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What China's Devaluation Means For The Future Of The Dollar

Tyler Durden's picture




 

Submitted by Simon Black via SovereignMan.com,

As the saying goes, “Fool me once, shame on you. Fool me twice, shame on me.”

(… to which George W. Bush famously added after flubbing the aphorism on live TV, “can’t fool me again!”)

For months, despite every shred of data pointing to a weaker economy, China’s currency has been strengthening.

This was really counterintuitive. When an economy is weak, its currency tends to suffer.

But that didn’t happen in China.

Even when China’s stock market suffered one of the biggest crashes in history a few weeks ago, the currency barely moved.

None of this made any sense.

Just look at Greece– problems in that single nation, one of the smallest economies in Europe, dragged down the currency used by 18 other nations in Europe to its lowest level in more than a decade.

But when problems broke in China, the renminbi actually got stronger. And party bosses insisted that they would not devalue their currency.

Fool me once.

Yesterday they showed the world what their promises really mean: nothing. And in a surprise announcement, they devalued the renminbi by roughly 2%.

2% might not sound like very much. But in currency markets, especially for a major one like China’s, 2% is a huge move.

Curiously, in the very same announcement, Chinese officials stated that they would not devalue the currency again, and that Tuesday’s move was a one-time thing.

Fool me twice.

Less than 24-hours later they did it again — a second devaluation that saw the renminbi tumble to as low as 6.57 per US dollar, a 6% decline in roughly 36 hours.

Again, this is a steep drop for a currency, and I expect that there’s more to come.

All of this raises an interesting question about the future of the US dollar.

Because if an economy as large and powerful as China’s has had to concede defeat, does this mean that “King Dollar” will rule forever?

No chance.

Remember that the dollar’s strength is derived from its status as the primary global reserve currency.

Nearly every government, commercial bank, and central bank in the world holds US dollars in reserve, and the dollar is used as the primary currency in global trade.

Whether in Saudi Arabia or South Africa, a barrel of oil is priced in US dollars. Even jets manufactured in France and sold to European airlines are priced in US dollars.

But this status is by no means written in stone. The US dollar is not the first global reserve currency, and it won’t be the last.

We can go back in time to the Byzantine solidus, or the Venetian gold ducat, or the Spanish dollar, or the British pound, and see that no reserve currency lasts forever.

Especially when its fundamentals are so poor.

The US government is insolvent. Its major institutions and pension funds are insolvent. The central bank is borderline insolvent.

These are not any wild assertions; their own financial statements admit their insolvency.

Which means that there’s nothing underpinning the dollar’s reserve status except confidence.

And confidence is very fickle. Like a high school popularity contest, it wanes and it booms.

Right now that confidence is on an upswing, primarily because every other major option looks really bad.

The euro is acting out its Oedipal complex. Japan is a complete fiscal disaster spending over 25% of tax revenue just to pay interest. And China is rapidly deteriorating.

Sure there are some outliers like the Swiss franc that are in better shape. But the market for Switzerland’s currency is far too small to absorb trillions of dollars in global capital flows.

In the beauty pageant of major currencies, the US dollar is clearly the least ugly at the moment.

And I think anyone owning dollars should look at this as a gift.

Right now we have a tremendous opportunity to sell what’s expensive and buy what’s cheap.

The dollar hasn’t been this expensive in years. And many non-dollar assets haven’t been this cheap… ever.

Here in Turkey, the lira is at its lowest level in history. The South African rand is at its lowest level in history. We wrote about Indonesia’s rupiah on Monday.

I’m looking at real estate in Colombia at the moment where US dollar buyers can pick up high quality property for less than the cost of construction.

In Chile, the cheap exchange rate and slowing economy helped our fund to recently close on a farm at $4.3 million that cost $10 million less than two years ago.

In Australia there are a number of junior mining stocks that are trading for less than the amount of cash that they have in the bank.

There are countless deals like this all over the world… especially if you’re buying in US dollars.

It’s foolish to expect that any reserve currency will last forever.

And it’s even crazier to expect a reserve currency with such pitiful fundamentals as the US dollar to last forever.

But markets are not orderly and efficient. They are chaotic.

Which means that, on rare occasions, enormous opportunities present themselves to buy high quality assets on the cheap.

That opportunity is now.

