[vK_man]

Chinese lunchtime television on Friday gave ordinary people a basic tip on how to play the currency markets: sell the dollar!



A state news program, quoting unnamed "wealth management experts," told residents with dollar accounts on the mainland to convert their holdings into yuan or a range of other foreign currencies, including the pound and the euro.

The prospect of ordinary Chinese ditching the dollar should be less alarming than reports that have roiled global markets of Beijing diversifying its official foreign exchange reserves.

http://www.cnbc.com/id/21829883

Three Solutions to Dollar Weakness

The state news program, which did not quote any government official, said people were getting squeezed because the pace of yuan appreciation against the dollar was greater than the interest rate earned domestically on dollar accounts.

Analysts expect the yuan to rise anywhere from 5 to 7 percent annually against the dollar, while domestic dollar accounts earn depositors just 3 percent a year.

The program proposed three solutions.



"Selling dollar for yuan as soon as possible may be a safe approach," the news program said, adding the yuan could then be used to invest in domestic mutual funds.


"Secondly, you can change the dollar into strengthening currencies," it continued. "Currently, the U.S. dollar is falling against the euro

[HoniSoit]

The prospect of ordinary Chinese ditching the dollar should be less alarming than reports that have roiled global markets of Beijing diversifying its official foreign exchange reserves.

Beijing in fact has already been attempting to diversify its foreign reserves away from U.S dollars and U.S treasury bonds since early last year. But so far Beijing hasn't indicated it will dump U.S dollars but instead is trying to invest the dollars by forming state-controlled investment firms to invest abroad. Given that Beijing has to consider the economic and political implications of dumping dollars, I don't see it is going to do it any time soon. But it could nevertheless be used as leverage, for examples, in trade talks with the U.S concerning U.S trade deficit/appreciation of Chinese Yuan.

[dip]

Agrees with the above friend's viewpoint.
US dollar depreciation, everybody suffers a loss.
But the American economy is radically extremely healthy.
The various countries' investment organization must buy US dollar property.

Moreover,Our Chinese thinks:
Although US dollar depreciation helped US to reduce the national debt.
But reduced US to the Chinese product purchasing power.
Let the Chinese export industry come under the serious attack.
This regarding Chinese economy very not good.