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Juan_Tamad
Board Royalty
Joined: Jan 29, 2007
Posts: 6268
Location: Smoky Mountain
Status: Offline
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 Posted:
Oct 25, 2007 - 04:32 PM |
 
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| Post subject: Suggestions Please... |
Hearing a lot that the RMB will have an exchange rate of 6.5 to 1 USD by next year.
- What would you suggest doing if you have your salary is in USD?
- How will you invest your money? |
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8lrr8
StreetBeater
Joined: Oct 14, 2004
Posts: 2344
Location: here!
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Oct 25, 2007 - 04:40 PM |
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change it into RMB. is this a trick question? |
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dlaw
Raver
Joined: Aug 31, 2006
Posts: 477
Location: Xu Jia Hui
Status: Offline
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Oct 25, 2007 - 04:57 PM |
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please.. I think he meant, he used to be able to change (e.g.) 750,000 RMB, but next year is only 650,000 RMB. He lost 100,000 RMB, what should he do to minimize? |
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8lrr8
StreetBeater
Joined: Oct 14, 2004
Posts: 2344
Location: here!
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Oct 25, 2007 - 05:02 PM |
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in that case: stocks, options, gambling, etc... do whatever u're good at. and if u suck at all of 'em, well then, tough luck. educate yourself in one of 'em and get to it. |
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One_Brick_Shy
Rocker
Joined: May 20, 2004
Posts: 765
Location: Out looking for a brick, of course.
Status: Offline
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Oct 25, 2007 - 06:52 PM |
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Who can see the future? Think maybe you're looking for gambling advice. |
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txaggie07
Talker
Joined: Aug 10, 2007
Posts: 78
Status: Offline
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Oct 26, 2007 - 02:42 AM |
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The $ is at is lowest. It looks and seems (hopefully to us Americans) that the only thing it can do at this point is strengthen even against the yuan. |
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txaggie07
Talker
Joined: Aug 10, 2007
Posts: 78
Status: Offline
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Oct 26, 2007 - 02:43 AM |
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but then again one_brick_shy said it best |
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One_Brick_Shy
Rocker
Joined: May 20, 2004
Posts: 765
Location: Out looking for a brick, of course.
Status: Offline
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Oct 26, 2007 - 05:49 AM |
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Why would you want the USD to go up? When it's low imported goods/services are more expensive while domestic are cheaper. They are also cheaper for trading partners, thus in theory anyway, creating jobs for the American economy. Look at the Canadian economy over the last 30 years. Has benefited from a low dollar comparatively to the American.
So again, still say is advice on where to place a gamble. You pick your winners. You pick your losers. Fifty-fifty chance. |
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The only difference between you and me is that you're you and I'm me. |
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CaptainCook
Rocker
Joined: Mar 20, 2007
Posts: 684
Status: Offline
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| Posted:
Oct 26, 2007 - 09:12 AM |
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| Post subject: Re: Suggestions Please... |
| Juan_Tamad wrote: |
Hearing a lot that the RMB will have an exchange rate of 6.5 to 1 USD by next year.
- What would you suggest doing if you have your salary is in USD?
- How will you invest your money? |
As mentioned by others above, who knows what will happen to the exchange rates but regardless of the changes in rates, if you have most of your money in the currency of your home country, you will not loose when it is time to go back home.
However, if you have decided that the ex-rate will be at 6.5:1 next year then there is a few options to minimise your pain.
1. re-negotiate your salary in RMB as soon as possible
2. if you can't do step 1 then bring all your savings and access and invest in China (properties and managed funds or ....fixed deposit if you're conservative) now. The USD salary will go to your bank account in USD and you can deal with it later (remember, you will ONLY loose out on the exchange rate if you have to use this money in China when the ex-change rate is against you).
Have fun  |
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DogTag
Newbie
Joined: Oct 12, 2007
Posts: 7
Status: Offline
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Oct 26, 2007 - 09:43 AM |
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I think renegotiating is the first logical way.
