Dirty Money

by | Oct 24, 2003 | Archives

Here is a message about the Chinese yuan from a friend who lives in China.“Gary, Chinese money is not ‘fully convertible’ but it will probably soon be. There is a debate within China and within the ‘economic community’ about how this will affect the country. If you want 5 divergent opinions, ask 5 economists.

“ But I digress this is a small story about money but not economics.

“ I usually exchange money on the black market Hong Kong dollars and US$ are valuable and a ‘hawker’ will always pay a bit more than the ‘bank rate’. The difference is now small however (there used to be a big difference). But, for convenience I used a bank yesterday, I exchanged US$ 300 for Yuan or RMB (same thing, interchangeable terms, and ‘kwai’ is the slang term like saying ‘a buck’ in the USA).

“ I handed the clerk 3 x US$100 bills. He looked carefully for counterfeits (a problem in China by the way). And he rejected one of the US$ 100 bills, but when I asked (with arm waving not with good Chinese) he said (with good ‘hand language’ also):
‘ Sorry, we are not allowed to take dirty money, this bill is soiled.’ The bill was older than the other 2 and SLIGHTLY dirty.

“ He gave me my money for the US$ 200 as about RMB 1650 with 16 RMB 100 notes (RMB 100 is the largest bill in China makes for bulging pockets). I looked at the bills, and they ran from new to very old and dirty; I took out the 2 oldest, dirtiest bills and handed them back and said (in bad Chinese): ‘Sorry, I don’t take dirty money, these 2 are soiled.’

“ The clerk looked at me frowned – said nothing for 3 seconds called to his supervisor she frowned, then smiled a little, then she handed me 2 brand-new RMB 100 bills and then she said something to the 4 or 5 people in the ‘cage’. In unison, as I walked away, everyone in the cage and many in line started laughing.

“ Laughter is the same in any language.”

This is a message we should all remember more often. However if you want to learn more about investing in the Chinese yuan join Thomas Fischer and me at our upcoming course on International Investing two and a half weeks from now, November 7 though 9, at Jefferson Landing Country Club here in Ashe County, North Carolina. Details are at https://garyascott.com/courses/bldh.html

Until next message, good investing.