After a few days rest from my vacation, I started reading up on the news again and my eyes immediately went to these articles:
China faces new pressure to let currency rise
Why China should let the yuan rise
At 5% appreciation, the RMB:USD rate would drop to 6:5:1. At 15%, it would drop to 5.95:1. While it wouldn't change my finances to any big degree, needing to spend another 5%-15% is still a bit painful. So to hedge against this eventual outcome (China's currency has no place to go but up), I will need to accelerate a few plans:
1) Repay loans to my father-in-law. When we came over to China, we brought some money over (10K USD undeclared per person through customs) but obviously not enough to buy both a home and an office. As we didn't know all the money transfer options yet, we ended up borrowing money from my mom (transfered via Western Union), wife's ex-business partner (Western Union also) and father-in-law. Since then, we've been repaying every month -- my mom and wife's ex-partner have both been fully repaid. Remaining is about 120K RMB to my father-in-law or about $17.6K at today's exchange rate. Since I'd much rather pay $17.6.K now versus say $18.5K later this year, I am consolidating a few Vanguard money market funds to write a big check to him asap.
2) Start moving money into CYB (WisdomTree China Yuan ETF). I've budgetted about $2000 USD per month for expenses so I will need to hold $48K in CYB per year I plan to stay during the near term.
3) Re-double efforts to start businesses to earn rmb to be spent here. After being in China for more than a year, I have a few ideas now so it's a matter of fully fleshing out the details and getting the funding together. (More on this in a future topic.)
(Filed in china)
After reading about possible appreciation later this year for China's currency against the U.S. Dollar, my first thought was to pay back my father-in-law immediately and my wife agreed with me. But if you read that phrase carefully, that implies... Read More
Yuan to appreciate?
Posted by Mossy
March 7, 2010 5:30 PM
China faces new pressure to let currency rise
Why China should let the yuan rise
At 5% appreciation, the RMB:USD rate would drop to 6:5:1. At 15%, it would drop to 5.95:1. While it wouldn't change my finances to any big degree, needing to spend another 5%-15% is still a bit painful. So to hedge against this eventual outcome (China's currency has no place to go but up), I will need to accelerate a few plans:
1) Repay loans to my father-in-law. When we came over to China, we brought some money over (10K USD undeclared per person through customs) but obviously not enough to buy both a home and an office. As we didn't know all the money transfer options yet, we ended up borrowing money from my mom (transfered via Western Union), wife's ex-business partner (Western Union also) and father-in-law. Since then, we've been repaying every month -- my mom and wife's ex-partner have both been fully repaid. Remaining is about 120K RMB to my father-in-law or about $17.6K at today's exchange rate. Since I'd much rather pay $17.6.K now versus say $18.5K later this year, I am consolidating a few Vanguard money market funds to write a big check to him asap.
2) Start moving money into CYB (WisdomTree China Yuan ETF). I've budgetted about $2000 USD per month for expenses so I will need to hold $48K in CYB per year I plan to stay during the near term.
3) Re-double efforts to start businesses to earn rmb to be spent here. After being in China for more than a year, I have a few ideas now so it's a matter of fully fleshing out the details and getting the funding together. (More on this in a future topic.)
(Filed in china)
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After reading about possible appreciation later this year for China's currency against the U.S. Dollar, my first thought was to pay back my father-in-law immediately and my wife agreed with me. But if you read that phrase carefully, that implies... Read More
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