The main reason for the price rise and fall should be how to solve the problem

The market is known as a pair of "invisible hand". The so-called "invisible hand" is the law of the market economy. Therefore, mastering the laws of the market economy is tantamount to seeing the "invisible hand", is tantamount to grasping the "invisible hand". If the management organization is not able to market economic operation law, then it can not effectively control the market operation, and ultimately, it is bound to be manipulated by the "invisible hand", which will lead to extreme chaos in the market and serious economic crisis. If the governing body has mastered the laws of market economy, then it can control and direct the "invisible hand" as it wishes, and make it serve to promote the development of market economy.

Since the birth of the commodity market in human society, it has been accompanied by the problem of price fluctuations, especially in the highly developed economy of modern society, this problem is more prominent. The traditional price theory is that price fluctuation can balance the market supply and demand relationship, can achieve price stability, and is conducive to promoting social and economic development, therefore, not only should price fluctuation not be restricted, but also should be liberalized, allowing it to fluctuate at will. In fact, price fluctuations should not only be limited by the state of supply and demand in the market, but also by the limitations of the investment efficiency of the market.

As the purpose of the enterprise investment market is to obtain the income, but not the market supply and demand balance, so the market supply and demand state is subordinate to the market investment income, and then form the market supply and demand state to limit the amplitude of price fluctuations, the market investment income to determine the direction of price fluctuations of the situation. In the real market operation process, the free fluctuation of prices will not promote the market supply and demand balance, but will destroy the market supply and demand balance. In the actual market economic management process, should not be through price fluctuations to regulate the market supply and demand relationship, but should be through the adjustment of supply and demand itself to balance the market supply and demand relationship, that is, insufficient supply to expand production and reduce the accumulation, insufficient demand to expand consumption and increase accumulation.

Price fluctuation is not a natural law of market economic development, nor is it a correct and effective method of balancing the supply and demand of commodities in the market, but it is the inevitable result of illegal speculation by commodity operators, and it is a concrete manifestation of the criminal behavior of speculators who violate the property of others. This serious crime, the government should not be adjusted through the market supply and demand this kind of good economic means to "control", should not be released to allow prices to fluctuate at will, condoning the crime of infringing on other people's property, but must be established to stabilize the price of strict laws to legal means of price fluctuations to strict limits, and then Effectively combat criminal behavior, to protect the immediate interests of the majority of consumers. The currency circulating in the modern market is basically a credit currency, and price fluctuations will undermine the commercial credit guaranteed by the government, thus damaging the public image of the government, lowering its public prestige and weakening its administrative capacity. In addition, the loss of the credit of the currency printed with the heads of many great men will mean that the heads of these great men have become the criminal tools of speculators, so that they have become the "partners" of speculators to violate the interests of consumers, and seriously damage their glorious image.

It is generally customary to assume that there will be no oversupply in the process of price increases, i.e., inflation and overproduction cannot exist at the same time, but this is not the case. Inflation refers to price increases, can not exist at the same time with the price stability and price declines; overproduction refers to the supply exceeds demand, can not exist at the same time with the balance of supply and demand and supply is less than demand. Price fluctuations and market supply and demand between not only the existence of a single correspondence, but also the existence of complex multiple correspondences, but also the existence of a variety of complex market operation mode. The market model that is currently operating in reality is only one of the multiple models, and it is the one with the lowest operating efficiency. In the operation of the market economy, there is not only a single crisis of inflation or overproduction, but also a "double crisis" of both.

In this state, if you expand demand, it will lead to more serious inflation; if you limit demand, it will inevitably lead to more backlog of goods. Price volatility not only destroys the supply and demand of goods in the market, leading to a "double crisis", and it is also the culprit of many social ills. Its harmful effects on society are mainly manifested in the following ways: unemployment of a large number of workers, a sharp rise in the crime rate, wastage of social wealth and natural resources, widening of the gap between the rich and the poor, and so on. The existence of any one of these serious consequences will constitute a great damage to the development of human society.

In the operation of the market economy, there is a "dynamic equilibrium" and "static equilibrium" of the supply of goods, therefore, not only to ensure a single "dynamic equilibrium Therefore, not only to ensure a single "dynamic balance" or a single "static balance", but also must maintain the "dynamic supply and demand" and "static supply and demand" of the double balance, otherwise it will form a market risk Otherwise, market risks will be created, which will eventually lead to a full-blown crisis of the market economy. Explore the market balance approach: the establishment of commodity market regulation fund, when the market in the dynamic commodity supply surplus situation, the fund to purchase goods, on the one hand, as the market commodity reserves, prosperity and balance the market supply and demand, on the other hand, expanding the enterprise sales of commodities, and increase the efficiency of the enterprise; when the market in the dynamic supply of commodities is insufficient, the fund sales of commodities, on the one hand, to ensure that the market supply, maintain the monetary credit, on the other hand, to recover the currency, maintain the market credit, on the other hand, the recovery of money, to maintain the dual balance of market supply and demand.

