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Asian De-Dollarization Explodes: South Korean Renminbi Deposits Surge 55-Fold In A Year

Tyler Durden's picture




 

Submitted by Simon Black via Sovereign Man blog,

The Bank of Korea — South Korea’s central bank — released data that says South Korean domestic deposits have reached 16.19 billion Chinese renminbi in July this year, which is a 55-fold increase from the same period last year when renminbi deposits accounted for only 290 million.

According to data from South Korean banks, the proportion of foreign currency deposits held in renminbi was 0.4% at the end of 2012. That number reached 13.7% at the end of last year, while at the end of July this year the renminbi accounted for 25.9% of all foreign currency deposits in South Korea.

That’s an incredible, exponential increase.

Since Korean interest rates continue to be low and follow closely those of most Western countries, Koreans realize that if they continue to hold their money in bank accounts denominated in won, their savings are steadily and surreptitiously being diminished by inflation that’s higher then their paltry returns.

With a lack of good investment opportunities in a zero-interest rate environment and with frothy equity markets, Koreans are at least diversifying their currency exposure, with domestic capital rapidly flowing into renminbi deposits that yield much higher at around 3.25% per year.

Coupled with the continued strength of the renminbi, the attractiveness of diversifying their capital in foreign currencies, and the renminbi in particular, is clearly a firm trend among Koreans.

This is a well known scenario. Just as Europeans from countries with weaker currencies and economic prospects used to safeguard their savings by holding them in Deutschmarks and Swiss franks, we see the same trend happening today.

Individuals, companies and even governments are diversifying their currency exposure — mostly on the account of the US dollar. Renminbi denominated bonds are now being issued by businesses all over the world– heck, even McDonald’s issued a renminbi bond.

And now the UK will become the first country in the world other than China to issue renminbi denominated government debt. In fact, just this morning the UK Treasury announced that it hired Bank of China, HSBC and Standard Chartered to arrange the sale, with the bond issuance likely happening next Monday.

This follows last week’s announcement from the People’s Bank of China that renminbi and euro are now directly tradable, without the need to use the US dollar as a conduit.

The signs are clearly all there. Everyone realizes that the present system is on its way out and are taking appropriate measures. The Germans, the French, the Brits, the Canadians, the Koreans…

Don’t you think it’s time to step up and do something about it too?

The situation today looks a lot like one big game of musical chairs. Investors and “hot money” desperately looking for yield in a zero interest rate environment are pushing prices of practically all assets sky high and diversifying into markets and currencies with brighter prospects.

Make sure that you’re not the one left stranded when the music stops.

*  *  *

Our goal is simple: To help you achieve personal liberty and financial prosperity no matter what happens.

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Thu, 10/09/2014 - 19:54 | 5311556 knukles
knukles's picture

Did Obie make a speech that I missed today?

Thu, 10/09/2014 - 19:57 | 5311565 stinkhammer
stinkhammer's picture

paging edward quince to the white courtesy phone please

Thu, 10/09/2014 - 20:13 | 5311631 espirit
espirit's picture

OK, I'll bite...

 

but when?

Thu, 10/09/2014 - 20:52 | 5311699 zaphod
zaphod's picture

"Everyone realizes that the present system is on its way out and are taking appropriate measures. The Germans, the French, the Brits, the Canadians, the Koreans…"

You can add American's who have been paying attention and stacking to that list....

Thu, 10/09/2014 - 21:33 | 5312020 NoDecaf
NoDecaf's picture

Hey what's going on? I just tuned in...did I miss something?

 

#dancingwith_The_stars

Thu, 10/09/2014 - 21:44 | 5312082 medium giraffe
medium giraffe's picture

Some bullshit about banks, or chinese food or something.  Hey, did you know that Kim Kardashian got her ass insured for like a million bucks?!

Fri, 10/10/2014 - 03:27 | 5312913 Hannibal Barca
Hannibal Barca's picture

Only a million? I would bang it for that much!

Thu, 10/09/2014 - 22:10 | 5312203 ClowardPiven2016
ClowardPiven2016's picture

Edward Quince, WTF....didn't he know Carlos Danger was still available?

Fri, 10/10/2014 - 05:32 | 5313029 SAT 800
SAT 800's picture

Hey, knukles, they have a free 17 page report; you're not going to miss out, are you ?

Thu, 10/09/2014 - 19:59 | 5311573 gwar5
gwar5's picture

Seems everybody knows the USD system joke is dying except Americans. The complicit MSM adn polys will be shocked, shocked when it 'unexpectedly' crashes.

