Dr. Steve Sjuggerud IMF October 2015Any thoughts on Dr. Steve Sjuggerud recent alarm about the IMF adding a new reserve currency in October of this year? Pushing non us dollar based investments with 1000 percent plus gains.
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Do you know what this new Reserve Currency is. I say it’s the Chinese Yuan or Renminbi.
It’s the IMF’s Special Drawing Rights (SDRs)…
see
http://pro.moneymappress.com/MMRBSSH39PPM2/MMMRQC04/?a=10&o=75960&s=82739&u=1184228&l=325814&r=MC&g=0&h=true
Its the Chinese Yuan and this will be announced officially at the next IMF Board meeting and here’s the FACTUAL INFORMATION to validate my statement. Oh, by the way, China for some unique strange reason just revealed their untapped Gold Reserves their mining in their own country, which will sustain the Asset-Backed Chinese Yuan value even more as the new world reserve currency above the US Dollar.
China discovers undersea gold reserves estimated at $16.4bn
Link:https://www.rt.com/business/321669-china-gold-seabed-discovery/
IMF’s Lagarde supports proposal to include yuan in SDR
Link: http://www.cnbc.com/2015/11/13/imfs-lagarde-supports-proposal-to-include-yuan-in-currency-basket.html
Statement by Ms. Christine Lagarde on IMF Review of SDR Basket of Currencies – http://www.imf.org/external/np/sec/pr/2015/pr15513.htm
Link: https://orders.cloudsna.com/chain?cid=MKT035907&eid=MKT076392&plcid=&snaid=&step=start&hpmv=2&affId=&s1=##AST09988
Of course it’s the Chinese Yuan. What else could it be.
We all know about the RENMINBI which they use the word YUAN AS THE SHORT SLANG OR THE CURRENCY BUT STEVE has other investments which is what my interest is I already own some physical YUAN but I am sure he has some other investments that might be worth finding out. There service is a step above a lot of others like Gumshoe they don’t put people down . I am sure Travis would ay Stansberry is a valuable service but maybe expensive but they deliver. I am sure Steve has more than just buy the JUAN! HE EVEN SAYS WHEN HE TEASES THIS IMF THAT THERE ARE A FEW WAYS TO PLAY IT. ANY THOUGHTS BESIDES THE JUAN, I WAS THINKING MAYBE SOME ETF’S!
Besides watching http://pro.moneymappress.com/MMRBSSH39PPM2/MMMRQC04/?a=10&o=75960&s=82739&u=1184228&l=325814&r=MC&g=0&h=true
Recommend that you look at a few tickers: VXUP, GTU, PHYS, SGDM, and CEF
And, if a cataclysmic event were to affect the dollar or US markets, these might be worth checking out: TVIX, DPK, VXX, FAZ, SKF, ERY, TZA, EDZ, UUP, DRV, BIS
Many of these tickers can be back-checked to 2008 in http://www.google.com/finance.
James Rickards has written extensively on this in his relatively fresh books “The Death of Money” and “The Big Drop”. TO get a feel for this subject matter, see http://pro.moneymappress.com/MMRBSSH39PPM2/MMMRQC04/?a=10&o=75960&s=82739&u=1184228&l=325814&r=MC&g=0&h=true
There is a great risk in some of these. For example, the TVIX has dropped below $1, and anything from a reverse split to a shut down of the security could put investors at risk. Just look at GASX, which stopped trading in September of 2014. One doesn’t lose everything, but could be in a blood bath if expecting to sit and wait until the cows come back to the barn.
Yes, he’s favoring the Yaun but also these two investments, not sure what they are?
…And when the yuan receives its reserve currency status as I expect it to, investors and money will flood into China.
The good news is, I’ve found two super low risk investments that allow you take advantage of the opportunity brewing right now.
These investments trade right here in the United States. They are cheap and easy to buy and sell.
I believe that these two investments are probably the only places you can find truly safe triple digit gains in China.
