When the price of U falls, why are there still many people around me frantically exchanging dollars?

The recent interest rate cut by the US dollar has caused the RMB to appreciate significantly, making the already bad export business even more difficult. Recently, many friends in the crypto circle have complained that they have been cut even though they hold U, but the bosses of traditional industries around them are taking advantage of this wave of RMB appreciation to accelerate their escape!

Let me explain the general logic:

1. The ratio of debt levels to GDP in China and the United States. We can only get data from 2022. At present, China's overall debt level is 337 trillion RMB, equivalent to 47.73 trillion US dollars. In the past two years, local debt has become more serious. With urban investment as the main body of hidden debt, the volume will only be much more than 88 trillion. However, in the same period of 2023, China's GDP was 17.89 trillion US dollars, and the debt/GDP ratio was 266.8%. (2023 data)

The US debt is mainly government federal debt + household debt + institutional debt. The government debt is 30.2 trillion US dollars + 15.5 trillion + 2 trillion, totaling 47.5 trillion US dollars. The US GDP in 2023 was 27.37 trillion US dollars, and the debt/GDP ratio was 174.2%. (2023 data)

2. M2 growth rate. China's average M2 growth rate over the past 10 years was 10.12%, while the United States' average M2 growth rate over the past 10 years was 6.69%. The M2 growth rate can be understood as the speed of excessive money supply.

3. The visible economic conditions of China and the United States, and the deterioration that China can actually perceive. In the past three months, no matter CPI, PPI, or PMI data, none of them are optimistic, and the characteristic is the intensification of deflation. Especially as a major manufacturing country, China's PMI has been below the boom-bust line since May. Combined with the recent appreciation of the RMB, export data will be even more difficult!

As mentioned above, the recent advocacy of RMB appreciation has mostly attracted laymen to watch the excitement while experts to see the truth. However, as front-line bosses in traditional industries who have fought for many years, their behaviors and actions will be more representative and wiser! Now is a good time to exchange US dollars, not the other way around!