 

Fri, 10/10/2014 - 00:42 | 5312701 peter4805
peter4805's picture

Back when the Andrews Sisters were "Working for the Yankee Dollar" people flocked to the safety and security of the almighty greenback.

Now they're running from it in droves.

https://www.youtube.com/watch?v=DeY2ORU5uU4

 

Thu, 10/09/2014 - 20:00 | 5311575 The Duke of New...
The Duke of New York A No.1's picture

Don't worry Ben .... when QE fails we all know it was all Ebola's fault!.

Thu, 10/09/2014 - 20:06 | 5311608 Bernoulli
Bernoulli's picture

Or super mario's. because he DIDN'T use it properly!

Thu, 10/09/2014 - 20:01 | 5311584 hairball48
hairball48's picture

It'll be interesting to see who/what sops up all the dollars that will be sold

Thu, 10/09/2014 - 20:59 | 5311847 new game
new game's picture

plus one for "sops"!

Thu, 10/09/2014 - 21:20 | 5311949 Oxbo Rene
Oxbo Rene's picture

Belgium will save us ! ! !

Fri, 10/10/2014 - 05:30 | 5313026 SAT 800
SAT 800's picture

Maybe you can't eat gold; but you can definitely eat waffles ! (sorry, t he devil made me do it).

Fri, 10/10/2014 - 07:23 | 5313190 RECISION
RECISION's picture

Haha  :-)

very good

Fri, 10/10/2014 - 05:10 | 5313011 SAT 800
SAT 800's picture

Ha-Ha. that one got me in the funny bone. The answer when the time comes is "no bid". Nobody is the who  who is going to buy them.  However, that time is not now.

Thu, 10/09/2014 - 20:06 | 5311602 Bernoulli
Bernoulli's picture

But... but...

....what about "king dollar"??

 

Fri, 10/10/2014 - 05:29 | 5313024 SAT 800
SAT 800's picture

What about King George III; what about the Zero Hedge motto ?

Thu, 10/09/2014 - 20:08 | 5311615 Squid Viscous
Squid Viscous's picture

Can't Icahn create his own CB? just to backstop the "real" one, I heard he's worth trillions now...?

Thu, 10/09/2014 - 20:08 | 5311616 reader2010
reader2010's picture

When the wheels start to fall off suddenly,  the sheeple are distracted to things,  such as Ebola. Go figure. 

Thu, 10/09/2014 - 20:13 | 5311632 Unknown Poster
Unknown Poster's picture

"renminbi deposits that yield much higher at around 3.25% per year", and they are safer too. Well, OK then.

Fri, 10/10/2014 - 05:11 | 5313012 SAT 800
SAT 800's picture

Ha-Ha. I just love things that have higher coupons and are "safer too". Ha-Ha.

Thu, 10/09/2014 - 20:20 | 5311655 Kirk2NCC1701
Kirk2NCC1701's picture

Lemme see if I got my Prepper radar in tune...

1. Keep on hand:  Mix of Cash (USD, CNY, EUR), some PM Bullion (Ag, Au, Pt), Prepper's "Stuff of Life" (Food, H2O, First Aid & Meds, Toiletries), Fuel, Tools, G+A.

2. Also maintain and invest in an active Network of "Kindred Spirits" (people of similar mind or same background, culture or tribe), i.e. "Birds of a Feather..."

You know... that kinda sounds like many "normal people" of many decades ago, before Big Bro came along and we ALL became "Folks".  Now, rather than being self-reliant, responsible and prudent (to be admired and aspire to), we are branded as "Preppers", i.e. people who are to be held suspect or avoided and maybe even feared.  What crazy/interesting times we live in.

Thu, 10/09/2014 - 20:46 | 5311779 Boomberg
Boomberg's picture

My grandparents lived off the land on a small farm, raised most of the food they needed and only needed small amounts of money for odds and ends they couldn't make or grow, like salt. They were not oddballs; that was normal in their times in the rural South. The Great Depression hit and they never knew it and could care less. Today, they would be considered either preppers or hippies depending on your viewpoint, and probably on a terrorist watch list. 

Thu, 10/09/2014 - 22:05 | 5312176 ClowardPiven2016
ClowardPiven2016's picture

and sadly they would probably struggle to survive trying to pay the exhorbitant taxes.

But it would be only fair because after all....."They didn't build farm that"

Thu, 10/09/2014 - 22:51 | 5312377 KnuckleDragger-X
KnuckleDragger-X's picture

I never thought about it because I was raised to do it automatically. Survivalists came along then preppers but it's same as it always was to me. They can point and laugh now but they'll demand their grasshoppers share when the wheels come off and they can have their share, 165 grains at a time.

