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China issues $174 billion to offset economic effects of coronavirus

2020-2-4 13:38

 

 

The coronavirus caused China’s stock market to plunge 8% in one day. Can a massive surge of new money fix that?

 

The People’s Bank of China is to inject 1.2 trillion renminbi ($174 billion) into its economy, in a bid to offset the damage caused by the coronavirus, it announced on Sunday.

 

Coronavirus is a highly contagious virus that gives its victims pneumonia. Since the outbreak started in the Chinese city of Wuhan, it has infected over 17,000, and killed 361, as of Monday, February 3. Experts say it may be the next pandemic.

 

Fears over the virus—and how it might affect China’s economy—have hurt its stock market. China’s stock market fell by 8% today—its worst day since 2015.

 

Coincidentally, the total amount the Chinese central bank is pumping into the economy is virtually the same as Bitcoin’s entire market cap, which is $170 billion, or 18 million Bitcoin, according to CoinMarketCap.

 

Skeptics of central bank authority—some of whom are outspoken in the crypto community—regard large government injections of this ilk as reckless proof that financial control shouldn’t be ceded to governments. They note that Bitcoin’s monetary supply is fixed, with a maximum amount of Bitcoin ever to be created.

In December, the US’s Federal Reserve Bank pumped around $400 billion into the economy through “repos”—marketing repurchasing agreements—the same mechanism that the Chinese government is using this month.

“This is 3x the entire Bitcoin market cap,” tweeted cryptocurrency analyst Ivan Liljeqvist at the time. ““EvEryThiNg’s fInE,” he said, mocking those who have faith in the government to sort out the economy.

“Opt out of this crap, buy bitcoin,” tweeted one “John Bitcoin” at the time. Unsurprisingly, Mr., er,  Bitcoin has already retweeted the China news.

But Chinese citizens won’t necessarily have a choice. China continues to ramp up development on its imminent digital currency and is cracking down on crypto businesses across the country. But with the ability to print their digital currency at will—and at little to no cost—will things only get worse?

 

冠状病毒导致中国股市一天内暴跌8%。大量新增资金能解决这个问题吗?


中国人民银行周日宣布,将向经济注入1.2万亿人民币(1740亿美元),以抵消由冠状病毒造成的损失。


冠状病毒是一种高度传染性的病毒,会导致患者肺炎。自疫情在中国城市武汉爆发以来,截至2月3日(周一),已感染17000多人,死亡361人。专家表示,这可能是下一次大流行。


对这种病毒的恐惧——以及它可能如何影响中国经济——已经伤害了中国股市。中国股市今天下跌了8%,这是自2015年以来最糟糕的一天。


巧合的是,中国央行向经济注入的资金总额几乎与比特币的全部市值相等。据CoinMarketCap的数据,比特币的总市值为1,700亿美元,合1,800万比特币。


对央行权威的怀疑论者——其中一些人在密码社区中直言不讳——认为政府对这类机构的大规模注资是鲁莽的证据,证明金融控制不应让渡给政府。他们指出,比特币的货币供应量是固定的,比特币的最大数量是可以创造的。


去年12月,美联储(Federal Reserve Bank)通过“回购”(repos)向美国经济注入了约4000亿美元资金。


“这是整个比特币市场市值的3倍,”加密货币分析师伊万·利尔杰奎斯特(Ivan Liljeqvist)当时在twitter上写道。“一切都好,”他说,嘲笑那些相信政府能解决经济问题的人。


当时,一位名叫约翰·比特币(John bitcoin)的用户在twitter上写道:“选择退出这种垃圾,购买比特币。”不出所料,比特币已经转发了中国新闻。


但中国公民不一定有选择。中国继续加快发展其即将到来的数字货币,并在全国范围内打击加密业务。但是,有了随心所欲印刷数字货币的能力——而且几乎没有成本——情况只会变得更糟吗?

 

来自: decrypt