The Fictitious Economy Is Separated From The Real Economy

Along with fictitious capital unceasing expansion, the development of fictitious economy is increasingly prosperous, and the economic crisis has turned. out the new form.In the resent years, the economic crisis is often triggered by the burst of the price bubbles of the fictitious capital. Every global economic crisis means an unhealthy performance of the economic development and that reformation is needed.The eruption and extending of the sub-prime lending crisis of America happened in 2007 has successfully caught attentions of the whole world, and brought a furious discussion about the relationship between the price of fictitious capital and the price of the real capital. To this problem, in this paper I point out, based on the primary principles of the Marx's "On Capital", fictitious capital can never avoid rotation of capital and capital turnover, although it had a great expand. The fictitious capital can get increased only through the course of the rotation of capital and capital turnover. It means that the price of fictitious capital can never depart too much from the price of the real capital.This paper consists of five chapters, concrete as follows:Chapter one is preface, which includes the backdrop, research purpose, research meanings, the current research status in and abroad, the structure of the paper, research method, likely creations and limitations. The main purpose of this chapter is to introduce the relevant principles, and also to introduce the structure and the main content of the paper.Chapter two is the brief introduction of the economic crisis happened nowadays. Using empirical study method, I analyzed the several severe economic crisis and find out that the global crisis happened nowadays are more likely began with the break of price bubbles of the fictitious capital.Chapter three is the theory analysis of the reasons why it easily happens that the prices of fictitious capital go beyond the value of the real capital. The analysis is base on the Law of value. In this part, the problem is analyzed in two sides, the value and the relationship between demand and supply. In the article, it is pointed out that the fictitious capital have been priced much higher than the its real value because of many uncertainties existed in the pricing process based on discounting cash flow method. From the point of structure of supply and demand, the speculative demand can be a good reason why the deviation happened. When the most demands in the fictitious market become speculative demand, the financial crisis is most likely coming. So a potential risk of global crisis can be discovered and predicted by identifying speculative demand from the investment demand.Chapter four is the data analysis of the conditions of our country's fictitious market using three indexes, Financial Interrelation Ratio, Activity of Fictitious Assets Trade and price elasticity of demand in fictitious market. According to the data analysis, there is a potential risk in our fictitious economy and it is time to do something to prevent the financial crisis.Chapter five gives policy proposals on how to prevent the financial crisis. Firstly, the author put forward some practical policy proposals on how to prevent the speculative demand in the fictitious market respectively from domestic and foreign aspects. Then, to improve monetary policy, the author suggests putting fictitious assets price as an intermediate target and financial stability as a final target of monetary policy.