In the last video, we saw that China had increased its M1 money supply from November of 2009 to November of 2010 by roughly $700 billion. What I want to do in this videos compare that to it's increase in foreign assets. So if we move up here, and once again, all of this data is straight from the website of the Peoples Bank of China. And this is the URL right over here. And so you could get it for multiple years. and actually they have a ton of other statistics. And so this chart tells us their foreign assets and foreign exchange. And I'm actually going to focus on foreign assets, because when they print currency, and that's to say with their printed Yuan they go buy dollars. With that dollar they could buy-- well, they could keep it in dollars. They could buy treasury bonds. Or they could just go buy US assets. So assets are the best measure of what they're holding that is denominated in other currencies. So let's look at their growth from November of 2009 to November of 2010. And this is why I picked November, because we didn't have December of 2010 in this chart. So foreign assets, and once again, this is in hundred million Yuan. Foreign assets in November, 2009 183,651, and that's in 100 million Yuan. And then you fast forward to November, 2010 it is 212,733. So let's, once again, put that in terms that make a little bit more sense, at least for someone who's used to dollars. And I used a very rough approximation for the US Yuan exchange rate in the last video. It's actually closer to 6.58 now. But it gets us to about$700 billion increase in money supply that we got in the last video. Now, let's check this out. So we end up at 212,733 hundred million Yuan in foreign assets, November, 2010 minus 183,651. So that's the difference. Now this is in hundred million Yuan. So let's multiply by 100. And so this will be in million Yuan. Now if we divide this by 1,000 this will give us billion Yuan. So it's actually close to-- its 2,900 billion Yuan. So it's almost three trillion Yuan. And if we want to convert this into dollars-- I'll just use the same 6.5. I could use 6.58. Oh, let me just do 6.58. So divided by 6.58, to put it into billions of US dollars. So you see that there is a $440 billion increase in foreign assets when denominated in dollars. So let's think about that. So let's think about this. M1, so from November, 2009 to November, 2010 M1 was up by approximately$700 billion. And the foreign assets were up by approximately, what was that number that I just had there? Approximately \$440 billion. So most of the expansion of their monetary base, of their M1 base, was to go out and buy foreign assets over the course of 2010. And the balance is really just to kind of support the growth of the actual Chinese economy. But most of it is to go out there, buy foreign assets in other currencies, and actually help keep the Yuan devalued. This is Salman Khan of the Khan Academy for CNBC.