Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Why Now's a Good Time to Invest in the Chinese Yuan Currency

Currencies / China Currency Yuan May 08, 2013 - 12:32 PM GMT

By: Money_Morning

Currencies

Ben Gersten writes: It's only a matter of time before the U.S. dollar loses its more than 50-year reign as the world's dominant reserve currency, and it will be replaced by the Chinese yuan.

From January 2012-January 2013, transactions in yuan grew 171% in value, moving the yuan ahead of the Russian ruble to 13th place in global currency payments, up from 20th last year.


And you can bet the yuan will soon crack the top 10. In March, yuan payments grew in value 32.7%, compared with a gain of only 5.1% across all currencies.

Part of the reason for the yuan's growth is that at least half of all trade with emerging markets could be settled in yuan by 2013- 2015, which would be up from just 3% in 2010, according to HSBC.

For Money Morning readers, the rise of the yuan shouldn't be a surprise.

For years, Money Morning Chief Investment Strategist Keith Fitz-Gerald has been warning investors about the yuan's emergence as a reserve currency and has suggested ways to prepare for its takeover.

"It's the yuan's world - the West is just living in it, or borrowing from it, as the case may be," Fitz-Gerald said earlier this year. "Demand for the yuan is growing at such a staggering rate that your financial future will be built upon it."

Chinese Yuan Outshines U.S. Dollar

Since the U.S. went off the gold standard in 1971, the U.S. dollar has lost more than 80% of its value.

In contrast, the yuan has risen over 25% against the dollar since June 2005.

"China, with its 1.3 billion consumers and growing global influence, will be the clear winner of the brewing currency war," Fitz-Gerald said. "Right now, the yuan is a partially blocked currency, but that's changing very rapidly as the economic balance of power shifts east. And it will continue to shift for at least the next decade."

By 2015, the yuan is expected to be a fully convertible currency and be trading freely from London. This will really shake up currency markets.

"When the yuan truly steps onto the world's stage in 2015, the game will change forever because there will be a fourth currency that has enough liquidity to absorb global capital flows," Fitz-Gerald said. "The sacred triumvirate of the U.S. dollar, the yen and the euro will shatter."

Some markets are already making the transition.

In a deal announced last month, trade between China and Australia can now be done strictly between the yuan and the Australian dollar, whereas before units had to be exchanged in U.S. dollars. Before this new trade agreement, only the U.S. dollar and Japanese yen were directly exchangeable with the yuan.

And the U.K, France, Russia, Brazil, and India all have some sort of bilateral agreements in placefor trading with the yuan - and Germany is now contemplating joining the crowd.

So before the yuan takes over the financial world, how can investors prepare?
How to Invest in the Yuan World Order

There are several ways investors can profit as the yuan emerges as this century's leading reserve currency.

The most obvious way is buying the yuan itself.

This can be done directly by opening an EverBank Chinese Renminbi World Currency Access Deposit. It's IRA eligible and FDIC insured and there are no monthly account fees. You can open an account for as little as $10,000.

Another way to invest in the yuan is through an ETF like the Wisdom Tree Dreyfus Chinese Yuan ETF (NYSE: CYB).

Even though the yuan has climbed 25% against the dollar over the past eight years, Fitz-Gerald thinks its rise is just beginning.

"Many people are tempted to think the yuan is all about the money itself," Fitz-Gerald noted. "But in reality, it's a byproduct of yet more trade growth outside traditional western trading channels and payments methods."

Further Reading: For a more detailed look at how the yuan is going to affect your financial future, check out Fitz-Gerald's analysis: Why Your Financial Future Will Be Built Upon the Chinese Yuan.

Source :http://moneymorning.com/2013/05/07/invest-in-the-chinese-yuan-before-it-takes-over-the-financial-world/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in