How did foreign exchange come from? The dollar is the main currency. I sell things to America, and Americans pay me dollars. If we export more than we import, there will be more dollars. What if the dollar doesn't work at home?

We take dollars to the bank and convert them into RMB at the exchange rate. Banks take them to the central bank and convert them into RMB or bonds. Eventually, the dollar will reach the central bank and become a foreign exchange reserve.

Foreign treasury bonds are a part of foreign exchange, and foreign exchange reserves are mainly composed of these two parts.

Let me tell you a fact. If you look closely at the above process, you will find that foreign exchange is like extra money. The central bank changed RMB into US dollars, so I got RMB and the central bank got US dollars. Isn't that weird?

In fact, foreign exchange is the debt of the central bank, and the central bank exchanges dollars by printing more money. If these dollars can't be used to buy goods with the same price, then those printed banknotes will inevitably lead to inflation and price increases.

The more banknotes are printed, the more corresponding commodities should be printed. Some goods are very efficient, such as computers and electronic products, so the output of these things is much larger than printing more money, so the price drops quickly!

But some things, such as real estate, are not built as fast as printing money, so prices will continue to rise.