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May 23, 2008


Controlled Appreciation of the Yuan

You can see that the Sequential count is meaningless when applied to something like the Chinese Yuan, which is being allowed to appreciate at a very specific rate. I agree with Jimmy Rogers’s forecast that the CNY will eventually reach two to the dollar: “Don’t sell your renminbi, because it will go a lot higher in the next 20 years.”



(CNY, weekly chart)

This entry was posted on Friday, May 23rd, 2008 at 10:50 am (utc+8) and is filed under Currencies.

9 Responses to “Controlled Appreciation of the Yuan”

  1. Chris said:
    May 23rd, 2008 at 10:35 pm

    Chairman,
    For the average joe, what is a decent investable proxy for the Yuan?

  2. Laswyguy said:
    May 24th, 2008 at 12:23 am

    More reason to own Chinese real estate if you swing it.
    Income + appreciation as the ultimate inflation hedge.

  3. adam said:
    May 24th, 2008 at 2:44 am

    i’m really pleased you agree with jimmy rogers like that means anything but how do you, and jimmy rogers for that matter, come to ur conclusion, other than of course finger in the wind? rogers predicted the end of indonesia about 10 years ago. he’s said fanny mae was going to 5. Rogers is a polemists and a marketer to boot. Give me substance. Where’s the beef????

  4. C. Maoxian said:
    May 24th, 2008 at 6:30 am

    @Chris: I get this question about once a day and there is no easy way for the Average Joe to get CNY … maybe the best thing is to buy Chinese companies listed in Hong Kong (but don’t pay the wrong price).

    @Laswy: Yes, but again, it all depends on what you pay for those real estate assets. Someone just offered us US$830,000 for our Beijing apartment and I thought to myself if these fools ever go to a million they’re going to force my hand.

    @adam: It’s just a guess, there is no beef. (You sound aggrieved — cheer up, man.)

  5. VC said:
    May 24th, 2008 at 5:20 pm

    CM,

    Here a few new currency ETFs. WisdomTree Dreyfus Chinese Yuan Fund

    CYB
    WisdomTree Dreyfus Indian Rupee Fund ICN
    WisdomTree Dreyfus Brazilian Real Fund BZF
    WisdomTree Dreyfus Euro Fund EU

  6. C. Maoxian said:
    May 24th, 2008 at 6:00 pm

    VC: Thanks, I’m aware of CYB but those funds have problems with “roll yield,” I think (plus they have expensive “management fees” which keep the managers’ kids in private schools, riding lessons, and European vacations — do you want to pay for that?)

  7. shaun60 said:
    May 24th, 2008 at 6:37 pm

    Another problem is volume. There are days where the Indian Rupee Fund have no trade for the day (example 20080519 or 20080401 (april fools day)).

  8. C. Maoxian said:
    May 24th, 2008 at 6:48 pm

    shaun: Yes, good point, the liquidity of even the most active currency ETFs, like FXY for example, is lacking.

  9. VC said:
    May 26th, 2008 at 8:41 am

    Well, I think I will have to pay some % to get in the Yuan. The issue is which option provides the lowest % fees and closely matches Yuan.

    I am from India and like 8.75% from an Indian bank (plus dollar depreciation effect). I am trying get some Yuan. Everbank is not the best option. I thought about Merk Asian currency fund. However, I have not done a lot of research. I wonder if there are low cost ways to get into Yuan.

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