The Chinese Yuan recently broke through the 7.00 level in the spot market. The 12-month non-deliverable forward contract, priced at 6.2864, is looking for over a 10% gain from here. My ability to pursue certain opportunities in the US markets is now being thwarted because I refuse to exchange my CNY into USD.

This chart also explains why the various QDII programs have been abysmal failures — few Chinese are foolish enough to invest abroad given the undervalued yuan.

Click to enlarge

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