Macroeconomic Core Indicators Cheat Sheet

Making you an ultra-simple, easy-to-memorize, and immediately usable macro cheat sheet, focusing only on the core, no fluff.

Macroeconomic Core Indicators · Cheat Sheet

(M1/M2/Social Financing/Loans/Bonds/Interest Rates)

1. Total Money Supply: M2

- Definition: Total sum of all money in the economy

Cash + Household deposits + Corporate deposits + Other deposits

- In a nutshell: M2 = Total liquidity in the market

- How to interpret

- M2 growth rate ↑ = More money, looser liquidity

- M2 growth rate ↓ = Less money, tighter liquidity

2. Money Activity: M1

- Definition: Active money

Cash + Corporate demand deposits

- In a nutshell: M1 = Money companies can spend immediately

- How to interpret

- M1 ↑ = Companies willing to invest, expand, active economy

- M1 ↓ = Companies inactive, not investing, weaker economy

- Classic combination

- High M2, Low M1: Lots of money, but only saved, not spent

- M1 turning upward: Signal of economic recovery

3. Leading Economic Indicator: Social Financing Scale

- Definition: Total amount of money borrowed by the real economy

Bank loans + Bonds + Non-standard financing, etc.

- In a nutshell: Social financing = Leading barometer of the economy

- How to interpret

- Social financing ↑ = Companies/households dare to borrow, dare to invest → Strong economy

- Social financing ↓ = Weak demand, no one borrowing → Weak economy

- Most crucial: Social financing is more sensitive and reacts earlier than GDP

4. Largest Component of Social Financing: Loans

- Corporate loans

- ↑ = Corporate expansion, strong investment

- Household loans

- Medium & long-term ↑ = Strong confidence in buying property

- Short-term ↑ = Consumption recovery

- In a nutshell: Strong loans = Real demand in the economy

5. Direct Financing: Bonds

- Government bonds: Infrastructure projects, supporting the economy

- Corporate bonds: Companies borrowing directly

- Bond interest rates

- Interest rate ↑ = Expensive to borrow, tight funds

- Interest rate ↓ = Cheap to borrow, loose policy

6. Master Switch: Interest Rates & Monetary Policy

- Interest rate cut / RRR cut → Easing → Good for economy, good for assets

- Interest rate hike / Tightening → Tightening → Suppress overheating, suppress assets

- Logic chain

Interest rate cut → M2 increases → Interest rates fall → Loans/Social financing rise → Economic recovery

Ultra-simple mantra (memorize this is enough)

- M2 for liquidity

- M1 for activity

- Social financing for demand

- Loans for confidence

- Interest rates for tightness/looseness

If you're willing, I can make another one for you:

A comparison table for "judging good or bad as soon as the data comes out"

For example: What M2 growth rate is considered high, what social financing is considered strong, how to interpret the M1-M2 scissors gap.

(Note: Some content of this document may be AI-generated)