Posted on 02/05/2011 11:45:26 AM PST by Fred
When the state-owned Bank of China Ltd. (BOC) recently announced that it would begin allowing US-based customers to trade the Chinese yuan here, it represented the biggest step yet in China's ongoing campaign to build global acceptance for its currency.
That desire to boost interest in the yuan in the global currency and trade markets is bolstered by the fact that Beijing's foreign-exchange reserves have now reached a staggering $2.8 trillion.
For investors, this new China yuan policy marks the beginning of a new era in global investing -- in commodities, in import-export activities, and in the trading of the currencies themselves.
In short, I believe this new currency policy is setting us up for some of the best profit plays that we'll see in our lifetimes. So it's not investment hype to refer to it as the "trade of the century."
The Foundation for Change
As I've been reporting for some time now, Beijing has been shrewdly building up to this for years -- using subtle policy shifts, underplayed public statements, and the quiet establishment of currency swaps around the Pacific Rim to hint at what it was planning for the yuan.
Examples of the policy shifts include:
* The signing of billions of dollars worth of currency-swap agreements with international trading partners authorizing the use of yuan to settle payments for commercial transactions. These pacts have prompted analysts to predict that, within five years, as much as 30% of China's $2.3 trillion in annual exports could be settled in yuan rather than dollars, up from just 1% today.
(Excerpt) Read more at minyanville.com ...
The yuan is the new dollar.
Invest in the yuan!
What will really sink the dollar is when they start allowing Americans to open accounts without any IRS reporting. And the US won’t be the only one to take it on the chin when that happens. Switzerland, Luxembourg, and the Caribbean tax havens will all go out of business since they have all betrayed their American customers in recent years.
Yeah, well, I'm not sure I want to find out what the Chinese penalty is for early withdrawal on your 401K!
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