Perhaps you've heard claims that the value of China's currency, also known as the Yuan or the Renminbi or RMB, is destroying the US economy by keeping the price of Chinese goods so cheap that there's no point in making anything in the US anymore. Up until recently this "problem" has been like the weather...everyone complains about it but no one does anything about it. However, all that changed in the last week or so with the passage of the U.S. Currency Exchange Rate Oversight Reform Act in the senate, which attempts to impose tariffs on Chinese goods if the Chinese continue to keep the value of their currency down. I'm not 100% clear but I think it only needs to be signed by the president now.
As you might imagine, this legislation has set off charges of protectionism by the Chinese and I'm not so sure it should be well received by Americans either. After all, if the Yuan is really undervalued by 30% why wouldn't we want the Chinese government to subsidize 30% of our consumption? Seems like a pretty good deal to me and it can't last forever so let's party while we can. In addition, this is starting to look an awful lot like the beginning of the trade war that exacerbated the depression.
We could debate this issue ad nausea but the real issue is what are you and I going to do about it? More importantly, if you really believe the Yuan is undervalued how can you profit from that insight? As I've pointed out before, you can actually hold a Yuan denominated deposit account through an FDIC insured American bank - Everbank. By doing so you stand to realize 30% appreciation when the currency ultimately reaches it's "correct" value. However, by opening this account and causing someone to buy Yuan you are actually helping push up the value of the Yuan - or at least export more inflation to China.
And can you, can you imagine fifty people a day, I said fifty people a day walking in and opening a Yuan deposit account and walking out. And friends they may thinks it's a movement. And that's what it is , the Anti-Dollar, Pro-Yuan Movement, and all you got to do to join is open an account at Everbank.
My apologies to Arlo Guthrie.