WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
The Bank of China is now allowing Americans to open yuan denominated accounts out of its New York and Los Angeles branches. Over email, several people have asked me what I think about this.
I think that keeping some portion of one’s savings in yuan makes A LOT of financial sense. The yuan is not likely to decrease significantly against the dollar. Rather, the concern among the Chinese is that, if it was allowed to fluctuate on a free-market basis, it would increase sharply in value against a number of currencies, but especially the dollar. They are keeping a lid on it, for now.
My mantra has always been diversification, diversification, diversification, so, yes, it would probably make good financial sense to park some money there.
Personally, though, I can’t bring myself to do it.
I don’t want to spend a lot of time going through all of the reasons why not. The Chinese regime represents naked, extreme, maniac fascism of the highest order and the largest scale. Let it suffice to say that voluntarily handing over money for deposit with that regime is over the line for me. As it is, no matter how hard my wife and I try, it’s damn near impossible to avoid buying Chinese goods. The other options are to go without the things, which we do, or go with an inferior product that costs more, but that’s not made in China.
Welcome to fiat currency Hell. This is a place where, in an attempt to hold on to more of their hard earned money, well meaning, moral people are calmly considering going to the Bank of China with their savings!
Anyway, yes, it probably makes financial sense. No, I’m not doing it.
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