 

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Thu, 08/13/2015 - 17:51 | 6423846 Publicus
Publicus's picture

Yes, King dollar will rule forever until China learns to print money to fund jobs and startups directly, thereby creating a consumer base.

 

This should not take long as the Chinese are out of the box thinkers.

Thu, 08/13/2015 - 18:26 | 6423867 Captain Debtcrash
Captain Debtcrash's picture

Anyone who doesn't question the theory that China is going to take over during the upcoming monetary shift is fooling themselves.   There will be pain for everyone but I don't see a huge shakeup nation wise at the top of the economic food chain.  Japan is probably going to drop more pegs than anyone. 

Now to address the first points of the article; if a financialised country has a crisis that doesn't directly relate to the currency, generally the currency goes up while people sell risk assets.  I can't believe I actually have to type this but the selling pressure from those risk assets is demand for the currency.  This may be temporary, like the dollar going up during the financial crisis, but the yuan going up during a stock market crash makes perfect sense. 

I agree the dollar as it currently exists will fail before too long. Unfortunately that doesn't mean that what replaces it won't be controlled by the US. 

Thu, 08/13/2015 - 18:47 | 6424038 Hyjinx
Hyjinx's picture

Yup.  Nothing screams confidence and transparency like the Chinese - clearly better than us! /sarc

Thu, 08/13/2015 - 18:50 | 6424051 BigJim
BigJim's picture

 Which means that there’s nothing underpinning the dollar’s reserve status except confidence.

Er, no, what underpins the USD is the fact that any (non-nuke) oil exporting country that stops demanding it in exchange for oil will face regime change.

All those carrier groups aren't for making the world "safe", you know.

Thu, 08/13/2015 - 19:20 | 6424171 runningman18
runningman18's picture

The U.S. military is on the decline and numerous other countries have similar technologies.  Foreign nations are not worried about the U.S. militarily.  Also, the central banks and globalists will crash the dollar whenever they see fit to do so in order to make way for their one world currency.  The whole idea that the dollar will retain world reserve status because of our big guns is nonsense.  Our big guns cannot stop a dollar collapse. 

Fri, 08/14/2015 - 06:35 | 6425285 fx
fx's picture

'Mighty' germany behaves like a vasall of the U.S., allowing US troops and intelligence to use german territory for whatever they want to carry out there, including spying on german govt, on german corporations and  of course the German people. It succumbs to any sanctions requests y uncle sam whenever they come. But yeah, nobody fears the Us military, obviously... LOL

Thu, 08/13/2015 - 18:56 | 6424085 lasvegaspersona
lasvegaspersona's picture

I don't think the next global reserve currency...will be a currency.

When the dollar finally gives it up I suspect the world will return to gold; not to a gold standard wherein countries promise a price at which to buy and sell gold, but as a reserve held at market value.

The Euro already does this.

The one big country that has zippo real gold in their CB is the USA. Other countries can just add gold, the dollar will have to go away and the USA will need a new currency. If the US tries to defend the current dollar with gold it will all be used up the first day.

Thu, 08/13/2015 - 19:04 | 6424117 Vlad the Inhaler
Vlad the Inhaler's picture

No, the new reserve currency will be the Big D, which stands for pure unadultered DEBT.

Thu, 08/13/2015 - 19:37 | 6424220 CPL
CPL's picture

It can be done but it would require everyone to take the leap at the same time though.  All the tools are here today to do it.  Only thing missing is will and the plan.  So we all wait longer until people are sick of it and want to change it, or they are just gone.  Free will and all that jazz.

Thu, 08/13/2015 - 19:37 | 6424225 SuperVinci
SuperVinci's picture

quit it craptain

Thu, 08/13/2015 - 19:33 | 6424213 CPL
CPL's picture

Yeah, you'll all be using nice agnostic BitCoins with no religious symbols or nonsense stamped on them since gold and silver haven't got a hope in hell at helping manage or sustain a supply chain as complex as earth.  Eventually you'll all understand how to share by using it.  Think of it like training wheels on how a real global economy works wtihout influence and 'gasp' money operating as currency and not a weapon.  Unfortunately everyone is so fucked up and ass backwards on the matter of how to act in governance of a planet and it's resources, this is the medicine to fix fiat junkies and correct issues without too much pain.  Depending on how things are moved into proper prioritiization, might even be able to save the pensions if everyone gets their thumbs out of their asses while they catch their breath instead of being stuck in a reactive mode of herd behavior.

