The Yuan that I Want

Jim Rogers has been bullish on China for years, and indeed now has a new

book out entitled "A Bull in China: Investing Profitably in the World’s

Greatest Market". So it’s hardly surprising that he sees

the country’s currency rising. What is interesting is that he seems to be

able to simply invest in the yuan:

Jim Rogers, chairman of Beeland Interests Inc., said he is shifting all his

assets out of the dollar and buying Chinese yuan because the Federal Reserve

has eroded the value of the U.S. currency…

The Chinese currency, known as the renminbi, or yuan, is "the best currency

to buy right now," Rogers said. "I don’t see how one can really

lose on the renminbi in the next decade or so. It’s gotta go. It’s gotta triple.

It’s gotta quadruple."

This seems like a good bet to me. Chinese stocks are scary, volatile things,

but the currency is massively undervalued and will inevitably rise strongly

over the long term. Which just leaves one question: How on earth does one go

about buying yuan?

I suspect that it’s very difficult, but that it is possible. (Jim Rogers seems

to be doing it.) Chinese one-year domestic interest rates are 3.87%,

which is high certainly enough to make a yuan investment attractive. So can

someone set up an NYSE-traded ETF linked to yuan deposits, giving US retail

investors the ability to follow Rogers into China? If you go to,

as Rogers advises in his book, you can put your money in a Chinese renminbi

money-market account, but annoyingly it pays no interest. Is that the only way

to get pure yuan exposure?

(Also via Yves)

This entry was posted in foreign exchange. Bookmark the permalink.