In the past, there are two great misunderstandings in the process of currency issuance: one is that the expansion of currency issuance will cause inflation, and the other is that currency issuance is limited to small-denomination cash currencies exchanged between individuals and institutions. In fact, in the increasing supply of commodities and the strict control of commodity prices, the expansion of currency issuance not only does not cause inflation, but also can play a significant role in promoting the development of the market economy; in the process of currency issuance, not only small-denomination general-purpose cash currency can be issued, but also a new variety of currency --- large-denomination currency exclusively used for transactions between institutions. In the process of currency issuance, not only small cash currency can be issued, but there is also a new type of currency - the large-denomination "financing currency" exclusively used for exchanges between institutions. At present, the government and enterprises feel that the supply of money is insufficient, the fundamental reason is that there is no mastery of the initiative to issue

The initiative to issue currency, do not dare to take the initiative to issue currency; did not develop a supply of large amounts of economic future between the institutions of the special currency, do not know how to go to the issue of a large number of currencies. Once the currency issue is taken as a kind of active market control means to be utilized, then the enterprise's "commodity benefits" and "monetary benefits" will not be hindered in any way, the market economy will enter a new high-speed stage of development; once the new monetary Once the new currency varieties have been developed and utilized, then it will certainly cause a new financial revolution, and then effectively resolve the current existence of a variety of financial risks and government and corporate debt risk.

The basic purpose of enterprise management is to create good economic efficiency, and economic efficiency must be realized through the "commodity benefits" and "monetary benefits" two steps, both of which are indispensable. If an enterprise simply creates "commodity benefits" but cannot realize "monetary benefits", then its economic benefits will be virtual benefits; if a financial institution creates "monetary benefits" through currency issuance, but the enterprise cannot create "monetary benefits", then its economic benefits will be virtual benefits; if a financial institution creates "monetary benefits" through currency issuance, but the enterprise cannot create "monetary benefits", then it will be virtual benefits. If financial institutions create "monetary benefits" through currency issuance, and enterprises cannot create corresponding "commodity benefits" to match with them, then the economic benefits will naturally be unattainable. "Commodity efficiency" and "market equilibrium" are inversely proportional to each other, the higher the commodity efficiency, the greater the difference between market supply and demand, otherwise the opposite. The greater the relative market supply, the greater the need for "monetary benefits" and its corresponding generation, otherwise it can not realize the due economic benefits, and will cause a large number of commodities backlog, hindering the survival and development of enterprises. The basic function of enterprises in the market is to create commodity benefits, while the basic function of financial institutions in the market is to create monetary benefits. As long as they can realize tacit cooperation, the overall economic efficiency of society can be greatly improved, and the market economy can achieve extraordinary speed of development. However, the development of production requires a stable price environment, without which the supply and demand relationship in the market will be undermined and the development of production will inevitably be impeded; the expansion of demand must be preceded by the stabilization of prices, otherwise it will inevitably lead to inflation, making it difficult for the measures for expanding demand to play their due role. It can be seen that price stability is the basic conditions for the development of the market economy, price stability is the current macroeconomic control of the urgent need.

In a nutshell, the rise and fall of prices is related to the relationship between supply and demand, and the amount of money put on the market, the circulation is also related. When prices are high, it inhibits the buyer from purchasing goods to buy, the volume of transactions is reduced, forcing prices to reduce, and vice versa. When the amount of money put on the market, the circulation increased, the price level will rise, the amount of money put on the market, the circulation is reduced, will contribute to the price level down.

The price level is too high, too low are not conducive to the economic development of society as a whole. If the price level is too high, it causes inflation and hinders economic development; if there is overcapacity and a backlog of goods on the market, and the price level is lowered, it causes a waste of social resources.

When the price level is too high, the face of inflationary pressure, one is the country to reduce the amount of money in the market, the amount of money in circulation, can be achieved by increasing the reserve ratio, increase the deposit and lending rates, the second is the government and the industry should increase the amount of goods and commodities in the market, "put water on the ground," to calm prices; when the price level When the price level is too low, the market is facing deflationary pressure, economic inactivity, appear very stagnant, at this time, the government should increase the amount of money in the market, the amount of circulation, in order to stimulate, activate the market, and, to take the government's strategic acquisitions, purchases, storage, expanding the strategic reserves of the "cistern" in order to curb the fall in the price level.