Monday, April 28, 2014


THE RISE OF CHINESE CURRENCY YUAN, By Shan Saeed, I love this news story that went unreported in WSJ, FT, NYT or Forbes. Latest sign of a move away from the dollar as a reserve currency is that China and South Korea recently came to an agreement that allows firms to settle deals in either the Chinese yuan or the South Korea won instead of the U.S. dollar. The agreement is part of a push among emerging countries to internationalize local currencies after the global financial crisis. According to Bloomberg.: "Fed up with what it sees as Washington's malign neglect of the dollar, China is busily promoting the cross-border use of its own currency, the yuan. Chinese leadership will remove capital controls the amount she will achieve Gold target of 10,000 MT in the next 2 years. Yuan is the only currency that appreciated 35% against USD since 2005. CHINA's STRATEGIC GAME PLAN IN ACTION---Follow the Chinese leadership to meet your financial goals Displacing the dollar will reduce volatility in oil and commodity prices and belatedly erode the ‘exorbitant privilege' the United States enjoys as the issuer of the reserve currency at the heart of a post-war international financial architecture it now sees as hopelessly outmoded.In fact, in the past couple years, China has signed international currency agreements with Germany, Brazil, Russia, Australia, Japan, Chile, the United Arab Emirates, Pakistan, Saudi Arabia, Kuwait, Peru, India and South Africa. Japan and India also recently signed a currency deal linking their currencies closer together, and lessening their dependency on U.S. dollars. These agreements are part of a trend that started a few years ago, when a group of the world's most powerful countries, including China, Japan, Russia, and France, got together for a secret meeting – WITHOUT the United States being present or even knowing about the meeting. According to Sam Zell, the 60th richest man in America according to Forbes Magazine, said on a rare interview with CNBC. He said: "My single biggest financial concern is the loss of the dollar as the reserve currency. I can't imagine anything more disastrous to our country. I'm hoping against hope that ain't gonna happen, but you're already seeing things in the markets that are suggesting that confidence in the dollar is waning. I think you could see a 25% reduction in the standard of living in this country if the U.S. dollar was no longer the world's reserve currency. That's how valuable it is." He is my fellow alumni from Uni of Chicago, Booth School of Business, USA. One of the top most respected Middle East reporters Robert Fisk reported on this event in Britain's newspaper, The Independent. Here's what he wrote: "In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealing for oil, moving instead to a basket of currencies including the Japanese Yen, Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar." I recently spoke to a Chinese banker who said: These plans will change the face of international financial transactions. America must be very worried. You will know how worried by the thunder of denials this news will generate. HAPPY INVESTING IN CHINESE YUAN, THE NEW GLOBAL CURRENCY.