Hot money, also known as hot money, is a speculative short-term fund that flows rapidly in the market only for the pursuit of high returns. The objects of hot money speculation include stocks, gold, other precious metals, futures, money, real estate and even agricultural products such as red beans, mung beans and garlic.

We can understand that hot money is international capital, because the economies of different regions in the world are very different. Some places have good capital markets and some places have high interest rates. As long as money can be made, hot money will flow there. It reflects the profit-seeking nature of capital, but hot money is not only tenable, but also has many political purposes. The purpose of hot money mainly includes the following aspects:

The first is to speculate on capital and earn spreads. For economies with relatively stable political power, the main purpose of hot money is to earn enough income, because different countries have different interest rates and different levels of development. Through the flow between countries and regions, we can get a much higher return on capital than a single country or market, so we see the phenomenon of hot money speculating on Japanese real estate, China stocks, futures and so on.

The second is to achieve the purpose of currency war. For a government with political disorder and weak control, hot money is very aggressive, which will bring about drastic changes in a country's economy and even lead to the collapse of a country's economy through the layout of the capital market. While earning a lot of money, it will trigger a currency war and achieve its own political goals.

For example, during the Asian financial crisis, george soros, the controller of Quantum Fund, a world-famous hedge fund, subverted the exchange rate market of Southeast Asian countries through exchange rate manipulation, which triggered the economic collapse of many governments, not only earning huge profits, but also achieving his own political goals.

The third is to store water according to the situation and get higher income by shearing wool. In addition to the normal income, hot money will deliberately achieve greater income by shearing wool. The specific operation method is to speculate on the Japanese property market in Japan by manipulating the Japanese exchange rate price around the 1980s, and then lay out in the opposite direction, shorting the Japanese real estate market, and finally realize two large-scale profit cuts.