Friday, August 21, 2009

Insiders Rushing Into Yuan

It's the usual suspects, Carlyle Group, Blackstone and KKR. They are launching Chinese funds based in the local currency, the yuan. Do they suspect a dollar collapse?

Writes WSJ:
The flurry of announcements reflects a sense of urgency among the foreign firms.
The PEU Report asks:
What does [Carlyle's] David Rubenstein know? Will China soon float the yuan? Is the dollar headed for an implosion? Will a new Fed chair impact the dollar's value? Are rich Chinese investors hesitant to invest in dollar denominations? Only, the prescient Mr. Rubenstein can answer. Did it come from a private session with Tim Geithner or Larry Summers, maybe a dinner with Rahm Emanuel?
If the dollar collapses, it won't collapse just against the yuan. Thus this chart continues to look very interesting.

If money supply (M2 nsa) isn't growing, then who is buying the euro? Put another way, who is liquidating dollars? Does Rubenstein know the answer?

Under these conditions, IF Bernanke starts printing money again, I would be very comfortable forecasting an imminent dollar collapse. The way it looks now, it may not even take a Bernanke push.

1 comment:

  1. I won't be surprised if it happens . . . China and Russia have been leading the charge in replacing the dollar for international trade . . . Also, its no surprise that the two countries have been major gold buyers this year