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Chinese Currency Plunges To Peg Limit Against USDollar, Strongest Against Euro In 14 Years
The drop in the Yuan over the past 2 days is the largest against the USDollar since Nov 2008 as USDCNY nears its highest (CNY weakest) since mid-2012. What is more critical is that for the first time since the new 2% CNY peg bands, USDCNY is trading at the extremes - 11.5 handles cheap to the fix. At the opposite end of the spectrum, the EURCNY just dropped below 7.00 for the first time since June 2001 with the biggest 2-day strengthening of the Chinese currency against the Euro in almost 4 years. It appears the consequences of ECB QE, SNB volatility, and now Greek concerns continue to ripple through the rest of the world.. and at a time when China faces its ubiquitous new year liquidity squeeze, that is not a good sign.
Biggest 2-day drop in the Yuan against the USDollar since 2008
With USDNCY puishing against its 2% peg band for the first time...
As the Yuan shifts to its strongest against the Euro since 2001 (almost 2000) - back below 7.000
Charts: bloomberg
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Good. Stronger yuan, lower jobs, more riots. Bullish for regime change in China!
Ho Lee Puk. Sum Tin Won.
Expensive chinese crap.
That's gonna be a hard sale.
Strong dollar, weak euro is great for the renmenbi. China is loving it.
Phwoaaar!! unleash the paper hounds - gold just got bitchsmacked down
how does that work out for the Comex, now - 120 claims to the ounce?
Crisis!
The Europeans may have to pay more for a flat screen than us serfs in the U.S.!
Eur tu lo
Sum ting wong...that never gets old. Dialect jokes made Sony funding "Interview" possible.
The Dollar is king!
I been only long of gold and US dollars for some time now.
Saw this a comin'.
If y'all haunt the hallowed halls of The Hedge, wasn't a surprise.
After all, I still buy my pork chops in dollars.
The hedge for a dollar decline is the gold.
And while you're gettin' ready to puke, get them positive interest rates while y'all can.
Booyah!
We're living through the collateral damage, which is gonna be bigger than anybody sees, from one of the Biggest Black Swans of Decades.
The spiraling deflation caused by the pulling of the floor out from under oil prices.
The collateral damage in the midst of a Liquidity Trap (and thus the economies of the world non-responsive to monetary ease, by definition) to CapEx, employment, spending, saving, deficits (which just might be NARROWED BY NEGATIVE INTEREST RATES) have not yet been even considered. (The math, silly.)
Bunches y'all been wanting a mess. Just might not be the one you expected. Might just be a lot opposite common prognostication.
The social/political and economic implications of a deflationary spiral have not even yet been discussed.
Grab yer asses. Gonna be a strange new world unreal ride.
I can't get a handle on Investing in FX, and not sure I want to. Where do you do these trades, Charles Schwab?
So, you seem better able to invest, more skilled in investing. I'd guess you are saying that after tame European Decades & now Decades of Japan Stagnation... this was a straight line. Everyone is Devaluing their currency even China. Russia made gains on the fallen Ruble of course since 1991. So it looks like a Currency War whose purpose serves the Royals & European Elites in the past, but now China will benefit from good Infrastructure and a Wealthy Class.
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Repost:
Any advice is appreciated since I am not in the markets or an investor at this point.
Three Strategies from article(posted today on ZH by Reggie Middleton):
- Buy and sell currencies in the open market.
- Central banks can just talk rates down or up.
- banks can engage in quantitative easing (QE).
That is monetary expansion. But we have Fiscal Expansion too as a fourth way of effecting the price of our USD.
Clearly each administration most demonstrate it's power, status, success, and military-economic expertise. It must lead with ethics, morals, values & strength that everyone can see. This makes associations with Hollywood (R. Reagan) and gays (B. Obama) difficult with conservatives.
"The Impossible trinity" seems like "Gaslighting" Meme to me.
Where is money created out of thin air?
- Federal Spending
- FED Spending
- US State & National Banks
- Wall Street Banks, Shadow Banking, Fictitious Accounting
I Posit that Wall Street creates money out of this air and even manipulates the value of assets to rehypothicate in a Felonious & Systemic Scheme. in 20088-2009 we heard Wall Street was Rehypothicating at 40:1, an average no doubt, or a low number.
- What is the Truth?
- How Secure are the US Financial Markets?
- Do we have standard accounting & financial instruments?
- Is Fraud in Finance Vigorously Pursued?
Who tracks where money is created? Where are the Reports on where the money goes, who ends up with the assets of loans, how much of loans or rehypothication adds to the economy, to jobs, to quality money activity, to enhancing our fiat, to adding value to the US Dollar, and to enabling our people and adding wealth to our retirements for the middle class...?