Considering that the US dollar is getting weak and the RMB is getting strong, it would be better to get a contract in RMB.
Anyway, it is still depends on your plans, if you are staying here in China for a long time or just for a couple of years.
BTW, by 2008, the new china labor contract law will take effect. |
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Adam7
Rocker
Joined: May 11, 2004
Posts: 759
Status: Offline
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Oct 26, 2007 - 09:54 AM |
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Borrow 1 years salary in USD, convert it to RMB today. Pay back the USD with your salary. |
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Why? Just tell me why? |
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darna!
Raver
Joined: Aug 07, 2007
Posts: 470
Location: sa banda doon
Status: Offline
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Oct 26, 2007 - 10:43 AM |
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granting it will be true (vs the rumored soon-to-be bubble burst):
- remember the old adage "don't put all your eggs in one basket."
- if you have the dough, know how, friends who know how, or have connections to people who know how, invest in gold. this should protect you from the fluctuations of paper money.
then again, who can see the future? alas, it's all gambling.  |
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PARENTAL GUIDANCE: Some posts may not be suitable for children under 30 yrs old |
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8lrr8
StreetBeater
Joined: Oct 14, 2004
Posts: 2344
Location: here!
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Oct 26, 2007 - 11:02 AM |
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| darna! wrote: |
| remember the old adage "don't put all your eggs in one basket." |
the old adage is wrong. putting your eggs in multiple baskets does not guarantee a higher sharpe ratio.
let me guess, u probably also believe in the old adage: a bird in the hand is worth more than 2 in the bush? |
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darna!
Raver
Joined: Aug 07, 2007
Posts: 470
Location: sa banda doon
Status: Offline
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Oct 26, 2007 - 11:15 AM |
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depends on the basket @8lrr8. but i'm not going to a debate because it's all but gambling. nothing is certain. |
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Batavia
Rocker
Joined: Sep 15, 2006
Posts: 610
Status: Offline
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Oct 26, 2007 - 11:22 AM |
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Speculation is gambling but investment is not.
Looking at current condition in China, the only way for the currency to go is up.
China is where the money is right now. |
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Michael
Moderator
Joined: Mar 22, 2002
Posts: 5292
Status: Offline
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Oct 26, 2007 - 11:26 AM |
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| Quote: |
| Borrow 1 years salary in USD, convert it to RMB today. Pay back the USD with your salary. |
This is what the US is doing by printing money like its going out of style. Run up a large debt, inflate the dollar, and pay it off with cheaper dollars in terms of real value. Of course, Japan and China and other countries who have large dollar reserves are liking that very much.
| Quote: |
| Looking at current condition in China, the only way for the currency to go is up |
We live in hope. However, it has a lot further potential to go down with the current policies - ask the folks in Argentina. How else do you pay for a 2.4 Trillion dollar (that's a lot of zeros folks) war over the next decade? |
Last edited by Michael on Oct 26, 2007 - 11:32 AM; edited 1 time in total |
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chingiskhan
StreetBeater
Joined: Apr 24, 2007
Posts: 2244
Location: Shanghai
Status: Offline
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Oct 26, 2007 - 11:32 AM |
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If you are American it shouldn't matter too much since your home country is the US and your US salary and any mutual funds or stocks you buy (in the US) isn't going down. It will only mean each month, your local cost of living will be increasing as the dollar continues to decline in value.
I get paid in RMB so I get a little pay rise every month which is nice (used to be 8.3 rmb to the dollar, now it's 7.5 and falling every month). But it's because I have a local employment contract. You can't simply request for your salary to be quoted in RMB, it depends how your contract is set up and how you came to be located here. For example, if you're sent here for a 6 month stint and your salary is continued to be paid in the US, you can't just ask them to make you a local employee for 6 months. |
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Netswimmer
Talker
Joined: Jan 12, 2006
Posts: 96
Status: Offline
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Oct 26, 2007 - 11:50 AM |
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@Juan_Tamad, play your cards well. If you can re-negotiate now, better do. If your company is liberal enough (+ your value to your company), you should be able to get a better (or more flexible?) deal.
as for your current assets, invest if you can. bonds, stocks, mutual funds, gold - and it doesn't have to be in China (I'm assuming that as an expat all your expenses here are covered by your company- so no worries here and most of your salary are back home.)
