Comments on: How the New ‘Yuan Carry Trade’ Will Add to China’s Global Muscle, and Possibly Even Accelerate the U.S. Recovery

By: How to Profit From China's "Hot Money" Strategy

How to Profit From China's "Hot Money" Strategy — Fri, 17 Jul 2009 08:01:35 +0000

[...] an increasingly fragile U.S. dollar. Expect Beijing to be especially active in the use of the multi-country-swap agreements it recently put in place as a means to this [...]

By: By Stepping Up to Sell China’s Bonds, Standard Chartered and HSBC May Accelerate the Yuan’s Acceptance as a Global Currency

Sat, 06 Jun 2009 12:01:36 +0000

[...] Money Morning Investment Director Keith Fitz-Gerald says this strategy could accelerate China’s evolution into a global economic superpower. [...]

By: China Seeks to Dethrone the Dollar, Transforming the Yuan into the Dominant Global Currency

Wed, 27 May 2009 17:11:19 +0000

[...] agreements reached between China and Taiwan, the Hong Kong yuan-trade agreements and the “yuan carry trade,” to name a few – only reinforce the effort China is putting forth to achieve this [...]

By: walter (jock) mitchell

walter (jock) mitchell — Tue, 19 May 2009 16:03:49 +0000

excellent article. when and where do i lineup for my yuans?
dollars? what are they?

By: Joost van Breemen

Joost van Breemen — Mon, 18 May 2009 19:10:57 +0000

So far I know, the China’s are sitting on a dollar cash pile, which their government does not want to buy Western assets with. Falling interest rate and lost of buying power (-5% interest and inflation 2% for the USA, Europe -2,7 and 2%) is not encouraging figures. Their nearly 2 trillion saving pig cannot be used the communist way. They got clever and will be able to give it to their half free or half tight down entrepreneurs. That on its own, nothing wrong with. The turn over of Western companies are good for, between minus 60 to 80% of their peak trading value. The P/E has to adapt accordingly. This correction momentum is good for two to three years. The longer China wait ( a trade character) the cheaper the companies. This means with a lousy dollar, you can buy lousy companies. Perfect for the Chinese. 30 billion on 2 trillion is 66 two quarters or 33 years. That is dumping the dollar! I don’t see speedier times to start borrowing the dollar unless hyper inflation kicks in.

By: cebu sun

cebu sun — Mon, 18 May 2009 05:01:30 +0000

dee Tee
I think he means the distinction btw gold bugs placing too high a percentage (e.g.80-90%) of assets into gold i.e. betting it all, vs the proper prudent investing of but 5-10% in gold.

By: Dee Tee

Dee Tee — Sat, 16 May 2009 16:24:23 +0000

A little more elaboration regarding……

….this could wreck
the gold bugs who are betting the farm but not
investing in the precious metal??

By: Gerald Spencer

Gerald Spencer — Thu, 14 May 2009 18:19:29 +0000

Economic value is created only when you grow something in the earth, extract something from the earth, or make (manufacture or construct) something that is consumable (or useful). Transportation/distribution/warehousing/tax/sales/delivery/packaging costs are added to the value (cost) of the product that was initially created by these basic creative efforts.

Industrious nations like China grow wealthy and secure by making enough products to support their needs on their farms, factories and mines, plus earn additional currency by creating additional wealth by exporting products that they manufactured. Do US farms, factories, and mines manufacture, grow or mine enough products to maintain us? NO!!! Could They? YES! Do we need to import additional products and increase the current trade deficit if we do not want to work to make whatever we want to consume? YES!!!

China is also winning the technology war in addition to winning the economic war! The USA is self destructing.

The Yuan will be the “Gold Standard” and then replace the US Dollar for international trade after the US government prints so much money that the dollar becomes worthless.

Gerald

By: John

John — Thu, 14 May 2009 16:51:24 +0000

Great article! So what do I do right now to take advantage of this development?

By: A.M Deist

A.M Deist — Thu, 14 May 2009 12:58:45 +0000

Interesting thoughts, but unlike President Bush, I think the chinese are smart enough to know that “Fool me once, shame on you, fool me twice, shame on me!” The United States is basically bankrupt, with a significant majority of its corporations not being liquid. Capitalism has motivated the American people, the corporations and the governments to bleed in the red until someone or something shut everything down. Why in their right mind, would China invest in a failed State? Would you give credit or buy into a family that was using credit cards to pay interest on other credit cards? If you would, I have lots of neighbors that want to talk with you. Our media has been proporting that Americans are used to spending beyond their means, and any increases in savings won’t last very long. I would argue that the opposite is true. Any continuation of spending beyond ones means will be shut down in rapid order. If consumerism is required to maintain American leadership in the world, tuck your head between your legs and kiss your ass goodbye!