"Convince the taxpayer that 13 billion for an aircraft carrier to fight the Taliban with" seems like how most are doing it these days.
So of course follow it up with a war against Russia!
Had to look this up. Hard to imagine what $1 Billion looks like. During the first Gulf War I heard the initial cost to overhaul M1 Abrams Tanks was over $1 Million Dollars. And that was for undamaged Tanks. Later I tried to figure out the real cost of an M1 Abrams, but didn't think the numbers were high enough. The Government can keep adding on Equipment to any Weapon that can drive, fly, or float. Plus they keep development going all the time which takes money but is not really added in to the cost shown on the internet.
Looks like it is hard to get the real cost for Aircraft Carriers on the Internet too.
- M1 Abrams Tank, US$6.21 million (M1A2 / FY99)[3] Estimated in 2012 as US$8.58 million (with inflation adjustment)
- Nimitz class aircraft carriers are the largest warships in the world, each ... Unit Cost: About $8.5 billion in constant year FY 12 dollars.
- Gerald R. Ford class will be the future aircraft Carrier, The total acquisition cost of the CVN 21 is expected to be $11.7bn
-
We spend $6.5 Trillion easy from 2002-2014 in DoD Direct Military Spending without costs for DHS, Spy Agencies, International Assistance, Veterans Administration
So with $18.1 Trillion in Federal Debt, Current Military Costs of at least $850 Billion or $900 Billion... any War year would be $1 Trillion per year (for Sure, no bull).
The problem with Planning a war is Rumsfeld, Cheney, Neo-Cons never want to reveal the clean up costs. They also can't reveal which wars we are prepared for and which ones we aren't ready for. Are we ready for a European Style Garrison War with Divisions of Tanks, 1000s of Aircraft, Millions of men?
I don't think we are ready for major war. Plus Major War Cost would be what? $600 Billion a year on top of the $900 Billion in Base Level Funding...
- we are at $18.1 Trillion now looking at $20 Trillion without War
Teeth - you asking for investment advice? My advice: dont invest. Dont seek profit. dont weigh 'opportunities' of x% vs y%.
Assetts are going to see-saw up and down like yoyos, the timing of which is utterly arbitrary
there are no markets anymore, there is only the collapse of markets. you put your capital where it is safest, and you constantly reassess its 'safeness', until the fucker is totally burnt to ashes
then - and only if both capitalism and the democratic republic is restored - then you may start looking to compare 'investment opportunities'
Thanks. I agree. Markets are fixed and valuations are illusions provided by salesmen and thespians. There is no way to tell values these days. I got into it a while back sort of knowing it was a game that everyone was in on. Unfortunately I got too confident like everyone else.
Probably I would hate FX anyway especially even when wide swings are where the money is made since we can't tell when to get in (buy).
The other things is Small Cap companies get hit hard just to slam them when things like Obama gets re-elected. No one should ever buy small cap company stocks since they are subject to attacks at random.
I agree with you. There is no price discovery. Maybe it was always an illusion to begin with. All time highs. Time to see it collapse.
Yeah the king of terrorism, slavery, and lies
The Yuan can't move far enough against the dollar to keep up with the weakness in the Euro. If it could, it would be falling almost as much against the dollar as the Euro is.
Hey Chi-na! HotPotatoThinkFast!!
The Dollar is so strong because we have great productive capacity, a strong work ethic, solid infrastructure, and the rule-of-law in our markets and communities.
Oh wait...
The massive amount of debt incurred woe these many years has been predicated on "the sheeple" being fully invested and well frankly...OBVIOUSLY..this has not been the case.
To the extent folks have been invested in the 666 rally more than likely they have LOST money. Just look at the flow of funds so dutifully reported by ZH woe these many years...folks simply were not invested PERIOD.
Sure...the rhetoric of "Time to Turn the Page" sounds good...the fact remains we got race riots, crime is out of control, war with Russia, the collapse of the EZ...you name it.
We've turned the page into a NIGHTMARE in my view.
First blow ups have appeared in the "re-insurrance" market. Simply put "there have not been enough accidents" woe these many years.
Sounds kinda weird doesn't it.
We've just cracked the book open.
Woo-hoo! Accidents galore!
Can't wait!
"Real page turner!"
When you really look at this shit, none of it makes sense. It is all one big illusion usually one owner trying to fuck another since they don't seem to play well together in the 21st century.
What currency war?
Euro Draghing on your Yuan?
Best Vancouver real estate all bought up by Shenzen princeling weenies?
Call 1-800-1Yellen, yes, 1-800-1Yellen.
New York real estate trusts and confidenciality are just a call away...
Tell 'em Jamie Dimon sent ya and get free pair of Obama presidential cufflinks with every $50m laudered.
As I've been saying, The Danse Macabre of the Currencies Has Begun.
