China just launched a new salvo in the global currency war. Here’s how to profit.
The era of steady yuan appreciation is drawing to a close…
The Chinese currency, called the yuan or renminbi, is driven by policy makers and not the market. Every day, the Chinese government sets a reference point at which the yuan will be traded. The price of the yuan moves in a band… 1% over or under that reference point.
Since 2005, China has steadily increased the strength of the yuan. Investors could make easy money trading their weak U.S. dollars for an appreciating yuan. It’s been safe and profitable for investors like Jim Rogers during the global economic crisis… but the Chinese government says no more.
China just launched a new salvo in the global “currency war.” An appreciating yuan makes Chinese exports more expensive. And since China still is the “world’s workshop” – making everything from nail clippers to iPhone components – the Chinese central bank is not about to lose this advantage too fast. The transition to a more mature economy will take more time.
This devaluation caused a 0.95% sell-off in the yuan in under a week… the largest drop in 20 years.
But many famous investors, like Jim Rogers, still bet on the yuan in the long term. The Chinese economy is the second largest in the world. It’s still growing. It’s still projected to overtake America’s before 2050.
Steve Sjuggerud, editor of True Wealth, is another who sees a bright future for China and its currency. He believes a particular yuan investment today may enjoy more than 200% upside in the coming years. If you would like to learn how to protect and grow you money by investing in the yuan… without opening a foreign bank account… or speculating in the Foreign Exchange market… click here.
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