One takes advantage of a new investing rule I bet most people haven’t heard of. Essentially, it allows Americans to own “A-class” shares of stock typically reserved for Chinese locals. These are the types of shares that I believe could earn 50%, 100% even 150% very quickly. I think this is one of the very best ways to play the trend… Because the idea of “A-shares” is gaining momentum, I don’t think you’re going to get in this cheap for much longer. And like I said, you can make this investment right here in America, with your ordinary broker.
The second opportunity plugs you into some of the biggest and safest Chinese companies on the market. For example, one of them is a mobile – phone provider with over 800 million subscribers. That’s more than twice the number of people living in America! And history has shown us that when this investment goes up, it goes WAY up. During China’s 2005 bull market, for example, it gained over 300%! If more and more companies begin using the Yuan by the end of the year, these are the Chinese companies you’ll hear about all over the news.
I am a big fan of Sjuggerud. I subscribe and have taken his advice on BIB, ASHR, DEM, PKW , RXL and FXI. Take a look at BIB. That’s the one I’ve held the longest. ASHR has been a rocket ship and so has RXL. ASHR and FXI are his recommends for buying into the Chinese stock market. FXI is his latest because it has lagged ASHR even though they contain some of the same companies.
He is a contrarian but has been right for several years. He recommended buying real estate when it was low and did it with his own money in Florida. He recommended Blackstock at the bottom of the cycle and is still holding. Unfortunately I didn’t act on that recommend.
The newsletter is cheap at $99 and his advice has been well thought out and generally correct. I originally bought BIB in the $60’s, it split 2for1 and is going to split 2for1 again soon from it’s current $174 price.
you forgot to mention the stock names, I think that some of us could be interested so please write em, regards.
The two Johnny Boy mentioned the hints for are pretty clearly ASHR and FXI, the funds that give exposure to the A-Share market (domestically traded Chinese stocks, ASHR) and the Chinese large caps that trade in Hong Kong (China large cap index, FXI).
That’s correct, I confirm.
The new reserve currency isn’t the yuan, it’s the IMF’s Special Drawing Rights (SDR’s). SDR’s are backed by a “market basket” of currencies, and the IMF will decide whether to add the yuan to this market basket. This would be a huge gain for the Chinese, both financially and politically. Various experts predict that in the next financial crisis, the SDR will take over from the dollar as the leading international reserve currency.
That does seem to be the goal, more integration of China into the global currency regime. I suspect it will all move much, much more slowly than the fearmongers about the “death of the dollar” are predicting, the Yuan is expected to become what they call “fully convertible” this year, which is a good first step, and many of the gold bugs predict that if China updates their gold holdings sometime this year that will strengthen the Yuan as well. It’s worth considering that flip side, too: Chinese people with substantial sums of money have been trying, with some desperation, to skirt capital controls and get their money out of the country for a very long time — indeed, sometimes it seems like US investors are desperately trying to invest in Chinese growth just as wealthy Chinese are trying to get more of their wealth out from under the Chinese government’s purview. There’s potential for big ebbs and flows if China’s currency really opens up, and a big loss of control over their own economy, and I think the Chinese and the rest of the world financial leaders will be cautious and slow-moving whenever possible. China works on 50-year plans, not on 1-year plans.
Doesn’t mean the Yuan won’t pop a bit or that Chinese stocks can’t continue to surge as the financial barriers between Hong Kong and Mainland China slowly get taken down, just that I don’t think we’re going to wake up one day in October and find the dollar 20% lower and the Yuan 20% higher. This stuff usually moves slowly. There’s an interesting article on China’s capital controls and these changes here if you’re curious (it’s from last Fall, but still relevant I think): http://www.moneyandbanking.com/commentary/2014/8/28/chinas-capital-controls-and-the-exchange-rate-regime
Greetings all:
Old doc Sjuggerud is referring to a proxy stock investment called KCNY. I know because ( gasp) I’m a subscriber to this particular Stansberry newsletter. Mr. Sjuggerud feels that you should sell half your stake once you have a 100% gain and then hang on to the rest for the potential additional gains. I’d provide more detail on this thoughts but I’m writing this from work and well, I should be doing what I’m paid for. Regards all. I may weigh-in with more info on this security at another time.
