Group 1 - The global broad money supply to GDP ratio reached a record 121% in Q3 2025, indicating a significant imbalance where $1.21 circulates for every $1 of wealth created [1] - In China, the M2 (broad money supply) grew by 7.9% year-on-year in May 2025, while GDP growth was only 4.5%, leading to an M2 balance of 325.78 trillion yuan, which is 2.4 times the GDP size [3] - The rapid expansion of M2 in China since 2008 has been primarily driven by bank credit, with a notable increase in infrastructure, real estate, and state-owned enterprises following the pandemic [6] Group 2 - The financing structure in China is heavily skewed towards indirect financing, with over 60% of financing through banks, compared to over 70% direct financing in the U.S., leading to a cycle of new deposits being created from loans [8] - Asset price bubbles are a direct consequence of excessive money supply, with M2 increasing approximately 155 times from 2009 to 2021, while housing prices in major cities surged over 200% [10] - The velocity of money has been declining, with M1 growth at only 2.3% in May 2025 compared to M2's 7.9%, indicating a preference for saving over spending among businesses and consumers [12] Group 3 - China's total debt to GDP ratio reached 251% by 2025, with each unit of GDP requiring 2 units of debt, contrasting with the U.S. ratio of 0.6 [14] - The efficiency of the financial system is deteriorating, with the ratio of total bank assets to GDP rising from 1.95 times in 2008 to 2.84 times in 2024, while in the U.S. it remains stable at around 0.8 [16] - Despite low interest rates, credit demand remains weak, leading to resource misallocation where "zombie" companies survive on refinancing while emerging industries struggle to secure funding [18]