Gold and silver isn't going to help anyone here at all.  The issue is scale, not money.  Scale has rendered both worthless on a planet with a bafflingly complex supply chain.  Money is just a distraction to the work.  Only thing that really matters at the end of the day to keep food on plates, lights on and clothes on backs is energy.  Now how to manage that.  Depends how fast GE pulls the thumb out of their ass on that Intellectual property they've been buying and hiding for a century because one way or another that vault is going to be opened.

In that vault btw is energy independence.

Thu, 08/13/2015 - 21:13 | 6424569 Pickleton
Pickleton's picture

So if I understand you correctly, gold and silver are bullshit because of scale and the world's complex supply chain, but bitcoin is the answer and it's not fiat.  And somehow bitcoin has scale that gold and silver don't?

 

 

 

 

 

 

Thu, 08/13/2015 - 22:16 | 6424766 TheEndIsNear
TheEndIsNear's picture

"Depends how fast GE pulls the thumb out of their ass on that Intellectual property they've been buying and hiding for a century because one way or another that vault is going to be opened. In that vault btw is energy independence."

 

So what sort of "Free Energy" pseudo-device do you think GE has that violates the first and second laws of thermodynamics?

Fri, 08/14/2015 - 00:53 | 6425022 Hugh_Jorgan
Hugh_Jorgan's picture

Keep working on it. You almost understand some of this.

It seems like you've missed the fact that Gold and Silver have intrinsic value, they are REAL MONEY. Something that Bitcoin can never have. Bitcoin becomes worthless when the electricity goes away. Take my word for it, in the near future you will want to have your riches and resources in hand. Start with silver and get some steel jacketed lead so you can at least try to keep what is yours.

Thu, 08/13/2015 - 19:01 | 6424106 Max Steel
Max Steel's picture

Just stoo peddling your crap here. There wont going to be any global currency which again usa will control. THE WRITER of your article is a sheee lunatic . A wannab thinks american xceptiinalism is indelible. Oh! Btw China has come up at par with usa in most of economic indicators. So keep believing in your delusional crappy articles.

Thu, 08/13/2015 - 19:36 | 6424219 SuperVinci
SuperVinci's picture

quit pimpin yourself you cog dis wannabe.

Thu, 08/13/2015 - 21:16 | 6424581 Pickleton
Pickleton's picture

Good grief dude, if you're gonna whine about others, at least try to be literate while you do it.  Your writing makes you sound like an utter cretin.

 

Thu, 08/13/2015 - 19:35 | 6424216 SuperVinci
SuperVinci's picture

quit pimpin yourself you cog dis wannabe.

Fri, 08/14/2015 - 14:01 | 6426670 malek
malek's picture

 There will be pain for everyone but I don't see a huge shakeup nation wise at the top of the economic food chain.

I'm sure there were a lot of "educated" people saying similar things inside the UK in the 1920's.

Thu, 08/13/2015 - 17:59 | 6423887 thesonandheir
thesonandheir's picture

I for one welcome our new Chinese overlords.

Thu, 08/13/2015 - 18:02 | 6423893 LawsofPhysics
LawsofPhysics's picture

The Chinese invented paper money for fucks sake.

Fri, 08/14/2015 - 00:37 | 6424999 Hugh_Jorgan
Hugh_Jorgan's picture

"This should not take long as the Chinese are out of the box thinkers"

Seriously? Which Chinese are those? The ones that invented gunpowder 2000 years ago? The Chinese today are great at rapid copying and theft of intellectual property and little else. They have been stealing moves from the corrupt Western world's playbook for several decades now.

So, I guess I agree with your original thought, just not the reason why...

Thu, 08/13/2015 - 17:53 | 6423863 alexcojones
alexcojones's picture

I wish dollars came in other pretty colors than green.

Brazil had so many different colors and they made new different ones all the time.

Damn Greenbacks

Thu, 08/13/2015 - 19:00 | 6424105 negative rates
negative rates's picture

It's the last of the colors for true money, oh you can pretty up the #'s to keep people employed.

