Grand Rapids, MI -- (ReleaseWire) -- 06/17/2013 -- For those people who are too busy to stay on top of events in the world's economy, financial advisor Dennis Tubbergen tries to help out.
Tubbergen is a financial advisor, author, radio show host and CEO of PLP Advisors, LLC. Tubbergen does his best to give brief updates when it comes to some of the latest significant events in U.S. and world economics and politics and how these events may impact the average American.
Many people enjoy his weekly newsletter at http://www.moving-markets.com and his blog at www.dennistubbergen.com, Tubbergen can be counted on to share his viewpoints and opinions. On June 3, 2013 his blog was titled New Zealand and China Looking to Bypass U.S. Dollar.
"Only a few weeks ago, I wrote about Australia and China putting together a deal to allow direct trade between the two countries, effectively bypassing the U.S. Dollar in trade between the two countries," began Tubbergen. "Now Australia's neighbor is getting into the act. The country of New Zealand is looking to put the same deal in place."
Tubbergen quotes below from a May 26, 2013 article from The Wall Street Journal.
Seeking to help its exporters, New Zealand is negotiating with China to make their currencies directly convertible, a spokeswoman for Prime Minister John Key said.
Wellington's push is aimed at driving down costs for companies that do business with China, which is close to overtaking Australia as New Zealand's No. 1 trading partner.
Talks are in the "very early stages" and "progressing," the spokeswoman said, adding that the issue had been brought up during Mr. Key's visit to China last month.
Officials at the People's Bank of China didn't return calls seeking comment.
Direct convertibility between the Chinese yuan and New Zealand dollar would end the need for New Zealand's companies and currency traders to convert New Zealand dollars or yuan into U.S. dollars when making or receiving payments.
New Zealand's two-way trade with China totaled 15.3 billion New Zealand dollars (US$12.4 billion) in the year ended April 30, compared with NZ$16.8 billion with Australia, government data showed last week. Most of New Zealand's exports to China are agricultural products -- particularly milk powder, meat and wool -- while most of its imports from there are computers, mobile phones and clothes.
Trade relations took a knock earlier this month when China temporarily blocked millions of dollars of New Zealand meat from entering the country, as it bolstered scrutiny of imports after a spate of mainly homegrown food-safety scandals.
Beijing is undertaking a long, gradual campaign to establish the yuan as a more market-oriented, international currency. China's State Council, or cabinet, said in a statement this month that the country would draft a plan to allow the yuan to become fully convertible. Meanwhile, the People's Bank of China is guiding the currency higher and set the median point of its permitted daily trading band last week at the strongest level ever.
"Where this goes from here is fully predictable," explains Tubbergen. "Historically speaking, the world's reserve currency has been the currency of the largest creditor nation in the world."
Tubbergen goes on to state that at one time that described the British Sterling, which was overtaken by the U.S. Dollar since the U.S. was the largest creditor nation in the world. Today, the U.S. has become the largest debtor nation in the world while China is the world's largest creditor nation.
"The move away from the U.S. Dollar has begun and is picking up steam," warned Tubbergen. "While it will take some time for the Chinese yuan to overtake the U.S. Dollar as the world reserve currency, I believe that it will ultimately happen."
Tubbergen's bottom line here?
"Short term, look for U.S. Dollar strength as Japan and Europe become bigger problems," he concludes. "However, long term you'd have to bet on the yuan."
To read the blog in its entirety go to http://www.dennistubbergen.com and select his June 3, 2013 entry.
Tubbergen’s syndicated radio show can be heard on metro Michigan stations WTKG 1230 AM and WOOD Newsradio1300 AM and 106.9 FM.
About DENNIS TUBBERGEN
Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in Grand Rapids, Michigan. Tubbergen is CEO of PLP Advisors, LLC and has an online blog that can be read at http://www.dennistubbergen.com. To view Tubbergen’s latest Moving Markets? newsletter, go to http://www.moving-markets.com.
The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.