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My Home About Me Profiting With Forex Where Would You Invest $200bn? Posted on 10/04/2007 07:51:46 | Link | Post Comment The Chinese government unveiled a new $200bn investment fund through which, they will be distributing some of their forex reserves. Where would you put that money? All on one bet short the EUR/USD? With 400:1 leverage you could make $8,000,000 if the market moved one pip in your favor. But alas, as we have already been discussing today, there is a difference between fantasy and reality. The real question that I have is where will they put that money? I understand that their are some gentlemen in Nigeria that may have a deal for them. I have received a few emails on the subject already. Seriously though, are they going to keep investing in buy-out firms like Blackstone or will they buy a basket of stocks in the S&P 500? What about developing economies and strategic partners? This is a critically important question because it could amount to a major disruption of capital flow (which is already pretty turbulent) in the near term. It is important to remember that this is all happening as the USD falls to new lows, which will affect the trade balance between China and their largest trading partner. This is a new strategy in an unfamiliar environment and the affect it will have on their currency and therefore the rest of Asia's economies is entirely uncertain. Bottom line for forex traders is to be aware of the issues and watch the JPY for signs of volatility. Also, be sure to check out our blogs, videos, calendar, podcasts, pair analysis, trades, and reports at ProfitingWithForex.com 9/30/2007 by John Jagerson << My Home | The FX Markets Blog Home

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