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As expected, the RMB exchange rate issue

Foreign exchange markets are very, very complex, involving foreign trade, interest rates, geopolitics, international strategies, material levels in different places, economic growth rates in different regions, and so on.

If the analysis of all aspects, long I can not afford, today only to say one aspect, we together to help central mother accounts, see how good the management of foreign exchange work.

Dollars are not printed by our central bank, they are printed by others, so there are three ways for us to obtain dollars. One is that if we sell more things to others than we buy from others, our foreign exchange will become more, which is called foreign trade surplus. Another way, it is other people don't buy you something, but others to invest, foreigners back pocket with big dollars to start a company, this could make the dollar more, of course, it is hard to distinguish between investment and speculation, the somebody else say, you also can't force somebody else must have a career, the somebody else is likely to be at your interest is high, to have one of interest. The third is the profit we get from investing dollars.

So, to put it simply, there are three ways for us to obtain foreign exchange, one is trade surplus, one is the investment and speculation of others, and one is that we take dollars to invest and make money.

Let's imagine that an American friend came to the vibrant great China at 1:8 with an ideal and 10 million dollars, exchanged 80 million RMB and set up his own business in China. China's economy is growing so fast that 10% growth is no problem. After five years, the balance of this hardworking and brave foreign friend was 120 million RMB. At this time a look, yi? 1:6, hometown parents urged to get married, in exchange for dollars into 20 million dollars, think is really magical. How can I return to China with two piles of green tickets when I only put one pile of green tickets to the people's bank of China? The people's bank of China can't draw green paper out of thin air.

As we all know, China's foreign exchange reserves are high. A friend once suggested that we are a public country, and the national property belongs to all Chinese people. More than three trillion dollars in reserves... Or else? We each split a few thousand dollars? Hand in hand to go abroad unrestrained and unrestrained!

This mistaken belief that China's foreign exchange reserves are Chinese property and can be used at will is wrong. I am sorry to tell you that my friends at wye guo ren used their money for investment and changed it into RMB. They could leave at any time, and the us dollars should be saved and redeemed at any time. You can imagine the look on my friend's face.

This is like opening a bank, people deposit money to you here, ha ha ha! Rich, we go out a good wide, or we directly divided it. It must be a thief who can think like that.

So a lot of dollar reserves still have to choose the United States Treasury bonds, why? Because liquidity is good, crooked nut friend wants to remit us dollars to go home, can cash out immediately. The interest rate is not high, but it is safe and there is no fear of default. It's hardly an option. It's not the authorities being stupid.

So the foreign exchange reserves of these dollars, to balance, it is not easy, foreign exchange surplus earned and other people invest in your foreign exchange to do a little investment, this positive effect than crooked friends earn more to get back more foreign exchange.

We are not considering many factors, including the impact of foreign capital inflows on interest rates, inflation, and local markets. We're just looking at the amount of dollars that are not renewable by the people's bank of China.

There is another type of investment is arbitrage, great China's real interest rate is so high, rigid exchange trust can yield 11% to 12%, and the dollar to zero interest rate is not the way back here. You're a normal person. What do you do? Of course, it is to borrow dollars to find a way around, to China to eat interest.