OFF INTO THE WILD WET YONDER How does this...
San Francisco to Become U.S. RMB Financial Center
Famous for a variety of reasons, the City by the Bay could soon be adding currency trading center to its resume, as it sets out to become the West Coast hub for currency transactions conducted in Chinese Renminbi (RMB).
If successful, San Francisco would join ranks alongside Hong Kong, London, and Singapore as centers where offshore trading in RMB has already been established and is growing.
China has been slowly opening up its financial system, and a major area of attention has naturally been its currency, particularly in regard to forex (FX) trading.
While some may lament that San Francisco (actually most of the United States) has come late to this party—partly perhaps to the hubris of having the world’s reserve currency—the city is serious about the venture, and local leaders have voiced enthusiasm about the positive economic possibilities it would create.
But what of the unintended (intended?) consequences of being the U.S. hub for China’s FX trade? Potential consequences in property prices, for example. San Francisco is home to a large Chinese population, and with property prices already exorbitant there what will happen when you can actually hold bank accounts and invest in RMB?
US developers have already reached out to Chinese banks for investment, so imagine for a second if large-scale RMB investment were suddenly availabile. Property prices in San Francisco still have room for more hot air… they always do. That is, until they don’t.
H/T: CCTV AMERICA