China makes Yuan an international currency - Market Skeptics

[Lucille]

*****China makes Yuan an international currency*****

Commerce minister: China not to promote export through currency depreciation

China to try using yuan as settlement currency in some foreign deals: report

Senior official: Renminbi likely to be used as currency for forex reserves

My reaction: Wow...

First, the big news items:

1) China has announced its intentions to make the yuan an international currency.

2) China not to promote export through currency depreciation.

3) China has signed settlement agreements with eight neighboring countries, including Russia, Mongolia, Vietnam and Myanmar, assuming a voluntarily choice of settlement currency.

4) Soon, foreign central will likely be able to use the yuan for forex reserves.

5) China is worried about a possible dollar devaluation


My comments on the story:

1) These announcements were made on Christmas to avoid tanking the dollar.

2) If yuan becomes an international currency, there will a massive migration by central banks from dollar reserves into yuans, because the China's fundamentals are so strong compared to the US.

3) China's announcement that they will not " promote export through currency depreciation" means Chinese financing of our trade deficit is about to come to a very nasty end.

4) From the articles I have read, it is apparent that Chinese exporters are screaming at their government to internationalize its currency so they can bill in yuan instead foreign currencies. Their desire is completely understandable. After all, how would you like to be paid in monopoly money (US dollar)?

5) If the yuan is allowed to compete freely with the dollar, our currency will get crushed.


Again, wow. I have been predicting that China would drop its dollar peg, but now it is actually happening...


Sorry for the dour news. Try to ignore the impending destruction of our currency, and enjoy the holidays.

 

[lodge939]

Didn't they drop the peg in 2005?

 

[danberkeley]

Didn't they drop the peg in 2005?

not completely. it's been a loose peg since 05.

 

[lodge939]

so you can't buy the Yuan like you can yen, dollars, sterling or euros? is that the current situation?

 

[The Grinning Maniac]

Well...that certainly doesn't sound like good news for us. :|

 

[Cali4RonPaul]

Very interesting but I would have disagree with the commentary..

China's fundamentals are so strong?? Obviously not they have internal issues they need to deal with and it can be very serious.

 

[wd4freedom]

Very interesting but I would have disagree with the commentary..

China's fundamentals are so strong?? Obviously not they have internal issues they need to deal with and it can be very serious.

China makes stuff (i.e.-they are fundamentally self-sufficient) ;

We do not make stuff we buy stuff and if this is true then we will be facing a mighty change in the fundamentals of our economy. China will bypass the US dollar and Wall street will essentially become irrelevant (on the global front) overnight........better get the Rosetta Stone course for Mandarin.

 

[raystone]

so you can't buy the Yuan like you can yen, dollars, sterling or euros? is that the current situation?

You can exchange dollars for it in a bank account through everbank.com. you can also go a currency exchange (for example at airports or in downtowns) and buy it.

It's the only think that has increased in value in my portfolio in the last 4 months. (besides Yen)