That’s effectively a Chinese money market fund, so it does give Yuan exposure and a slightly higher yield than US money market funds at the moment (before fees, at least, haven’t checked to see what the fees are). No real exposure to Chinese stocks, it’s just commercial paper. The ETF is quite new, they describe themselves pretty well on their website here: http://kraneshares.com/an-introduction-to-the-kraneshares-e-fund-china-commercial-paper-etf-nysekcny/#
KCNY has been slowly trending up over the last few weeks. It holds short-term commercial paper so its price does not fluctuate that much from day to day. Compare the volatility with that of DSUM which holds Dim Sum bonds and yields about the same as KCNY. Given the lower volatility, would prefer to hold KCNY.
Concur. See http://pro.moneymappress.com/MMRBSSH39PPM2/MMMRQC04/?a=10&o=75960&s=82739&u=1184228&l=325814&r=MC&g=0&h=true
FINALLY someone has gotten it right – it is SDRs … even Christine Lagarde, head of the IMF has admitted that it will happen, in her words “the only question is when.” The consensus seems to be later this year and it will eventually lead to the demise of the dollar as the world’s reserve currency with devastating effect here (but it will take over a decade for it to fully happen, not immediately as Stansbury and friends assume),
This issue, US dollar losing it’s sovereign currency status, is very well covered by James Rickards in his two latest books, “The Death of Money” and “The Big Drop” which describe how and why such an event could occur… and how one should respond to it. TO get a feel for the material, I recommend that you watch http://pro.moneymappress.com/MMRBSSH39PPM2/MMMRQC04/?a=10&o=75960&s=82739&u=1184228&l=325814&r=MC&g=0&h=true
It has also been widely predicted by several pundits for at least five years running now (most vociferously with Porter Stansberry’s “End of America” pitch), and similar “doom for the dollar” predictions have been popular off and on for 20 years — that doesn’t mean they’re all wrong about the direction of things, but it’s important to be mindful of the gradual nature and political unpredictability of fluctuations in world currencies. Sure, it’s likely that there will be a rise of other currencies to challenge the dollar eventually, and you can see footprints in the sand that indicate maybe that’s where we’re headed now… but it’s also worth thinking about opportunity cost and diversification, and about the fact that no newsletter gets a lot of new subscribers (or TV pundit gets asked back on the air) if they say “Look out, the world economy is going to become less US-centric over the next 20 years!”
If you had bet against the dollar and taken your money out of US stocks and put it all in “hard assets” in 2010 and 2011, you’d be in terrible shape now compared to the boring old 60/40 stocks/bonds portfolio.
Travis…True enough, and you could say the same for 2012, 2013, and 2014 as well.
And some hard assets have done just fine, in particular real estate. Fortunately my losses in hard asset stocks have been more than offset by real property…which has the drawback of being less liquid and dependent on those darn Feds to keep interest low.
I believe in the bad trends of US dollar and I find Rickard’s macro picture pretty convincing. But the timing is unpredictable, and the exact way things will play out is also uncertain…especially since we don’t know if inflation or deflation will occur first, which require opposite instruments to prepare.
The most recent SS recommendation that I know about is for KCNY, which is short-term bonds in the China market. He had previously recommended another fund that had longer-term bonds, but I forget what it was. He thinks KCNY is safer, but that the other one has greater upside potential — also greater volatility.
Longer-term Bond Funds’ ticker was CBON (as opposed to the shorter term Bond Fund KCNY). Since January of this year, S. Sjuggerud in his “True Wealth” newsletter has thoroughly discussed which investments to consider as the IMF also considers adding China to the Reserve Currency ‘stew-pot’.
The thesis from the good Dr. is the following; the Yuan is not yet an official reserve currency in the IMF basket (USD, EUR, YEN, GBP, CHF, and some others). In June the basket will be reviewed. Given the fact that China is the second economy in the world, it should be admitted as an official reserve currency in the basket. At what level, nobody knows. But this admission implies a rebalancing and a subsequent rise in the Yuan.