Again.
Yuan be nimble yuan be quick Yuan jump down to the dollar stick.
The Eurozone is China's biggest trade partner. Not Seppoville.
Nobody else exists let alone matters to the Seppovillians
Its all coming together now, in time you will realize the brilliance of the central planners actions as the world collapses around the US leaving us the sole survivor, I think Yellen put it best at her last conference when she said " http://youtu.be/-VHTjGHsDHs "
no one will need a dollar after 2 years
It is not the Size of the Dollar in the Fight...
- It is the Fight In US Bankers OR European Bankers
I'm not sure if the dollar is going to fade, but seems to me that with Dollar Expansion the dollar must loss World Reserve Currency Status and lose 30% of Value.
These ups & Downs don't matter when the Nations all Spend & Create Fiat Exponentially... without Reporting Requirements.
Yellen better be getin her rotory wing certification soon
Hmmmm. 7 to 6 versus 11 to six.
So the euro has lost half its value to the Yuan.
Good thing they're not making the same stuff!
So is this the point where I start buying to real cheap European stuff?
Or maybe the Japanese stuff.
Or the Canadian stuff?
Thank God commodities have held up well!
I mean, thank God real estate is still going through the roof!
No, wait. I mean....thank God yield hungry investing is no longer going on!
No, wait...
No, wait...
All over except for the waiting it seems.
War with Russia it is then!
China historically, at least lately, has had to buy USD and sell CNY to maintain the peg, as not doing this would allow CNY to appreciate against the USD.
Now what do they do, sell USD dollars and buy moar gold?
If they want to maintain the peg, they'd have to sell dollars and buy their own currency. If they let the yuan weaken however, it would make their exports cheaper. That might be a backdoor way to stimulate their economy without having to inject monetary stimulus.
Right. It's my understanding that they just did a sort of back door stimulus last week by virtually doubling the pay of 39 million government employees.
I don't see them weakening it anymore as their serfs still have to buy food...can't have a revolution right now.
OR... Foxconn can export from Taiwan at cheep cheep cheep Taiwan dollar which fell vs. the Yuan. It's no big deal. And now Shanghai and Hong Kong exchanges are linked, and since Remnimbis are showing up in Swiss banks and Toronto - they're becoming more pivotable. Russia's probably hedged in Francs.
Mrs. Wantanabe loves those AUD when PM Abe speaks. If the US leaders were even trying to set US Citizens up for success in the global markets- we'd at least see a tax break for hedging our oil purchases with OPEC's Basket of Currencies, Indonesia Rupiahs? We could export from Mexico, let the Cayman dollar float for once then hedge our purchasing power in the Cayman Dollar.
But the boomer voting majority didn't think of that. It's too hard.
This is why I laugh at monetary policy as a "economic recovery" when fiscal policies would actually fix things. And by that I mean tax cuts... but nevermind. The Three Stooges (Clinton, Bush and Obama) are hedging their purchasing power by tossing chemical cocktails at their brains while sending young adults to more wars.
Everyone is fleeing the sinking ships. Better to puke now and live than to not puke and die.
China is doing this on purpose - if they kept a peg to a strong dollar they would have trouble competing with Germany and their own economy would slow as exports drop.
They've been investing massively in Europe actually.
Those investments are now worth MUCH less.
In the meantime all those treasuries everyone has been selling....
How much gold does China really have, and how much more is available on the open market for them to accumulate?
I'm thinking zero...but I could be wrong.
If the SNB has 800 billion euros...how about China or Russia?
We KNOW Putin has been buying gold...
Ya, you're wrong.
So who's been buying all those "paper promises" then?
Certainly no one here.
China is buying nat gas from Russia who has just given them a discount with a devalued Ruble. Meanwhile Russia has probably hedged in Francs.
http://ftalphaville.ft.com/2015/01/15/2090352/the-snb-and-the-russiaoil-...
https://www.bullionvault.com/gold-news/franc-gold-011620152
So if the Euro is cheap, does China start hoarding Euro assets?
Things are getting interesting enough I'm having a hard time keeping up... just like late 2008.
They're going to have to bait Russia in the Ukraine harder, faster, or people are going to start noticing the fucked economy is getting fucked-er rapidly.
I still think it's 2016-2018 for the shitshow, but damn if things like this don't make me wonder if the main event has started.
Ahh fuck it...I'm gonna "go meet that Asian lady I deserve".
Lot of fucking peg limits going around these days. I'm so glad the recovery is finally taking hold. Shiiiitttttttt
Price for the unraveling of the fiat regime. But the physical gold in possession will more than compensate for any short to medium term loses. If they planned like the conventional wall st. hedge fund, by the quarter, they would be running around like headless chickens.
No, as they say no pain no gain!