The coming flood of Yuan and Chinese Gold Demand

[traelin0]

While China is taking a greater portion of our financial attention on a daily basis, it seems to us that the sheer size of China and its continued growth has not been factored into the world economic perspective, even now. One of the consequences of profit driven capitalism in the past was the relocation of manufacturing from high-cost, developed countries to the lower cost country of China. U.S. corporations that did that, have enjoyed better-than-ever profits, but in the process have educated new, Chinese, lower-priced competition that will overwhelm us all in the future. The enrichment of China and its arrival on the world scene will surpass the U.S. as the largest world economy by 2020 at the latest [we would not be surprised if this happened even before 2015]. This will trigger a financial tsunami that will change they way we think and invest.

The Internationalization of the Yuan – Progress report

The Chinese government has allowed the Bank of China Ltd’s to allow trading in Yuan for the first time in the U.S. Individuals can convert up to $4,000 a day without limit for now, on the amount of money businesses can convert, so long as they’re engaged in international trading, the report said. We at the Gold Forecaster have been following the steady progress of the internationalization of the Yuan since it began. The goal that seems likely to be reached sooner rather than later will be for the Yuan to be a competing global reserve currency. Effective immediately, Bank of China's U.S. individual customers can now open a Yuan denominated savings account with a $500 equivalent minimum balance. The bank also offers certificates of deposit in 6-month and 1-year terms with a minimum of $1,000 equivalent. Now watch the rush. We don’t believe that those who do it hoping to experience an appreciation of the Yuan will see that. But such investor objectives will create a huge demand for the Yuan.

Read more here.

Grr, so frustrating...the Bank of China has two branches that I am aware of in America: Los Angeles and New York. So if I wanted to open an account with them, I'd have to go to Chinatown in person and open it.

For those interested in the NY or LA areas, the bank's link is here:

www.bocusa.com/portal

[handyman2]

No doubt China is and has been becoming a capitalist economy. What I wonder is just how long they can maintain the growth? It is becoming evident that the demand for higher wages and capitalistic benefits by the working class in China is on the rise.
Inflation costs aside from labor costs will impact China as the rest of the world. Would this likely bring the cost competitive edge China now enjoys more in line with other countries and actually decrease China's competitive edge somewhat?

[Politically_Incorrect12]

Jan 16, 2011 20:21:22 GMT -5 handyman2 said:

No doubt China is and has been becoming a capitalist economy. What I wonder is just how long they can maintain the growth? It is becoming evident that the demand for higher wages and capitalistic benefits by the working class in China is on the rise.
Inflation costs aside from labor costs will impact China as the rest of the world. Would this likely bring the cost competitive edge China now enjoys more in line with other countries and actually decrease China's competitive edge somewhat?

I am assuming that at some point, the workers in China will start demanding higher pay. Of course that is assuming that China's government allows it.