Hot money, also known as hot money, is usually short-term speculative funds that flow rapidly in the international financial market in order to obtain high returns in the shortest time. Simply put, it is to see where there are opportunities to make money and where the money flows. After a while, I felt that the opportunity was gone and the money went out again. This kind of short-term entry and exit is often easy to induce financial market turmoil.

The investment objects of hot money are mainly foreign exchange, stocks, precious metals, real estate, futures and various agricultural products. Hot money reflects the profit-seeking nature of capital, and its purpose is purely to make profits by speculation, not to invest in industry, build infrastructure, create jobs and improve the local economy. Hot money sometimes has many political purposes.

The influx of hot money into a country will push up real estate and stock market, produce bubbles and cause false economic prosperity; At the same time, it also increases the scale of foreign exchange reserves, disrupts the normal operation of the financial system, increases the pressure of inflation, and is extremely harmful to people's livelihood.

The outflow of hot money means the withdrawal of capital from this country. In fact, it means selling domestic monetary assets, which makes real estate fall rapidly and bond stocks fluctuate greatly, which leads to violent fluctuations and even economic collapse. Developing countries are places where hot money likes to flow in. In recent years, Turkey, Sri Lanka, Vietnam, Indonesia and other places are countries where hot money has poured in. In 2020, due to the influence of YQ, the American economy was weak. In order to stimulate the economy, the Federal Reserve cut interest rates to issue treasury bonds and put a lot of dollars into the market. As a result, capitalists poured into developing countries such as Sri Lanka with a large number of low-interest dollar loans to invest, such as stocks and real estate, which led to the rapid take-off of Sri Lanka's economy in the short term, the skyrocketing stock market and the skyrocketing housing prices. In 2022, with the recovery of American economy, in order to curb inflation, the Federal Reserve entered a series of interest rate hikes. At this time, a large number of capital hot money smelled the shift of the weather vane and retreated from these developing countries, which led to the bursting of the local economic bubble, the stock market falling, the debt crisis, the shortage of materials, soaring prices, and Sri Lanka being ruthlessly harvested!