Thu, 10/09/2014 - 20:28 | 5311682 Silver Bullet
Silver Bullet's picture

Sleep tight switching your reserves to a country that is a Tahrir Square away from politcal upheaval. Enjoy.

Thu, 10/09/2014 - 20:52 | 5311809 Frankly Speaking
Frankly Speaking's picture

You forgot to mention Occupy Wall Street in your drivel.

Thu, 10/09/2014 - 21:11 | 5311903 Silver Bullet
Silver Bullet's picture

Yes because the threat of an occupy Wall Street like event is even 1-100 as dangerous to the United States as a Tahrir Square in Beijing.
Hey, by all means, convert all your cash to Yuan. Go ahead.

Thu, 10/09/2014 - 21:02 | 5311859 hero HNL
hero HNL's picture

Scums of Asia investing in each other.

 

Koreans are too stupid to realized that it's on its way to become a vassal state of china like Tibet or Inner Mongolia. It will be bankrupt a 3rd time with major company earnings plummetting so hard.

Thu, 10/09/2014 - 21:33 | 5312018 The_Prisoner
The_Prisoner's picture

As in opposite to being a vassal state of the US like it has been for the last 50 years, together with Japan?

How's the weather in Tokyo today? I heard it was cloudy with a chance of Cesium 137.

Thu, 10/09/2014 - 21:39 | 5312050 kchrisc
kchrisc's picture

If one listens closely, they can hear the beautiful song of the petro-dollar fat lady singing.

An American, not US subject.

Thu, 10/09/2014 - 21:53 | 5312123 eddiebe
eddiebe's picture

Until a currency links to PM's they are all TP.

Thu, 10/09/2014 - 22:15 | 5312218 Karaio
Karaio's picture

US Dollar: 

 

1 is high, is worth more than the Dollar, the Dollar, Yen, any other fiat currency. 

2 Physical gold is down, gold paper too. 

3 Commodities such as oil, iron, copper are at record low. 

 

This high - bogus - Dollarization is artificial. 

Our clients are buying these assets and inflating assets such as factories, mines, farms, houses worth half if they were built with marble from Carrara - preferably bought from idiots who is reliable US Dollar currency. 

I know some farmers who had many dollars in bank accounts, are buying machines, bovine semen, investing in limestone and other products, are getting rid of their dollars, buying some gold bars and stocking, construction of silos and warehouses. 

The US Dollar is higher than other currencies in this period, for the reasons above. 

When this party's over, who holds the production will be on the edge of the stratosphere. 

Those who remained with the paper will not yield. 

The music stops playing. 

Anyone with half a brain knows that the buyback is what any company does before closing their capital again. 

The logic is simple. 

I open my capital, increase the company gain a barbarity, recompro my actions and stop paying dividends to those imbeciles. 

Fuck them with paper money that I'm returning. 

What matters is the production, sale, my sweat and toil, no more leeches. 

hehe.

Thu, 10/09/2014 - 22:35 | 5312312 user2011
user2011's picture

This is interesting.. Chinese corrupted officials and businessmen are taking their money and run to other countries and buying up other hard assets.. Meanwhile, people outside China are buying up yuan or yuan related investments.

I guess it is really need to buy physicals now..

Thu, 10/09/2014 - 23:35 | 5312539 falconflight
falconflight's picture

IMO this is one of the most important stories on ZH today.  It's more important than the Eboli stories of the day.

Thu, 10/09/2014 - 23:38 | 5312541 falconflight
falconflight's picture

When will Saudi Arabia accept the Yaun for oil settlements?  

Thu, 10/09/2014 - 23:39 | 5312548 starman
starman's picture

you know they have a even more sinister back up plan if everything fails! Could it be Belgium?

Fri, 10/10/2014 - 00:19 | 5312650 q99x2
q99x2's picture

Bitcoin Last Price $369 the goose drank wine.

Fri, 10/10/2014 - 01:44 | 5312804 Fuku Ben
Fuku Ben's picture

“If you only knew the magnificence of the 3, 6 and 9, then you'd have the key to the universe" -Nikola Tesla

Fri, 10/10/2014 - 02:01 | 5312826 eishund
eishund's picture

Yes. here is the key ---> http://en.wikipedia.org/wiki/Salakau

Fri, 10/10/2014 - 05:24 | 5313022 SAT 800
SAT 800's picture

Sometimes I wonder who could be crazier than people who think Bitcoin is a store of value; but then I remember Roman Catholics.

