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China “Weaponizes Yuan” – Weakens Fix By Most Since 2016
China “Weaponizes Yuan” – Weakens Fix By Most Since 2016 On the heels of its ‘stealthy’ easing.. and not so stealthy: In the past 48 hours China has: – Cut its 7-day Treasury rate by 103bps – Launched quasi QE – told banks to flood the system with liquidity – Sent the Yuan tumbling – Warned […]
Has the PBoC deliberately weakened CNY as part of the trade war?
Has the PBoC deliberately weakened CNY as part of the trade war? It has been another trade war week, as the market has been looking for clues on the Chinese retaliation measures against the Trump tariffs that are planned to go live on 6 July. Global trade momentum started to weaken even before the trade […]
Deflation Is Blowing In On An Eastern Trade Wind
Deflation Is Blowing In On An Eastern Trade Wind Jack Delano “Lower Manhattan seen from the S.S. Coamo leaving New York.” 1941 Brexit is nowhere near the biggest challenge to western economies. And not just because it has devolved into a two-bit theater piece. Though we should not forget the value of that development: it lays bare […]
Hugh Hendry: “If China Devalues By 20% The World Is Over, Everything Hits A Wall”
Hugh Hendry: “If China Devalues By 20% The World Is Over, Everything Hits A Wall” Once upon a time Hugh Hendry was one of the world’s most prominent financial skeptics, arguing with anyone who would listen that the status quo is doomed and that central planning will never work. Most famously, back in 2010 during a BBC […]
New Rules for the Monetary Game
New Rules for the Monetary Game NEW DELHI – Our world is facing an increasingly dangerous situation. Both advanced and emerging economies need to grow in order to ease domestic political tensions. And yet few are. If governments respond by enacting policies that divert growth from other countries, this “beggar my neighbor” tactic will simply […]
Is China About To Drop A Devaluation Bomb?
Is China About To Drop A Devaluation Bomb? Though she had no intention of being funny, we laughed out loud, as undoubtedly many did with us, when incumbent and wannabe IMF head Christine Lagarde said last week in Davos that China has a communication issue. Of course, Lagarde knows full well that Beijing has much […]
Bank of Canada Crushes Loonie, Creates Mother of All Shorts
Bank of Canada Crushes Loonie, Creates Mother of All Shorts Clear winners: rich Chinese who buy homes in Canada. The Canadian dollar swooned 1% against the US dollar on Friday, to US$0.7270, after having gotten hammered for the past six of seven trading days. It’s down 5% in November so far, 15.5% year-to-date, and 31% from its […]
Deleveraging as a Biblical Plague
Deleveraging as a Biblical Plague Eventful days in the middle of summer. Just as the Greek Pandora’s box appears to be closing for the holidays (but we know what happens once it’s open), and Europe’s ultra-slim remnants of democracy erode into the sunset, China moves in with a one-off but then super-cubed renminbi devaluation. And […]
Currency Devaluation: The Crushing Vice of Price
Currency Devaluation: The Crushing Vice of Price Devaluation has a negative consequence few mention: the cost of imports skyrockets. When stagnation grabs exporting nations by the throat, the universal solution offered is devalue your currency to boost exports. As a currency loses purchasing power relative to the currencies of trading partners, exported goods and services become cheaper […]
The Currency Illusion
The Currency Illusion QUESTION: I want to share a true story with you. My father as a young boy in Greece saw what gold did for his family. My grandfather in Greece in the late 30′s and 40′s saw the rapid devaluation happening to the drachma. English sovereigns were plentiful there at the time as a […]