I have just taken 2/3 of my money out of US stocks because of the convincing argument from the ” death of the dollar” brigade.
Just yesterday I signed up for Jim Rickards Currency Wars Alert in the hope of making some easy money-wrong again!
I see that the Currency Wars Alert’s strike rate for success to be about 1/3 so far this year. Maybe I could succeed if I bet against “the Alert’s” predictions.
Also…it may not be a bad idea to do absolutely nothing with the cash until the situation clarifies itself…wish I had more of the damned stuff right now…
But if your money is still in U.S. dollars you might still be at risk. A way to diversity could be to purchase an ETF that rises when the market falls, such as QID, DXD, SDS, SZk, etc.
Years ago, my DDH was wondering about the doom-and-gloom newsletters he was reading, “What if they are wrong?” He decided they were and decided not to move out of his entirely US and Intl stock portfolio. He bought a few US Treasuries just to be on the safe side. We’re doing pretty well.
As for Travis excellent observation that “…it seems like US investors are desperately trying to invest in Chinese growth just as wealthy Chinese are trying to get more of their wealth out …” I say,
The grass is always greener…
A couple of decades ago I was at a West Coast Libertarian meeting where all were bemoaning the parlous state of taxes and the local economy. Some US folks expressed the expectation of improvement in their lot by moving to Canada, but were shouted down by the Canadians who claimed theirs was the WORST!
What would you do if you were deciding Chinese state and fiscal policy, and you had a few trillion dollars of US money on your hands, and you were faced with US fiscal policy ?
I know what I would do, and the Chinese are doing it. They are buying hard assets. They are buying resources on the cheap. They are locking up long-term supplies of raw materials and agricultural products. They are buying real estate. They are buying gold, and encouraging their citizens to do the same. They are developing non-US dollar methods of transacting business with all their trading partners. They are encouraging moderate amounts of domestic consumption, so they are not so dependent on us anymore to ship their containerloads of Dollar General, Best Buy, and Home Depot contents.
If the Chinese want to buy it, I want to be a seller. If the want Chinese sell it, I don’t want to own it.
There is a very high probability that ALL of the above is hype. The value of the Special Drawing Right is calculated by the IMF through a weighted index of major currencies. Adding the yuan to the index would be mainly an accounting measure, bestowing some prestige to China and its currency, but little in the way of changing real economic activity. There should be no significant affect on the dollar, at least among those people who understand how the SDR and the IMF’s internal accounting system works. SDRs do not exist outside of the Fund’s computers. They are used to supplement member countries’ reserves, to ease the anti-growth measures need to adjust to balance of payments crises.
The Chinese economy is overdue for a correction. It is nonsensical to think that they have devised the formula for unstoppable economic growth, especially without a market system to at least partially correct the dictates of government authorities. This is exactly what happened to Japan. And yes, I know that the free market system did not prevent our economic meltdown seven years ago.
To paraphrase Mr. T., I pity the fools who jump into Chinese assets based on the twisted, overblown rhetoric of Dr. Steve S.
I read that the US has told the IMF it will veto the inclusion of China, and also read some comment regarding this. Can’t verify, but expect this may be the case.
While faith in the Fed, markets, has been the wiser choice thus far, Steve S. has navigated these times with great acumen.
Sure, it might continue for years, but already requires extraordinary management to keep it going. Stay nimble and wary.
What bothers me also is this link, which discusses how Nick Leeson brought down the Barings Bank 20 years ago. This line has a bearing on Sjuggerud’s column. Read the link: http://www.bloombergview.com/articles/2015-05-13/man-who-brought-down-barings-warns-on-china
One major consideration is not so much what currency or metal takes the place of the U.S. dollar, but just the fact that the U.S. petrodollar is no longer used to purchase oil. Since President Nixon encouraged OPEC to use our dollar as the exchange currency for purchasing oil, all countries had to own dollars or bonds. Once some other medium of exchange is used, those countries no longer need to hold our bonds. The supply-demand curve will take effect when countries holding billions of dollars of U.S. Treasury Bonds or Notes start dumping them on the market.
