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I don’t think so, for example if you use dollars to buy Apple stock you are very much still long dollars because a big part of Apple’s valuation is their enormo
by ak_111 3y ago
I don’t think so, for example if you use dollars to buy Apple stock you are very much still long dollars because a big part of Apple’s valuation is their enormous dollar reserve including t-bills. If instead you used it to buy say Chinese real estate you could say you diversified away from dollar.
- yawboakye 3y agois there any data that shows the movement of the new monetary value? my guess is that, for any economy, significantly cutting down the role of the dollars requires cutting down participation in parts of the US economy that are proxies for the dollar. so, for example, china could decide to acquire lands or farms in the US. that's not necessarily long dollar. they could be buying resources in different parts of the world as well.
- ethbr0 3y agoLand or farms in the US are extremely likely to transact their value or production in dollars, so you'd still be exposed. Believe parent's comment was that you would want something where no/minimal part of its 'value ecosystem' touches dollars. E.g. Chinese real estate, with rent paid in yuan and sales transactions happening in yuan
- than3 3y agoAnything which collateralizes in the currency would be exposed. Additionally, you may want to re-watch the China Hustle. They have no laws protecting foreigners from theft/fraud. Its encouraged. The yuan also has its own issues.
- ethbr0 3y agoI'm in no way suggesting one invest in Chinese real estate. Governments with xenophobic and nationalizing tendencies tend to be poor bets for private investment. Picking up pennies in front of a steamroller, etc.