Core Viewpoint - The current economic environment in China is experiencing deflation, contrary to predictions of inflation due to excessive money supply, with the CPI showing a year-on-year decrease of 0.3% in September [1][3]. Group 1: Economic Conditions - The broad money supply (M2) reached 335.38 trillion yuan by the end of September 2025, which is double the GDP, indicating severe monetary overexpansion [1]. - The lack of money circulation in the economy is a primary reason for deflation, as excess money is not reaching the goods market but remains stagnant in the financial system [3]. - Consumer caution due to unstable incomes has led to reduced spending, resulting in significant inventory buildup and price reductions across various sectors [3]. Group 2: Advantages of Holding Cash - Individuals holding cash are experiencing increased purchasing power, with prices for essential goods like pork dropping from 25 yuan to 17-18 yuan per kilogram [7]. - Cash holders can effectively mitigate investment risks, as stock market volatility has led to significant losses for retail investors, with many public funds reporting losses of 20-30% last year [9]. - Cash provides a safety net for unexpected events such as job loss or medical emergencies, allowing individuals to manage expenses without immediate financial stress [11]. Group 3: Investment Opportunities - In a deflationary environment, asset bubbles in the stock and real estate markets are expected to burst, presenting buying opportunities for those with cash [14]. - Cash holders can strategically position themselves for the upcoming economic growth cycle by making investments at lower prices during the deflation period [14].