Montreal, Canada

The Chinese decided to widen the trading band of the yuan on Saturday and everyone on the planet is excited about the move – including investment strategists scrambling to find ways to play a new bull market in Chinese domestic consumption and currency appreciation.

In fact, this decision is not a big deal. The currency adjustment is tiny and won't do enough to satisfy enormous foreign policy pressure on the Chinese to aggressively revalue its non-convertible yuan currency. I'm really not sure what all the hoopla is about.

China decided to let the yuan float again after re-pegging the currency to the U.S. dollar amid the financial crisis two years ago. From 2005 until 2008, the Chinese currency gained about 12% based on a structured product created by investment banks or synthetic currency derivatives. Most retail investors can't even ride this trend with the exception of buying a few currency ETFs that don't even invest in the currency in the first place because it isn't even convertible.

There's no doubting that over the long-term China will emerge as the world's leading economic power. And if that forecast is right then its currency must become fully convertible and the U.S. dollar link must eventually end. At some point in the not too distant future, China will share a reserve currency role along with major and other emerging market economic powers. Gold and other commodities will also play a part as the next global exchange rate system is formed.

China's decision to let the yuan float more freely has set off a barrage of press coverage worldwide on expectations domestic consumption will get a big boost from a strengthening currency. Suddenly, the Chinese are expected to start boosting purchases of foreign goods because 12-month implied non-deliverable currency forwards on the yuan show a "massive" 3% rally – big deal! That's barely a dent in foreign exchange markets.

In reality, the Chinese yuan commenced a long-term bull market in July 2005 that will move in baby steps because anything more than small steps assures a severe correction of the local economy.

China can't handle rapid currency appreciation; unlike other exporting nations, the Chinese don't have labor flexibility or unemployment insurance to service those individuals out of work. And we're talking about hundreds of millions of people. A rapidly rising currency would do more harm than good to China and would also hurt the global economy because of the resultant decline in Chinese output and trade surpluses, which directly influence China's foreign bond purchases. But the United States Congress doesn't understand this important point and neither do European politicians – both urging China to aggressively let the yuan revalue.

Does this imply investors should ride the wave in Chinese currency reform and buy the yuan? Is there a profit play at hand?

I'm not particularly excited about the yuan. But I'm definitely bullish on all Asian currencies against the dollar and the EUR over the next decade because they are undervalued and generally home to big trade and budget surpluses. The Sovereign Society Asian Currency Portfolio is a great option available at Everbank and includes the Chinese currency in its basket composition. This product makes good sense for conservative currency investors.

The China story is definitely an exciting one but I'd rather buy Chinese stocks after a crash than ride the boring yuan appreciation story. Currency reform in China will be slow and no foreign power today can push the Chinese to do anything – especially the United States. China holds the cards and the West knows this.