Iraqi Dinar Investment Is A Better Investment Than The Chinese Yuan

Why the Iraq Dinar offers a more reliable long-term opportunity?

Why the Iraq Dinar offers a more reliable long-term opportunity

The Chinese Yuan is becoming an increasingly popular investment. However, the currency may be significantly overrated, while the Iraqi dinar is highly undervalued. Shrewd investors will recognize the benefits of investing in the dinar over the Yuan.

Why the Chinese currency is over-hyped?

The Chinese economy is growing rapidly. Some observers believe the Yuan will be a valuable investment at some point in the future. However, there are a variety of reasons why many other experts feel the currency is significantly overvalued and due for a correction soon.

Unsustainable economic growth

Interest in the Yuan is primarily due to China’s rapidly growing economy. The Chinese GDP has reportedly grown by 9.8% a year over the past 25 years.

However, economists feel China’s current rate of economic growth is unsustainable, even while Iraq’s economy appears to be at the beginning of a rapid growth stage. Yu Yongding, a former member of the policy committee of the People’s Bank of China, said growth rates will stagnate in the near future. He cited pollution, social unrest and a lack of a strong domestic economy as the main problems China faces.

Misleading GDP figures

Many experts assert that China’s official economic data reports are falsified. They say that China’s actual GDP growth is closer to 7.8%. Even many leading Chinese politicians have claimed that the data are being heavily manipulated. Zhu Rongji, the former premier of China, had urged the National Bureau of Statistics to report the figures more accurately going forward.

Increasing inequality

Increasing inequality is also causing serious problems for the Chinese economy. According to the World Bank, China has a GINI coefficient  (a metric used to measure income distribution or economic inequality) of 0.474, which is currently the fourth worst in the world.

These problems are causing growing social unrest and slowing the circulation of money in the economy. The World Bank report clearly shows that inequality is much worse in China than in Iraq. While it is still facing some of its own challenges with inequality, Iraq’s GINI coefficient is only 30.9.

Distrusted by the global economic community
China is also losing trust from the global economic community. The United States Government recently indicted several members of the Chinese government for stealing trade secrets for public and private companies. Many foreign businesses are reluctant to trade with China for fear their trade secrets will be stolen.

Quantitative easing

The Chinese central bank has recently indicated that it may begin a quantitative easing program in the near future. They feel the new program is necessary to reverse a slowing economy, especially as citizen’s demand for real property declines. Quantitative easing may also be needed in order to keep export levels high, which is essential because the country’s economy depends on them.

Expanding the monetary base may improve the long-term outlook for the country’s economy, but it will also lead to a weaker Chinese currency. The central bank has also indicated that the monetary policies may lead to even larger financial problems by increasing the national debt load.

This article Why The Dinar Is A Better Investment Than The Chinese Yuan was originally published at DinarInsider