Can anyone help me with investing in foreign currency?

[jokerman93]

My girlfriend is interested in buying Chinese Yuan. I'm new to all this. Wondering if anyone can point me in a direction so I can learn hoe these currency markets work.

Many thanks in advance.

:hi:

[Sir_Shrek]

1. Go to the currency exchange...

...exchange your dollars for Yuan. Let them appreciate. Change them back.

[Frodo]

2. The only way I can help you is to say "Don't do it".

IF your decision is based on the weakness of the US dollar and your thought that it will get weaker pick a different currency.

First, it's hard to get a good exchange rate on a currency that is so rarely traded.

Second, China goes out of it's way to peg the Yuan to the Dollar and this desire will only get stronger as the dollar weakens since it aids their exports (the lifeblood of their economy) and they need to find jobs for tens of millions of their citizens.

Take a look at the chart on the Dollar/Yuan over the last few months.

http://finance.yahoo.com/m5?a=1&s=USD&t=CNY

Even while the dollar has gyrated wildly, the exchange between Dollar and Yuan has been essentially flat. Yes, I know the chart looks bumpy, but look at the scale - it has fluctuated between a low of 8.2766 and a high of 8.2772. A variation of around seven HUNDREDTHS of a percent. While the dollar has gone hundreds of times as far in single days.

You're going to pay an exchange fee of AT LEAST 5% (both ways) to buy and sell the currency unless we are talking about significant dollar amounts.

There is just no way to make money here unless you believe China is about to make some drastic move. And if you really were in a position to make that assumption? You would already know how to invest in the Yuan.

[Petrodollar Warfare]

3. RMB Revaluation - Goldman Sachs

Just an fyi/email I got last week....

**********

Jan 13, 2004
Subject: RMB Revaluation - Goldman Sachs


> BEIJING, Jan. 13, (Xinhuanet) -- China will make a one-off revaluationof the yuan within the first quarter of the year and move to a trade-weighted basket of currencies to set its exchange rate by the second half, investment house Goldman Sachs said.

> The measures will lead to a five percent cumulative appreciation over the next 12 months, it said.

> With low interest rate expectations and yawning current account and budget deficits, the US dollar has been hitting fresh lows against the euro and other major currencies on an almost daily basis.

> This is pressuring China to address its exchange rate policy, the investment bank said in a client note.

> Although a 10 percent revaluation would be needed to bring the currency to fair value, it expects China to revalue the yuan by 2.5 percent against the US dollar in a "prudent first move" towards a more flexible exchange rate regime.

> Goldman Sachs said that China is then likely to move from a direct US dollar peg to a crawling basket of trade-weighted currencies.

> It cited a recent mainland media report which said that the government was considering linking the yuan to a basket of 11 trade- weighted currencies.

> It noted, however, that because many of these were either managed against or pegged to the dollar, its composition would be 63 percent in dollars and the remainder split between the euro and yen.

> Goldman Sachs said that the move to a managed basket of currencies would lead to a one percent appreciation against the basket in six months and 1.5 percent in 12 months, totaling a five percent rise in value overall.

> It said that this implies an exchange rate of 8.07, 7.68 and 7.54 yuan to the dollar in three, six and 12 months respectively. The yuan will be valued at 13.00, 12.38 and 12.60 yen over these periods, it said. Enditem

>

> (China Daily/Agencies)


*****comments from London****

Even if this is only informed speculation, and I note that Henry has seen fit to forward it, it is potentially enormously important. Obviously very many wonder how far the global balance of payments disparities can go, but this possible/probable answer is very informative.

It marks a relative demotion of the dollar as world money, not just in quantitative terms but in qualitative terms.

The procedures prior to the advent of the euro shows that humankind has the computerised technology smoothly to manage a basket of currencies.

If China switches from a dollar peg to a basket of currencies implicitly it is saying that this is its standard for world money.

It is a flexible standard that can manage subsequent adjustments in the relative strength of different economies, including a long term relative decline of the US economy despite the present attempts to heat it up. It can adjust to the global effects of massive Keynesian policies like the current flood of dollars throughout the world.

It sets a standard for other countries to switch to as a bench mark ofworld money, in particular the increasing number of countries for whom trade with China is most important.

All without an overt fight about whether the dollar is replaced by the renminbi.

It is not socialism, but it is about a somewhat more socially rational,sensible management of world money.

And the computerised basket of currencies will reflect the relative strength of different economies in the world in a less mystical way than gold or silver represented world money.

Clever Chinese.

Chris
London

[Art_from_Ark]

4. Those exchange fees can really eat you up

especially if you want cash of a country that doesn't have a popular currency.

[junker]

5. Look you, just buy gold or silver and shaft a few repubs while protecting

your assets. Also, gold and silver are currency. Also the Yuan is a really stupid idea for at least a year due to the pegging and their abysmal situation vis-a-vis energy/banking failure.


So buy gold and silver. Go to GATA.ORG or lemetropolecafe.com and learn how each and every ounce of gold or silver purchased in bullion/coin form shafts the cabal which is repub based and is propping up Bushie through money made in the scam.

Eh? Social investing at its very core.

THen to get serious about it, go read about honest money and your constitution and the 1913 coup against the USofA on Dec 31 by congress who then blackmailed Wilson into signing over your future and your kids future to the Federal Reserve Bank, a private institution owned by foreigners TO WHICH THE NATIONAL DEBT IS OWED....

[ChemEng]

6. Buy a foreign bond instead....

They are denominated in the local currency, and pay interest as well. If the currency appreciates against the dollar, you will realize the gain in the bond price.

[uncertainty]

7. Everbank.com

Check out everbank.com - they offer an extensive array of foreign currency services (and they're based out of St. Louis). They offer foreign exchange savings accounts and CDs (though the CD min is $10K and for their multicurrency CDs it's higher - I don't recall the min for savings accounts). You can sign up for their daily e-letter (the daily pfennig) which I think is quite informative about long and short term trends. I'd suggest holding for the long or medium term in foreign exchange investing because of the conversion fees.