Scissors difference between M1 and M2.
The amount of money circulating in the market is called the money supply in financial terms.
Because the liquidity of money in the market varies, the liquidity of long-term deposits is not as strong as that of short-term deposits, and the liquidity of short-term deposits is not as strong as that of cash.
Therefore, when counting the amount of money, the standard and caliber are different, and the amount of money counted will be different.
The M1-M2 scissors difference can directly reflect the expectation of the future economy and can be used as a leading indicator for judging the credit cycle and the economy. The scissors gap widens, and when the M1 growth rate is greater than M2, it means that consumer demand is strong, there is an expectation of rising prices, deposits are demanded, and living money is increasing. At this time, the stock market is likely to have opportunities. The scissors gap narrows, and when the growth rate of M2 is greater than M1, it means that everyone saves more and spends less. During this period, the general economy is relatively cold, and the demand for currency is relatively small. Where can I see the M1-M2 scissors difference data? These data are regularly released by the central bank and can be viewed on the central bank's official website or major financial websites.
M0 M1 M2 means:
M0 means currency = cash in circulation, that is, cash circulating outside the banking system ;
M1 means money in the narrow sense = M0+ corporate demand deposits ;
M2 means broad money = M1 + quasi-money ( resident savings + time deposits + other deposits ).
M0, M1, and M2 are three important indicators that reflect the money supply.
M0: It is closely related to consumption, and a high value means that ordinary people are well-off and rich.
M1: Reflects the actual purchasing power in the economy, represents changes in the tightness of household and corporate funds, and is a leading indicator of economic cycle fluctuations. Liquidity is second only to M0.
M2: It reflects the actual purchasing power and potential purchasing power at the same time; the liquidity is weak, reflecting the changes in the total social demand and the pressure of future inflation.
Generally speaking, we can use the changes in the growth rates of M1 and M2 to reveal the operating conditions of the macro economy:
1. If the growth rate of M1 is fast, the consumption and terminal markets are active ;
2. If the growth rate of M2 is fast, the investment and The middle market is active ;
3. If M1 is too high and M2 is too low, it indicates that demand is strong, investment is insufficient, and there is an inflation risk;
4. If M2 is too high and M1 is too low, it indicates that investment is overheated, demand is not strong, and there is a risk of asset bubbles ;
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