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Thread: RMB falls. What does this suggest?

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[quote=COOLSPRINGS,305970]Hot money enters into china for seeking high rate of return in speculative stock market, real estate market instead of commitment to productivity of capital assets.  In gradually heated economic party that accompanied by inflation, everybody is happy until it’s burnt out, and the party is over.

I am wondering how #1 reserves denominated in USD are allocated. Are they going to infrastructure investment abroad (I guess it’s going on now), expanding public expenditures or are they abused in speculation as mentioned above (a big threat that results in inflation and economic bubble).

Here is the quote from former Singaporean leader Lee Kuan Yew:

<<In the early stages, when you try to bring up a very low level of economy to catch up with others, the government must be an activist, and catalyst to growth.  But once the business got going, they would become too complex and specialized for any government to be involved.  Hence private entrepreneurs and companies must be encourage to take over.>>
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