StockGumshoe... Steve Sjuggerud's pitch about a new IMF reserve currency and the investment opportunities he sees -- that's not an article from me, but it's a discussion on the site, including some answers, so you can see our readers' suggestions Posted on April 30, 2015 by wizard
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Any 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.
This is a discussion topic or guest posting submitted by a Stock Gumshoe reader. The content has not been edited or reviewed by Stock Gumshoe, and any opinions expressed are those of the author alone.
24 Responses to Dr. Steve Sjuggerud IMF October 2015
Dennis Hoppe says:
Do you know what this new Reserve Currency is. I say its the Chinese Yuan or Renminbi.
Garlandlink says:
Its the IMFs Special Drawing Rights (SDRs)
see pro.moneymappress.com/MMR...&l=325814&r=MC&g=0&h=true
Eldon Bates says: May 13, 2015 at 5:43 pm
Of course its the Chinese Yuan. What else could it be.
Cathy Kandravi says:
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 dont 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 ETFS!
Garlandlink says:
Besides watching pro.moneymappress.com/MMR...&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 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 pro.moneymappress.com/MMR...&l=325814&r=MC&g=0&h=true
Johnny Boy says:
Yes, hes 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, Ive 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 havent 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 dont think youre 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. Thats 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 Chinas 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 youll hear about all over the news.
Bobwins says:
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. Thats the one Ive 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 didnt 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 its current $174 price.
franklyn says:
you forgot to mention the stock names, I think that some of us could be interest Travis Johnson, Stock Gumshoe says:
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).
fabian says:
Thats correct, I confirm.
Mark Waldman says:
The new reserve currency isnt the yuan, its the IMFs Special Drawing Rights (SDRs). SDRs 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.
Travis Johnson, Stock Gumshoe says:
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. Its 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 governments purview. Theres potential for big ebbs and flows if Chinas 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.
Doesnt mean the Yuan wont pop a bit or that Chinese stocks cant continue to surge as the financial barriers between Hong Kong and Mainland China slowly get taken down, just that I dont think were going to wake up one day in October and find the dollar 20% lower and the Yuan 20% higher. This stuff usually moves slowly. Theres an interesting article on Chinas capital controls and these changes here if youre curious (its from last Fall, but still relevant I think): www.moneyandbanking.com/c...-the-exchange-rate-regime
Crazy Frank says:
Old doc Sjuggerud is referring to a proxy stock investment called KCNY. I know because ( gasp) Im 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. Id provide more detail on this thoughts but Im writing this from work and well, I should be doing what Im paid for. Regards all. I may weigh-in with more info on this security at another time.
Travis Johnson, Stock Gumshoe says: May 20, 2015
Thats 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, havent checked to see what the fees are). No real exposure to Chinese stocks, its just commercial paper. The ETF is quite new, they describe themselves pretty well on their website here: kraneshares.com/an-introd...cial-paper-etf-nysekcny/#
Garlandlink says:
Concur. See pro.moneymappress.com/MMR...&l=325814&r=MC&g=0&h=true
Garlandlink says:
This issue, US dollar losing its 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 pro.moneymappress.com/MMR...&l=325814&r=MC&g=0&h=true
Travis Johnson, Stock Gumshoe says:
It has also been widely predicted by several pundits for at least five years running now (most vociferously with Porter Stansberrys End of America pitch), and similar doom for the dollar predictions have been popular off and on for 20 years that doesnt mean theyre all wrong about the direction of things, but its important to be mindful of the gradual nature and political unpredictability of fluctuations in world currencies. Sure, its 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 thats where were headed now
but its 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, youd be in terrible shape now compared to the boring old 60/40 stocks/bonds portfolio.
hendrixnuzzles says: May 20, 2015
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 Rickards macro picture pretty convincing. But the timing is unpredictable, and the exact way things will play out is also uncertain
especially since we dont know if inflation or deflation will occur first, which require opposite instruments to prepare.
Jim W says:
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.
fabian says:
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.
chow says:
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 Alerts strike rate for success to be about 1/3 so far this year. Maybe I could succeed if I bet against the Alerts predictions.
hendrixnuzzles says:
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
Jo McIntyre says:
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. Were 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!
hendrixnuzzles says:
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 dont want to own it.