{"id":2945,"date":"2011-01-15T05:32:48","date_gmt":"2011-01-15T12:32:48","guid":{"rendered":"http:\/\/www.jasonapollovoss.local\/?p=2945"},"modified":"2018-08-16T17:13:53","modified_gmt":"2018-08-16T21:13:53","slug":"got-yuan","status":"publish","type":"post","link":"https:\/\/jasonapollovoss.com\/web\/2011\/01\/15\/got-yuan\/","title":{"rendered":"Got Yuan?"},"content":{"rendered":"

For its U.S.-based customers the\u00a0Bank of China has begun allowing\u00a0trading in\u00a0the Chinese currency, the yuan.\u00a0 This is clearly a long-term focused goal of trying to make the yuan a competitor for the U.S. dollar as the global currency in which trading is conducted.<\/span><\/p>\n

 <\/p>\n

Importantly, to make this a reality the Chinese are going to have to let the yuan rise in value relative to the dollar, the euro, and the yen.\u00a0 Right now the yuan is held at a fixed exchange rate relative to other currencies and is not allowed to appreciate.\u00a0 This makes Chinese goods artificially cheap.\u00a0 That means there is lots of buying of those goods with non-Chinese currency.\u00a0 That means that China has accumulated massive, massive reserves of the\u00a0money of other countries.\u00a0 In exchange, China invests those monies in the debt of the nations who have these massive trade deficits with it.<\/span><\/p>\n

 <\/p>\n

So the announcement that your average Jane and Joe can trade up to $4,000 worth of yuan is a harbinger:<\/span><\/p>\n

 <\/p>\n

1.\u00a0 The Chinese are going to eventually be the largest economy on the planet, and…<\/span><\/p>\n

 <\/p>\n

2.\u00a0 Eventually the yuan will be allowed trade freely and at that point it will very likely appreciate in value rapidly.<\/span><\/p>\n

 <\/p>\n

3.\u00a0 A moment where the Chinese\u00a0economy will have to handle the rise in prices of its goods and services.\u00a0 That is, a moment where they have to handle contraction.<\/span><\/p>\n

 <\/p>\n

This news is a milestone, but the distance to be traveled promises to be long.<\/span><\/p>\n

 <\/p>\n

Jason<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

For its U.S.-based customers the\u00a0Bank of China has begun allowing\u00a0trading in\u00a0the Chinese currency, the yuan.\u00a0 This is clearly a long-term focused goal of trying to make the yuan a competitor for the U.S. dollar as the global currency in which trading is conducted.   Importantly, to make this a reality the Chinese are going to […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3],"tags":[],"class_list":["post-2945","post","type-post","status-publish","format-standard","hentry","category-the-blog"],"_links":{"self":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/2945","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/comments?post=2945"}],"version-history":[{"count":0,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/posts\/2945\/revisions"}],"wp:attachment":[{"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/media?parent=2945"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/categories?post=2945"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jasonapollovoss.com\/web\/wp-json\/wp\/v2\/tags?post=2945"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}