We've talked a good bit about how the Chinese government is printing yuan to buy foreign exchange to keep the yuan devalued.
What I want to do in this video is actually to look at the data to show I wasn't making all that stuff up.
This is actually data from the People's Bank of China. This is directly from their website.
Right over here this is 2010 money supply and this is 2009 money supply.
You can get any money supply any year you want from their site.
What we can do is just look at what happened over 2010 from the same point in 2009 and 2010.
Let me take just November 2009 to November 2010. I'll look at their M1 money supply.
I am going from November to November, because we'll see it from some of the other charts that we actually have data there.
We don't have December to December for some other charts I am going to use in this video.
This just gives the general idea. If we go from November of 2009, the M1 money supply.... now this is in hundreds of million yuan.
There was 212,493 hundred million yuan. Let's try to convert this into numbers that make a little bit more sense.
You fast forward to November 2010. The M1 is 259,420 hundred million yuan. Let's get calculator out. Now actually make some sense of that.
So a year later, it said 259,420. From that let's subtract what it was before: 212,493.
The difference is 46,927. This is in hundred million yuan.
If you want it in million yuan, you want to multiply it by 100. I think this is pronounced as yuan or yuan. I am not a Chinese pronunciation expert.
That gets us to 4....this is in millions of yuan. If you want it in billions, we can divide this by 1000. Let's divide this by 1000.
So it's roughly 4692 billions or 4.7 trillion yuan increase in their M1 money supply from November 2009 to November 2010.
Pretty dramatic increase. Just so you can put in scope of dollars. I'll use a rough approximation for the current exchange rate: 6.5 yuan per dollar.
So let me divide that by 6.5 to get a rough approximation for what that would be in dollars.
And we get 722 billion dollar expansion in the M1 money supply of China from November 2009 to November 2010.
In the next video, we will see how this compares with their actual increase in foreign exchange, actually foreign assets.
And we can see how much of this would go buy things from other countries or buy foreign exchange from other countries,
and essentially to keep the Chinese yuan devalued.
This is Salman Khan of the Khan Academy for CNBC.
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