hot money
Volatile investment funds
Hot money is capital that moves rapidly between financial markets seeking the highest short-term returns.
Investors shift hot money quickly in response to interest rate changes or economic instability, making it volatile and potentially destabilizing to economies that receive it: The country's currency collapsed when hot money fled after the rate cut.
The term sometimes extends to funds obtained illegally that need to be moved or laundered.
Rapid outflow of investments
- carry tradeBorrowing cheaply to invest higher
- arbitrageExploiting price discrepancies
- currency speculationBetting on exchange fluctuations
- foreign exchangeTrading between national currencies
volatility · inflows · outflows · hedge funds · liquidity · leverage · emerging markets · risk appetite
Zero-rate wealth jurisdiction
- offshore accountsBank deposits in other countries
- black marketIllicit trading system
- sanctions evasionAvoiding imposed trade restrictions
- shell companiesLegally registered but inactive businesses
smurfing · wire transfers · numbered accounts · beneficial ownership · financial crime
capital flight
Rapid outflow of investments
- carry tradeBorrowing cheaply to invest higher
- arbitrageExploiting price discrepancies
- currency speculationBetting on exchange fluctuations
foreign exchange · volatility · inflows · outflows · hedge funds · liquidity · leverage · emerging markets · risk appetite · repatriation
tax haven
Zero-rate wealth jurisdiction
- offshore accountsBank deposits in other countries
- black marketIllicit trading system
- sanctions evasionAvoiding imposed trade restrictions
shell companies · smurfing · wire transfers · numbered accounts · beneficial ownership · financial crime
- global financeinternational banking, financial hubs, central banks, capital flows, exchange rates
- trading slangbull, short, long, dip, pump
- forexforex, exchange rate, currency trading, currency exchange, foreign exchange
- Asian CrisisThailand, Indonesia, South Korea, Malaysia, currency collapse
- capital flowscapital flows, inflows, outflows, capital flight, FDI
- money slangbucks, dough, moolah, cheddar, cash
hot moneyinfrastructure investment
Spending on foundational systems
real estate investment · physical plant · direct investment · bricks and mortar · private equity
hot, money, hotter, hottest, hotly, hotness, moneys, monies, moneyed