Are you wiring $$$ to here or anywhere else on a regular basis? |
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BS
Reacher
Joined: Sep 12, 2007
Posts: 238
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Oct 26, 2007 - 12:02 PM |
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| chingiskhan wrote: |
If you are American it shouldn't matter too much since your home country is the US and your US salary and any mutual funds or stocks you buy (in the US) isn't going down. It will only mean each month, your local cost of living will be increasing as the dollar continues to decline in value.
I get paid in RMB so I get a little pay rise every month which is nice (used to be 8.3 rmb to the dollar, now it's 7.5 and falling every month). But it's because I have a local employment contract. You can't simply request for your salary to be quoted in RMB, it depends how your contract is set up and how you came to be located here. For example, if you're sent here for a 6 month stint and your salary is continued to be paid in the US, you can't just ask them to make you a local employee for 6 months. |
I guess it's indeed not such a big deal for people form the USA.
However, it's quite a different story for Europeans (others?) paid in USD or with assets in USD. USD has been going down against the EUR for a long time and is possibly going further down or will remain low.  |
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Netswimmer
Talker
Joined: Jan 12, 2006
Posts: 96
Status: Offline
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Oct 26, 2007 - 12:04 PM |
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@BS, true |
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chingiskhan
StreetBeater
Joined: Apr 24, 2007
Posts: 2244
Location: Shanghai
Status: Offline
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Oct 26, 2007 - 12:21 PM |
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| BS wrote: |
I guess it's indeed not such a big deal for people form the USA.
However, it's quite a different story for Europeans (others?) paid in USD or with assets in USD. USD has been going down against the EUR for a long time and is possibly going further down or will remain low. |
Yes, true, but you also have a much stronger case for changing the currency to RMB or Euro. On the other hand, the US dollar is certainly going to continue to fall against the RMB because the true value is too high right now. It's probably not the case for USD to Euro, even if it's bad right now. |
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BS
Reacher
Joined: Sep 12, 2007
Posts: 238
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Oct 26, 2007 - 12:30 PM |
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You mean change USD to RMB? But then, what do you do with the RMB? It is one of the questions I asked in another thread, I know about the exchange memo when it's cash, but what happens if you wire usd into China, convert them into rmb and later on want to transfer them out? |
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chingiskhan
StreetBeater
Joined: Apr 24, 2007
Posts: 2244
Location: Shanghai
Status: Offline
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| Posted:
Oct 26, 2007 - 12:35 PM |
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No, I meant that in the long term, USD will not continue to fall against the Euro but it WILL with RMB ssimply because it is too high due to previous artificial restrictions keeping it at 8.3 rmb to 1 USD. So you are not in as bad a position as our friend from the US. |
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8lrr8
StreetBeater
Joined: Oct 14, 2004
Posts: 2344
Location: here!
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| Posted:
Oct 26, 2007 - 01:01 PM |
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| darna! wrote: |
| depends on the basket @8lrr8. |
obviously. 
| darna! wrote: |
| but i'm not going to a debate because it's all but gambling. nothing is certain. |
sure, but would u recognize a high sharpe ratio if u hit u smack in your head? |
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iara
Veejay
Joined: June 09, 2006
Posts: 2075
Location: brazil-shanghai
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Oct 26, 2007 - 01:03 PM |
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when we came from Brazil, 3 years ago, USD x Real (brazilian money) was 1USD x 3 R$...
Now is 1 USD x 1,75 R$! for us is a big trouble, but we try not send money to Brazil, praying that something will happens soon and our currency will go down again.
Here we get half in USD, half in RMB, but the tottal is a RMB value, so we don't lost money. |
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