Yuan, Two, Three....

[xFiFtyOnE]

Anybody stacking up Yuan?

[Seraphim]

Better off just going gold.

Lest we forget that the Yuan in it's current form is hopelessly tied to the USD.

Don't get me wrong, of all the currencies in the world, the Yuan is a great pick. But at this point...why save in paper when you can save in gold/silver?

Saving in paper when the new monetary order is just around the corner...seems like a waste.

[xFiFtyOnE]

I've got alot in silver. Was just kicking the idea around about the Yuan. I've been reading about how China is buying up gold big time. If that's the case it would seem they would have something else to peg the Yuan to very soon. Just got me curious.

[Zippyjuan]

Given that the yuan is still pretty tightly tied in value to the US dollar chances of making money that way are quite slim- unless you expect the yuan to finally depeg from the dollar. But if it does, the yuan would most likely depreciate- not apreciate- against the dollar since the supports from the Chinese government keeps it at an artificially high level.

[Steven Douglas]

I own a lot of yuan. In China, and only because I am paid in RMB. Earning it is one thing - getting it freely in and out of China is another altogether. And no matter what China does with it's gold, it is not going to "back" the yuan (not in any directly redeemable sense), any more than U.S. debt backs it, except as one fiction propping up another.

I look at yuan like any other fiat paper. They are all essentially worthless and in a state of freefall with no floor under them (unless zero is a floor) - the only reason the yuan appears to be in a slower state of free-fall relative to the rest - China actually raised interest rates, and did a lot of the things Bernanke COULD have done - but only as a delay of the inevitable.

China is like the short fat girl that spackles on the makeup with a trowel, wears the tallest pumps she can find, and sucks everything into outfits that are three sizes too small, holding her breath until she is blue in the face, waiting for the "I DO", so that she can finally just let it all hang out and be herself again. China is doing everything it can to emulate the Western model, and the American Fed model in particular, right down to hoping that if they just maintain the illusion of strength longer than everyone else, they just might have a shot at World Reserve Currency status, and the ability to siphon wealth from the West using a Chinese version of the same machine. Yeah - I just can't picture that ever happening.

[Mogambo Guru]

Given that the yuan is still pretty tightly tied in value to the US dollar chances of making money that way are quite slim- unless you expect the yuan to finally depeg from the dollar. But if it does, the yuan would most likely depreciate- not apreciate- against the dollar since the supports from the Chinese government keeps it at an artificially high level.

The Yuan has appreciated ~37% against the US$ the last 6 years.

[Steven Douglas]

The Yuan has appreciated ~37% against the US$ the last 6 years.

It naturally appreciated much more than that in terms of actual pressure. The appreciation we saw every step of the way was a deliberate repegging by China, which could still continue a lot more if the Chinese didn't care about seeing more of their exports dry up and get siphoned off to Vietnam and others waiting for their turn in the lower currency value barrel.

[Mogambo Guru]

^ I agree

[Zippyjuan]

The Yuan has appreciated ~37% against the US$ the last 6 years.
Since July 2008 it has only gone up seven percent- from 14.67 to 15.72. http://www.google.com/finance?hl=en&rlz=1T4GGHP_enUS447US448&q=CURRENCY:CNYUSD&ei=qRjLTs3NBOa42gWe7pTKDw&sa=X&oi=currency_onebox&ct=currency_onebox_chart&resnum=1&ved=0CCsQ5QYwAA#

[Steven Douglas]

Since July 2008 it has only gone up seven percent- from 14.67 to 15.72. http://www.google.com/finance?hl=en&rlz=1T4GGHP_enUS447US448&q=CURRENCY:CNYUSD&ei=qRjLTs3NBOa42gWe7pTKDw&sa=X&oi=currency_onebox&ct=currency_onebox_chart&resnum=1&ved=0CCsQ5QYwAA#

One number is the actual value of one to the other over time, which is about 28%, or 4.5% per year over the past six years. However, that does not factor in Chinese inflation of 5-10% over the past few years, meaning that its actual real appreciation is closer to the number Mogambo posted.

See Forex Blog (http://www.forexblog.org/category/chinese-yuan-rmb) for more on this.

[emr1028]

I don't trust the Yuan... it's been massively manipulated through so many different means, and the Chinese are already experiencing bad domestic inflation coupled with a lot of debt problems. I don't think it's a good call.

[Zippyjuan]

One number is the actual value of one to the other over time, which is about 28%, or 4.5% per year over the past six years. However, that does not factor in Chinese inflation of 5-10% over the past few years, meaning that its actual real appreciation is closer to the number Mogambo posted.

See Forex Blog (http://www.forexblog.org/category/chinese-yuan-rmb) for more on this.
If you are buying a currency and holding it hoping to make money in your own currency, the value againg the currency (the US dollar) would indeed be the measure you want. Inflation in China (though it may effect the exchange rate unless it is pegged as the Yuan is- and rising inflation in China should tend to lower, not raise, the value of the yuan ) doesn't really matter as far as the investment is concerned.

Thanks for sharing the information.

[future]

Is Bank of china is a good place to buy yuan???

[Steven Douglas]

Is Bank of china is a good place to buy yuan???

Yes, but the only location know of that you can do that is their New York branch ( http://bocusa.com ), which deals in RMB made available through Hong Kong. I have an account with BoC, but it's a branch in Wuxi, Jiangsu Province in the mainland. I don't have direct access to that account through the USA branches (NY and LA). Like I said, I get paid in RMB, but it's in China, and getting it in and out of the country isn't all that easy.

If buying from the NY branch is inconvenient and you just want to trade in RMB (short or long), without actually owning 100 RMB notes, here are some tips on how to do that:

http://www.minyanville.com/businessmarkets/articles/forex-traders-yuan-quantitative-easing-money/6/13/2011/id/35131

[Zippyjuan]

Looks like if you don't have a bank account with their New York branch you can exchange up to $2000 a day or $10,000 a year through them at that location.
http://www.usatoday.com/money/world/2011-01-12-chinese-bank-yuan_N.htm

Chinese bank lets U.S. customers buy, hold yuan

Updated 1/12/2011 3:04 PM


BEIJING — A state-owned Chinese bank says its New York City branch has begun offering accounts denominated in China's tightly controlled yuan in a move to expand the currency's global reach.
Bank of China says customers of its Chinatown branch in New York will be allowed to trade yuan for dollars and can wire yuan to or from China.

In a statement on its website, the bank said account holders can exchange up to the yuan equivalent of $4,000 a day, with a limit of $20,000 a year; the limits are half those levels for non-account customers.

"They are trying to expand the scope of people who can hold renminbi (yuan) and that increases demand," said Daniel Hui, a foreign exchange strategist for HSBC in Hong Kong.

Still, Hui said Chinese restrictions on money flows into and out of the mainland mean foreign customers who want to trade yuan will be limited to the Hong Kong market and currency available there.

[Mogambo Guru]

Since July 2008 it has only gone up seven percent- from 14.67 to 15.72. http://www.google.com/finance?hl=en&rlz=1T4GGHP_enUS447US448&q=CURRENCY:CNYUSD&ei=qRjLTs3NBOa42gWe7pTKDw&sa=X&oi=currency_onebox&ct=currency_onebox_chart&resnum=1&ved=0CCsQ5QYwAA#

... for 2 of those 3 years you are citing was during the "credit crisis" where they stopped letting it appreciate for "stability" until the crisis had "passed."

look at your chart extended out to 5 years. 37% was incorrect though.. looks like about 30%?

Anyways, it is my belief that it will continue to appreciate against the dollar.