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How to Profit From China’s “Hot Money” Strategy

Posted on July 17th, 2009 in China, China's Foreign Reserves, Dollar, Hot Money, Renminbi, Yuan China, China's Foreign Reserves, Dollar, Hot Money, Renminbi, Yuan

China made headlines around the world this week when it revealed that its foreign reserves had eclipsed the $2 trillion market for the first time, rising by a record $178 billion in the second quarter – thanks to a flood of “hot money” that flowed into the world’s most promising economy.

But the “hottest” investment money may soon be flowing from China back into the United States – thanks to an accompanying development that didn’t even make the news (let alone headlines) here in this country. This will translate into windfall profits for U.S. investors with holdings in the “right” kinds of companies, and in the long run should bolster the U.S. dollar.