Search This Blog

Sunday, March 06, 2011

Get To Know China - Our Days Our Numbered

The End Game


I don't know how long the death of a currency takes. There is also the X factor with the Chinese government - can we really trust them? People might wonder to themselves - which might limit the position companies, countries and richies are willing to take in the Yuan - the currency of China. Until recently, China was very protective of its currency, however, over the last year or so, China has been evidently preparing the Yuan for its debut in world markets. First, it was sent on a date with the Russians and Malaysians, and now China appears to be planning the Yuan's debutant ball.

This is utter speculation on my part, but I am wondering whether the sudden love affair between Barbados and China has anything to do with Barbados being a favorite amongst those into off-shore banking. I can imagine all those with big fat US $$$ denominated bank accounts in Barbados are doing the get-me-out-of-the-dollar-dance.

Whispering sweet nothings to each other: "Chen said that since diplomatic relations were set up between China and Barbados, political trust between the two countries has deepened day by day, cooperation in all sectors born abundant fruits, and the two countries supported each other on important international and regional issues."

Once the Yuan has been introduced into society, assuming it makes a favorable impression, the world can abandon the US Dollar as the primary means of conducting international business. When this happens, the dollar will go into a free fall, and god knows what will happen to our economy.

The fact that we import roughly 60% of our oil does not bode well for our future. Currently we enjoy somewhat of an oil subsidy due to our currency's reserve status. (If everybody has to first buy $$s to trade with another country, that keeps the demand for $$s strong, and the "price" of the dollar high. The price is the exchange rate relative to other currencies.) When that demand goes away, the price drops and everything outside the $$ world becomes more expensive for us - including oil.

I can't think of an economic sector in the US or any other country for that matter that does not require energy, usually oil, to function. We have enough reserves ourselves, however, the environmentalists have vilified the oil companies to the extent that much of our oil is left in the ground. Don't get me wrong, I love a clean environment, but I think we are going to regret listening to them.

I really hope I am wrong about all of this. If somebody can come up with some reasons why I am, please post them. I would much rather be proven a fool than get to say "I told you so".

To prepare for this, you are going to need to buy some hard assets - stuff. Gold, silver, commodities, although I have no idea how to buy commodities, other than at the grocery store. I buy gold and silver because it is pretty and shiny and you can wear it to dinner, but what shall I do with pork bellies?

The other thing I am going to try to look into is opening a bank account with the BOC - Bank Of China. They've got a branch next door in Los Angeles, and I hear you can open a savings account denominated in Yuan. You have to go there, though. There is another branch in New York City, if you are over there. If anybody tries this before I do, please let me know how it went?

Really Tired RH

1 comment:

Anonymous said...

Hello-

I was wondering if you accept guest posts? I recently came across your site and it seems you have a genuine concern about health and informing others about healthy habits. I have an article/event that I would like to submit in regards to informing the younger generation about health. It is about dancing and how it can be a fun way for kids to exercise. Primrose Schools is hosting a Dance Off competition (with proceeds going the Children's Miracle Network Hospitals) for families. I think it is something you and your readers would enjoy. If you have any questions feel free to contact me! I look forward to hearing from you!


Thank you,
Emily Patterson
Communications Coordinator
epatterson@primroseschools.com