Core Viewpoint - The article discusses differing perspectives on holding cash as the economy enters a deflationary period, highlighting that cash may become more valuable in such an environment, contrary to concerns about inflation and low interest rates [1][3]. Group 1: Economic Context - The domestic economy is currently in a deflationary cycle, with the Consumer Price Index (CPI) showing a month-on-month decrease of 0.2% and a year-on-year decrease of 0.1% as of May [3]. - Prices of various goods are declining, with pork prices dropping from over 30 yuan per jin to 18 yuan, and small appliances seeing price reductions of 10-15% [3]. Group 2: Advantages of Holding Cash - Reason 1: In a deflationary environment, cash becomes increasingly valuable as prices of goods and assets decline, benefiting those who hold cash [3][11]. - Reason 2: Holding cash allows individuals to avoid investment risks, as many investment vehicles, including stocks and funds, have shown significant losses, with average losses of 140,000 yuan per stock investor in 2024 [6]. - Reason 3: Cash provides a safety net during uncertain times, allowing individuals to manage unexpected expenses, such as medical bills, without the pressure of immediate employment [8]. - Reason 4: Cash enables individuals and businesses to take advantage of low-priced assets when market conditions improve, positioning them for future gains [11]. Group 3: Business Implications - For business owners, having cash is crucial for survival during economic downturns, allowing them to navigate through tough times and prepare for future opportunities [9][11].

Group 1 - The current economic environment is characterized by deflation despite significant monetary expansion, with M2 surpassing 326 trillion and a year-on-year growth of 7% [1][3] - The contradiction between monetary expansion and deflation is attributed to the fact that much of the money remains within the financial system and does not circulate into the economy, coupled with reduced consumer purchasing power due to income loss and unemployment [3][4] - Prices of essential goods and assets have decreased significantly, indicating that cash is becoming more valuable in a deflationary environment, with examples such as pork prices dropping from 28 yuan to 17 yuan per jin and car prices falling from 250,000 yuan to 180,000 yuan [6][4] Group 2 - Holding cash provides a hedge against investment risks, as many individuals have faced substantial losses in stock markets and other investment vehicles, with average losses for stock investors reaching 140,000 yuan last year [8][10] - Cash reserves are crucial for emergencies, allowing individuals to manage unexpected situations such as job loss or medical emergencies without financial strain [10] - Cash holders are positioned to seize investment opportunities when market conditions improve, as they can wait for asset bubbles to deflate before making strategic investments [12][10]