and large-scale financial institutions. ”

"Why do you want the central bank?" Minister Liu was puzzled, "What does the Ministry of Finance have to do with the issuance of treasury bonds?"

"......" Lin Qi was silent for a long time, "The central bank is trusted, without the endorsement of the central bank, the game rule of reverse repurchase of treasury bonds will not be bought by the market at all." The central bank must guarantee it, and even if other institutions do not lend money, the central bank will definitely do it. The Treasury Department endorses the security of the principal and interest on government bonds. The central bank, on the other hand, endorses the liquidity of government bonds. As long as the central bank can guarantee that someone will take the treasury bond as collateral to borrow funds, and the central bank is willing to accept the collateral of the other party and give loans, then the liquidity problem will be solved, and the treasury bond interest rate will gradually become the reference value of the risk-free interest rate, and the bank and the central bank may refer to the treasury bond interest rate to formulate deposit and loan interest rates in the future! Expanding the treasury bond market is not only beneficial to the Ministry of Finance and the central bank, but in fact, it is also beneficial to the market-oriented reform of the country's financial sector. In the future, the interest rates of the institutions issuing bonds and the banks will mainly refer to the market interest rate of treasury bonds. For example, if the market does not approve the issuance of a 15% interest rate on treasury bonds, it may fall below the face value of 100 yuan, making the real interest rate exceed 15%. It is also possible that the market interest rate will become lower and the treasury bonds will become more sought-after, so it is possible that the treasury bonds with an annual interest rate of 15 percent will rise to 110 or 120! The market game will make the formulation of market-oriented interest rates more timely and sensitive. ”

"I see!" Minister Liu said with emotion, "This trip is really worthwhile, Mr. Lin understands the economy quite well, why don't you take the time to give a lecture to our Ministry of Finance after the year!"

"Forget it! I don't read many books on economics, and I still study more economic terms with journalism. Lin Qi said with a smile, "I can give a little advice at most, and I can't give lectures! I'm not a teacher, and I like to preach and get a job for others when I have nothing to do." ”

Originally, in the mid-80s, the proportion of central fiscal revenue was still above 40%, but in the 90s, the proportion of central fiscal revenue in the national tax revenue shrank to 22%. Although the reform of the tax-sharing system was implemented in 94 years, and the central fiscal revenue quickly increased to more than 50%, there were still many domestic economic problems in the 90s. For example, when prices are soaring, it is more difficult to make money that exceeds inflation. A large number of state-owned enterprises, even because the market was unresponsive, lost money in the overheated economic cycle of the 90s, which grew savagely.

The economy as a whole is overheated, not to mention the uneven heat and cold in the provinces, all localities and departments have sought the Ministry of Finance for emergency relief, and the Ministry of Finance is far less rich than it was later, and it can be said that the current Ministry of Finance is the poorest in history. Not only is it poor, but the localities are worried that the Ministry of Finance will not repay the money borrowed from the localities, so when the central government borrows money, few localities correspond, they all hold their wallets tightly and never borrow money. In 93, Minister Liu took over with leverage, held a financial meeting in Hainan, and the financial representatives of all provinces across the country came, and Minister Liu directly laughed at himself: "When Comrade Minister Li was Minister of Finance, he wore a shirt and trousers; when Comrade Minister Wang was Minister, he also had a shirt; and only a vest and pants were left here." At the meeting, a comrade joked with him: "You may not even have a vest, only pants left." It can be seen how poor the central government is in this era.

Even if you are poor, the problem is that it is difficult to borrow money, and the treasury bonds issued by the Ministry of Finance have all responded, and not many institutions are keen to buy them.

Because, it is true that the interest rate of government bonds in this year is high, but the degree of inflation madness is much higher than the interest rate of government bonds. If you buy treasury bonds, you will lose, and whatever commodity you dump may be better than the treasury bonds. Well, this is the overheating cycle in economic theory, the overheating cycle is analyzed from the perspective of investors, commodities are king, you pour coal, steel, non-ferrous metals, oil, whatever commodities you want, are far outperforming inflation.

Overheating cycle, GDP economic growth is fast, inflation is also high, many people find that although income and profits are growing, they are far from outperforming prices, and even, many people in the 90s lived more difficult than in the 80s, because inflation is too serious, a small number of times may quickly grab a lot of wealth in this era, but it is actually difficult for most people to ensure that their income growth exceeds inflation in this era.

In mature economies, an overheating cycle is followed by a stagflation cycle, which is characterized by stagnant economic growth and high inflation. Arguably, the stagflation period was more painful than the previous overheating period.

The overheating cycle is still the rise in income and prices, and the stagflation cycle is the slow rise in income and the fast rise in prices.

After stagflation, there is a recession period, during which the economic indicators dominated by GDP are getting lower year by year, but fortunately, inflation is also getting lower year by year, and it may even enter deflation. Although, a recession may be accompanied by a large number of layoffs and job losses, however, due to relatively low inflation. When the government realizes that the economy is in a recession, it will implement policy stimulus such as tax cuts, monetary easing, and interest rate cuts. As long as you don't lose your job during the recession, or if your salary is cut, you will not be able to adapt to the recession at first, and after you have adapted, it will be better than the previous overheating and stagflation.

What's more, the recession period is the winter of the four seasons of the economy, and since the recession period is coming, a large number of tax cuts and easing policies will improve the operation of many enterprises.

With the economic recovery of many industries, it will usher in the most ideal cycle of economic development - the recovery period!

In the recovery cycle, the policy of easing monetary policy and reducing costs due to a large amount of loose monetary policy and tax cuts during the recession period continued. Moreover, the economy is in low inflation, but GDP growth is constantly picking up. This cycle of low inflation and high growth is the spring of the economy all year round.

However, the four-cycle cycle of recovery, overheating, stagflation, and recession is the law of mature capitalist countries, especially the economic law of the United States, and it is not a universal truth.

For a long time, there are only two cycles of overheating and stagflation in the economy of South America, the overheating period is that GDP and inflation are rising rapidly, and the GDP in the stagflation period does not rise, and inflation continues to rise. If we apply the cycle theory of Europe and the United States as a template, we will find that many regions are different from the cycles of Europe and the United States, and each country and region has different national conditions and regional conditions.

If China's economy is analyzed according to the theory of the economic cycle cycle of capitalist countries, it will be found to be very chaotic, and it may be stagflation for a while, overheating again for a while, and jumping over again for a while, turning into stagflation and recession. One clockwise, one counterclockwise, the cycle is completely fragmented and irregular.

The theory of cycles guides China, and sometimes the spirit is like a god. Sometimes, it's just nonsense, and it doesn't work at all. The fact that the time is not working shows that the classical cycle theory is not actually tailored for China.

It is not impossible to define China's cycle according to the phased performance of commodities, bonds, stocks, inflation, and GDP in the cycle scale theory, but ...... It may not work to copy the classical theories of other countries. At the very least, it will take local Chinese economists to come up with a set of laws governing China's economic cycles.

However, Lin Qi doesn't want China to produce such awesome economists, because a country has produced a group of great and classic economists, most of which proves one thing - the country's economy is not good, and the economy is sick!

Only when the country's economy is very bad will there be economists everywhere, and the depth of thought and theory is very high. After the collapse of the Soviet Union, the countries of Eastern Europe had more miserable days, and there were a bunch of economists. In addition, South American countries, any person who is looking for a person to talk about monetary policy, exchange rate, economic cycle, inventory cycle and the like are well understood, economics for South American countries, is equivalent to common sense, there is no need to receive education at all, you can deeply understand various economic theories, and all of them are talents, the ability to draw inferences, to other countries, can be a professor of economics.