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The Rise of the Chinese Yuan

July 22, 2014

    Investing Q&A with Jerry Robinson

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    The Rise of the Chinese Yuan

    On today’s podcast, Jerry Robinson provides a timely report on the U.S. dollar status as the global reserve currency. He discusses:

    The Chinese yuan growing stronger. The Swiss National Bank and China agreed on a currency-swap deal on Monday. Last year China signed several agreements with other countries for direct currency deals. The yuan is nowhere close to challenging the dollar for global supremacy, but every gain counts and is another nail in the dollar’s coffin. Many commentators online predict the day of the dollar collapse, but no one knows for sure. It’s going to be gradual, as each story that comes out like this currency-swap deal will snowball and create less demand for the dollar. (By the way, the Chinese yuan is one of our currencies with a buy signal in our Global Currency Monitor.)

    Colorado EBT cards used for weed. Coloradans can now get marijuana with their EBT cards at weed shop ATM’s. The government is not only paying for people’s munchies, but now for their weed! One day, the government will be bankrupt enough and desperate enough that citizens’ benefits will dwindle and eventually stop. What will this look like? Rioting in the street. Americans may not care about government overspending and excess now, but when EBT cards suddenly don’t get replenished, the people will care very much. America will look completely different 10 years from now. Fast forward 10 years from now… you will likely see the yuan as a major player on the global scene, while the dollar plays a backseat role.

    The BRICS Bank. The BRICS nations (Brazil, Russia, India, China, and South Africa) say enough with the IMF and the western-controlled financial system. They want more monetary balance and a level global economic playing field. This is the same thing that happened in the early 20th century when America wanted to challenge the British pound as the global reserve currency. By 1945, America held 80% of the world’s gold and therefore overtook the pound as the global reserve currency after the Bretton Woods agreement was in place. But the excesses of the current-day Federal Reserve are wreaking havoc on the global economy and are causing other nations (i.e. the BRICS) to begin looking elsewhere for stability and monetary protection.

    End of QE3 in sight. Once the Federal Reserve ends its bond-buying program, who is going to line up at the doors to buy the U.S. government’s debt? Who is going to want to hold dollars? Well, the Federal Reserve hopes that national and global demand will be strong enough to lead the U.S. economy to higher growth. But here at FTMDaily, we don’t see that happening. All the growth that has occurred since 2009 is mainly due to the Federal Reserve policy of money-printing and low interest rates. But the demise of the dollar does not happen overnight… major global currencies have never crashed overnight. These things happen slowly and gradually, and if you believe the hype about the dollar collapsing on a certain day, then this belief will wreak havoc on your financial plan (i.e. putting all your money into one or two things).

    Saudis to Open Stock Market. Saudi Arabia is opening up its stock market to investors. This stock market is huge: a market cap of $531 billion, the largest of emerging markets outside of China. I’m very bullish on the Middle East, and so I will begin sharing some of my investing ideas with you on upcoming podcasts.

    France, Russia Update. France is bowing to U.S. pressure to cancel its war sale to Russia. French President François Hollande on Monday said the decision on whether to deliver a second Mistral warship to Russia will “depend on Moscow’s attitude” over the Ukraine crisis amid mounting U.S. and European opposition to the deal.

    Upcoming Podcast. Don’t miss our upcoming podcast this week, covering the 5 corporations that control the media in the United States. This is an eye-opening topic that will get you second-guessing everything you hear in the mainstream press.

    Plus, Jerry provides his daily commentary on the stock market, gold, and silver. All this and more is right here on Follow the Money Daily!

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