Under the watchful eyes of the whole world, the Federal Reserve has started the second wave of quantitative easing (QE2) in an effort to bail out the US economy, which does not seem to have improved as expected after the first round of QE. Whether QE2 will have sufficient impact on the US economy remains to be seen, but it has already caused uneasiness in this part of the world. Asia, being the least affected by the financial crash in 2008, has been enjoying a relatively steady recovery since then, as most Asian economies (except Japan) have had healthy growth in last two years. Surplus capital pumped by the Federal Reserve into the economy will have profound effects on other countries, notably the fast developing China and the more established economies such as Hong Kong and Singapore, as these are the destinations of much of the hot money.