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The Chinese currency used to be and might still be pegged to the US dollar so why shouldnt I invest in the Chinese govt debt instead? I do know some parts of t
by Terry_Roll 5y ago
The Chinese currency used to be and might still be pegged to the US dollar so why shouldnt I invest in the Chinese govt debt instead?
I do know some parts of the US govt has complained about the pegging because it made US workers more expensive than Chinese workers.
And the I remember the £ in the 90's crashing out of the Exchange Rate Mechanism when it was pegged to the German DM as Germany had(still has) a strong economy which sent interest rates soaring to something like 12 or 15%!!!
So pegging currency to others must be more nuanced than that it seems.
- seanmcdirmid 5y agoI don’t think you can invest in Chinese government debt as a foreigner, but there are some real estate bonds you can buy…just not very safe.
- unmole 5y ago> I don’t think you can invest in Chinese government debt as a foreigner You most certainly can. Hell, there are ETFs that allow you to do that.
- vkou 5y ago> The Chinese currency used to be and might still be pegged to the US dollar so why shouldnt I invest in the Chinese govt debt instead? Because the US makes it easy for you to trade dollars around. The dollar's dominance will collapse the moment that significant restrictions are introduced around who can hold it, how they can hold it, and what they can trade it for. China doesn't care one whit about making it easy for a foreigner (or a local) to trade its money (or derivatives) around. China cares about stabilizing its economy. If the CPC decides tomorrow that currency controls are necessary to stabilize their economy, you're going to be SOL. If the CPC decides tomorrow that USD, or BTC, or RMB can't flow out of China, you're SOL. And so on, and so on. I wouldn't recommend making investments when you don't understand the risks.