The benefits that accrue to the US through the status of the dollar as the world reserve currency are incalculable but huge! Any dilution of that status reduces the world demand for dollars and US debt and reduces the ability of the US to print essentially unlimited quantities of new fiat dollars. The inclusion of the yuan in the SDR basket is a chip in the dollar’s armor as was the recent Russo/ Chinese gas deal and a multitude of smaller non-dollar transactions. Our government’s arrogant use of “sanctions” to enforce US law on non-US banks by denying them access to dollars is hugely damaging as it brings the dollars reliability and availability into question. Mr. Deist is correct. Sooner or later the cumulative effect will be to force the dollar into a market derived value. We will not enjoy that!
Thank you all for helping us exposed into the financial investment world for those who are new into this circle.
Dr. Sjuggerud suggested that IMF would add Chinese currency to the world reserve currency basket. His buy recommendations: CBON, Chinese bond fund, KCNY: Chinese commercial paper, renminbi thru EverBank, stocks: ASHR, FXI, CHL. Let face it: even our best friend UK is trading with China using each other’s currency bypassing U.S.D. IMF has to recognize the reality. I hope I’ll not become a lot poorer due to this action.
According, to Precheter (EWI),Dent, Weiss & the economist from Yale?? We’re headed for deflation, or we are already in it 1929: “it came on slowly people didn’t realize what had occurred until after it was almost over’. There is no inflation with 0& percent IR. Went long the $ last year it’s in long term bull market now (with corrections, like now). Yuan & Renminbi, simply not enough to settle trillions in internationall settlements daily. $ will go from trash (alread has) toking ‘buddy can you spare a dime?’ Just get ready to get out of it after the USG takes action and try’s to hypero-inflate it’s way out (about 3 years from now). Good Luck, tough times for investors who are projecting recent past into future.
Sorry for typo’s. Pls. ‘bear’ with me. But, idea gets through.
Since Sjuggerud recommended FXI, ASHR, and TAO in the latter half of 2014 they are up 23%, 92%, and 17% respectively. I’d say his China strategy is doing pretty well.
A replacement for the U.S. Dollar as the dominant reserve currency is years away. Reserve currencies today are not only the Dollar but also to a limited extent, the Chinese Yuan, the Japanese Yen, the Euro, and even the Pound.
When the Dollar is replaced it will be by the IMF’s SDR which is a basket of currencies and even includes some gold. That will be a shift upward as the IMF is the last straw. Then when that fails, who knows?
It is possible that the U.S. Dollar will retain its reserve status for many decades as volume matters as well as the history of the U.S. never declaring old dollars worthless as most other countries have done. The dollar may be worth less, but unlike many other currencies, it has never been zero.
So, its mid July and I have just heard this news from Stansbury research’s newsletter. In the last few months we now know that China and India are buying and hoarding gold and that we owe them Trillions of dollars in debt, as well as, the NY stock exchange denying a merger with the Shanghi market. Then out just last week, all in one day mind you, the NY stock market, American airlines, United Airlines and the Wall Street journal all crashed their computer systems at the same time! Next we learn in the MSM that China insulted our capability because of this. No one knows who hacked in to all those systems, however my point is that we do need to pay close attention to what is actually happening in the world at all times and connect the dots, and not just what the market is doing alone. All this information helps us predict what may or may not happen when China gets their foot in the IMF. What most do Not know is that the value of the Chinese Yuang is artificially kept at a lower rate than what it is actually worth, which has enabled the Chinese to get to the point of being able to qualify for inclusion in the IMF by exporting so much. If they do get the currency admitted and I believe they will. Will they bump their currency value to what it actually is worth? If so, that would increase the value of their money, yes, however it would also loose them a big share in the exporting trade, because it would be too costly to deal with them and have product made there. Already India and Vietnam are pulling much of their business away from the textile market because their prices are not the lowest any longer. Using Stansbury and others to help make predictions on the market and keeping your wealth is great if you can look at it with a full view as to everything that is happening and then make your own informed decisions.