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Originally Posted by CyberSEO
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The way China is going RMB/USD, yuan will (i suppose) someday be 1/1 (500% gain from here). A lot of my friends are investing in Chinese property purely for exposure to the long term expected gains in the RMB quite apart from anything else.
But its a long way off. The USD is on the decline but its a very long drawn out thing. RMB is already well on its way to become a strong trade currency with a lot of bi-lateral swap arrangements. However, to be a reserve currency you need investable assets (bond market) as well as a strong developed rule of law. China has neither, at this stage.
There's also speculation that China is clandestine in its aim to go to a gold standard. I'm not so sure about that as most of the smarter analysts suspect its more of hedge against a weakening USD (China is the biggest holder of US debt) but there is strong evidence that China is accumulating gold at a record pace...