http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-bubble-destroy-the-yuan/ Will a Burst Chinese Real Estate Bubble Destroy the Yuan? From news reports we see that the overheated Chinese real estate market continues to rise. This happens despite evidence of virtually empty malls, housing developments, and even newly built cities. In the eyes of many, far too much equity in China has been invested in real estate. The plain fact of the matter is that when the Chinese real estate bubble bursts it will take huge amounts of equity and credit with it. The question for Forex traders is this. Will a burst Chinese real estate bubble destroy the Yuan? The most profitable currency pair to trade is typically the one that is the most volatile. To the extent that one can trade the Yuan versus the USD or other majors, it may be time to short the Yuan or buy puts on the Yuan with US dollars in Forex options trading. Trading the Yuan against the USD From the viewpoint of North Americans and Europeans the Chinese government routinely engages in currency manipulation. They do this in order to keep the value of their currency low which in turn makes their exports more competitive. The virtually continual trade surplus that the country has had against most of the world has allowed them to plow profits back into buying US dollars as well as Euros. This drives the US dollar up and drives the Yuan down. China allows the Yuan to trade against the US dollar and other currencies. However, the People’s Bank of China sets the exchange rate daily and trading is only allowed in a 1% band above and below the set rate. It Is All about Interest Rates for the Time Being In an attempt to rein in excessive spending on real estate and get a handle on bad loans, the Chinese central bank has acted to drive up interest rates. Whether or not this will help avoid a real estate crash remains to be seen. However, in the short term it has served to drive the Yuan higher against the US dollar. There is a tendency for foreign currency rates to rise for the nation with higher interest rates. Right now the Yuan is an attractive investment vehicle as interest rates are up and the real estate boom continues. The Yuan currently trades at around 6.12 to one US dollar. The bottom line questions for Forex traders are if the real estate market will cool off and level off or if it will crash. If the latter happens will a burst Chinese real estate bubble destroy the Yuan?

1. Will a Burst Chinese Real
Estate Bubble Destroy the
Yuan?
By: www.ForexConspiracyReport.com

2. From news reports we see that the
overheated Chinese real estate
market continues to rise. This
happens despite evidence of
virtually empty malls, housing
developments, and even newly
built cities.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

3. In the eyes of many, far too much
equity in China has been invested
in real estate. The plain fact of the
matter is that when the Chinese
real estate bubble bursts it will
take huge amounts of equity and
credit with it.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

4. The question for Forex traders is
this. Will a burst Chinese real
estate bubble destroy the Yuan?
The most profitable currency pair
to trade is typically the one that is
the most volatile.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

5. To the extent that one can trade
the Yuan versus the USD or other
majors, it may be time to short the
Yuan or buy puts on the Yuan with
US dollars in Forex options
trading.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

6. Trading the Yuan against the
USD
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

7. From the viewpoint of North
Americans and Europeans the
Chinese government routinely
engages in currency manipulation.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

8. They do this in order to keep the
value of their currency low which
in turn makes their exports more
competitive.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

9. The virtually continual trade
surplus that the country has had
against most of the world has
allowed them to plow profits back
into buying US dollars as well as
Euros.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

10. This drives the US dollar up and
drives the Yuan down. China
allows the Yuan to trade against
the US dollar and other currencies.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

11. However, the People’s Bank of
China sets the exchange rate daily
and trading is only allowed in a 1%
band above and below the set rate.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

12. It Is All about Interest Rates for
the Time Being
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

13. In an attempt to rein in excessive
spending on real estate and get a
handle on bad loans, the Chinese
central bank has acted to drive up
interest rates. Whether or not this
will help avoid a real estate crash
remains to be seen.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

14. However, in the short term it has
served to drive the Yuan higher
against the US dollar. There is a
tendency for foreign currency rates
to rise for the nation with higher
interest rates.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

15. Right now the Yuan is an attractive
investment vehicle as interest rates
are up and the real estate boom
continues. The Yuan currently
trades at around 6.12 to one US
dollar.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

16. The bottom line questions for
Forex traders are if the real estate
market will cool off and level off or
if it will crash. If the latter happens
will a burst Chinese real estate
bubble destroy the Yuan?
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

17. Will a Burst Chinese Real Estate
Bubble Destroy the Yuan?
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

18. If folks in China start deciding to
sell their real estate holdings to
lock in gains it could become
contagious. There is strong
evidence that there are far too
many see-throughs (empty
buildings) in the People’s Republic.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

19. Chinese exports are dropping off as a
recession damaged Europe and a
slowly recovering North America are
buying fewer products from the Asian
exporter. How much equity will
evaporate if real estate prices fall
precipitously in China? How much of
Chinese foreign currency reserves will
need to be poured into a monumental
rescue?
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

20. If China is using its currency reserves
to prop up the economy will have any
currency left over to continually drive
the Yuan down in value. On the other
hand if a real estate collapse occurs
will it drag the Chinese economy and
the Yuan down with it? Will a burst
Chinese real estate bubble destroy the
Yuan? Probably not.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/

21. But it may serve to drive down the
real value of the Yuan versus other
currencies so that the Chinese
need not manipulate the currency
to get a cheap Yuan. As always to
your own fundamental analysis
and trade accordingly.
By: http://www.forexconspiracyreport.com/will-a-burst-chinese-real-estate-
bubble-destroy-the-yuan/