Fri, 10/10/2014 - 00:30 | 5312678 e_goldstein
e_goldstein's picture

And now the UK will become the first country in the world other than China to issue renminbi denominated government debt. In fact, just this morning the UK Treasury announced that it hired Bank of China, HSBC and Standard Chartered to arrange the sale, with the bond issuance likely happening next Monday.

WTF? The Chinese hate the British.

Fri, 10/10/2014 - 05:20 | 5313016 SAT 800
SAT 800's picture

Personally, I regard the government of record of  the UK as mentally incompetant. However, during t he USA great inflation from 1976-81 when the value of the dollar was cut in half; we issued bonds denominated in Swiss Francs. Basically, it's considered a sign of desperation in a country with a failing currency. T he Pound is very over priced; t he UK doesn't actually have an economy.

Fri, 10/10/2014 - 07:09 | 5313156 Chuck Knoblauch
Chuck Knoblauch's picture

China doesn't have a nation full of pensioners.

London doesn't have a future anymore.

They are just trying to save the past.

Fri, 10/10/2014 - 01:55 | 5312819 onmail
onmail's picture

oops

Fri, 10/10/2014 - 01:57 | 5312820 onmail
onmail's picture

America's Grand Theft Game :

 

Cause unrest in China/Hongkong just like in Ukraine for demo(n)cracy.

Already Obama issued statement to China to be peaceful towards protestors(just like in Ukraine, Thailand, Egypt & in other places)

Using spy plane (unknown ) paratroopers will descend on high buildings.

They will randomly shoot at protestors killing many on both sides ( as in Ukraine).

America will blame China for violence , murders, masscares & drag its leaders to ICC (international criminal court)

Then protestors will overturn the govt. hold elections and declare (US sponsered) candidates as their leaders.

In order to help protestors gain power (just like in Ukraine),

America will have secret deal to transfer all their gold to USA.

So after coming to power , these protestors will load all thousands of tons of Chinese gold on US warships.

 

Game of dungeons and dragons.

Game of Elder-scrolls skyrim -- need money - rob the dungeons(developing countries)

Fri, 10/10/2014 - 23:44 | 5317518 fancyfree
fancyfree's picture

You don't look behind the pawns.  The Jesuits and Knights of Malta thought that the US military would keep on doing the bidding of the Jesuits.  But the Knights of Malta are outnumbered and outflanked in the military after they tried to bomb Charleston.  Read this: 

https://s3.amazonaws.com/khudes/A+Grandfather%27s+Encouragement.pdf

and this https://s3.amazonaws.com/khudes/Twitter6.15.14.pdf

and now this: 

https://s3.amazonaws.com/khudes/tWITTER10.10.14.2.pdf

 

Fri, 10/10/2014 - 02:57 | 5312890 JamesBond
JamesBond's picture

Making bank deposits in different curriences to hedge against a Fiat crash...  now that's the kind of bank I can do business with.

 

 

 

Fri, 10/10/2014 - 05:23 | 5313018 SAT 800
SAT 800's picture

Diversification; it always works, doesn't it? Well, doesn't it ? I detest diversification in all its forms. as you say diversifying in different colored paper; brilliant; simply brilliant. Great Minds at work t her,  no doubt.

Fri, 10/10/2014 - 05:35 | 5313030 Fred123
Fred123's picture

So, this means that I BUY dollars, right?

Fri, 10/10/2014 - 06:04 | 5313059 fancyfree
fancyfree's picture

The planned demolition of the Federal Reserve Note https://s3.amazonaws.com/khudes/usdollar1.pdf  is not going the way the network of global corporate control http://arxiv.org/PS_cache/arxiv/pdf/1107/1107.5728v2.pdf

 intended.   The US dollar issued by the Treasury is alive and well and sitting in the Global Debt Facility, along with the world's gold: 

https://s3.amazonaws.com/khudes/UBS+UNCUT.pdf

 

The BRICS, the Group of 77 and the US minus the Federal Reserve are in a coalition to place the network of global corporate control under the bankruptcy laws of the jurisdictions where the central banks are located -- these banks are insolvent:

 

https://s3.amazonaws.com/khudes/Treaty+of+Versailles+Gold+Bullion+Certificates.pdf

Fri, 10/10/2014 - 08:43 | 5313171 Chuck Knoblauch
Chuck Knoblauch's picture

The crime of the pedophilia raining on The City of London.

I wish Charles Dickens was still alive to write the tale.

Someone will, eventually, with names of real people.

Do NOT follow this link or you will be banned from the site!