Thu, 08/13/2015 - 21:17 | 6424584 Pickleton
Pickleton's picture

Have you seen the new hundreds?  They're blue.

Thu, 08/13/2015 - 17:55 | 6423871 Peter Pan
Peter Pan's picture

The way the world is blowing up its cash to make ends meet or to bail itself out, i somehow suspect that we will see reserves keep on shrinling to the point that very little will be kept as paper.

Thu, 08/13/2015 - 17:57 | 6423878 beaker
beaker's picture

Well reading that was a waste of 5 minutes of my life.  WTF

Thu, 08/13/2015 - 18:05 | 6423901 Tall Tom
Tall Tom's picture

That took you five minutes to read that?

 

Wow.

Thu, 08/13/2015 - 21:36 | 6424638 Clever Name
Clever Name's picture

All I needed to see was 'Simon Black' to know where it was going...

Thu, 08/13/2015 - 22:48 | 6424845 greyghost
greyghost's picture

SIMON SAYS.........i are bullshit. posted from the plains of tibet, simon says dali llama knows his shit

Thu, 08/13/2015 - 18:03 | 6423895 romario
romario's picture

I'm not so sure, what if this the century of the dollar? Since 2000 it's crash after crash, each time the dollar got stronger if you think about it, and now we are at this gridlock, with the S&P500 at record highs and the dollar really "trumping" other currencies... 

What if the S&P500 joins in on the global stocks meltdown and the dollar gets even stronger? 

What is more likely, this scenario or that global stocks (like Brazil, Russia, Mexico, Italy) catch up to the S&P500 rally and make multi year highs as well, while the dollar loses value?

This is the million dollar question.

Thu, 08/13/2015 - 18:05 | 6423899 arbwhore
arbwhore's picture

The dollar has been falling wrt other currencies since 1985. This "devaluation" is but a blip on the Yuan's road.

Thu, 08/13/2015 - 18:08 | 6423913 romario
romario's picture

Yes, but since 2000 there were loads of moments when the dollar got really strong. Actually began in 1997 with the asian crisis. Maybe the 21st century is the dollar century. Maybe not.

Thu, 08/13/2015 - 18:14 | 6423928 arbwhore
arbwhore's picture

No. The dollar's days as a reserve currency are soon over, just like all the ones before it.

Thu, 08/13/2015 - 21:02 | 6424539 neuronius
neuronius's picture

No, the 20th Century was the century of the dollar.

 

Thu, 08/13/2015 - 21:22 | 6424591 Pickleton
Pickleton's picture

Mmm, no.  It's not so much the dollar's strength as it is the weakness in demand for those other currencies.  They're all sliding down the same slide of failure.  The dollar's century is past. 

Thu, 08/13/2015 - 18:29 | 6423980 logicalman
logicalman's picture

The strength of fiat is determined by the size of the military backing it.

China should do well in that regard, eventually.

Why the hell would anyone use it if not for legal tender laws?

Trouble is too few have a clue.

 

 

Thu, 08/13/2015 - 18:41 | 6424022 Not My Real Name
Not My Real Name's picture

The strength of fiat is determined by the size of the military backing it

You've got it backwards: The size of any military is determined by the strength of the fiat that is backing it. 

 

Thu, 08/13/2015 - 21:26 | 6424603 Pickleton
Pickleton's picture

Huh?  Unless you're just talking about their ability to throw massive numbers of machine gun bullet catchers at their enemy, China cant even design an aircraft carrier.  Their strength is only in their theft from others.

Thu, 08/13/2015 - 18:29 | 6423984 coast
coast's picture

I dont think people understand the underlying situations especially with the chinese....THey have stacked god only knows how much gold, so when the soon to come global monetary reset comes, backed with an unknown percentage with gold, they will be set to take the lead in the world currency.  In my opinion, this was the plan all along.

Thu, 08/13/2015 - 18:49 | 6424050 Hyjinx
Hyjinx's picture

If their currency is too strong their export economy dies.  Why would they do that?

Thu, 08/13/2015 - 21:08 | 6424555 laomei
laomei's picture

they buy up all assets of any worth

Thu, 08/13/2015 - 20:25 | 6424390 withglee
withglee's picture

...THey have stacked god only knows how much gold,

 

We know it's less than 1oz per person on Earth, so in light of the whole scheme of things, it is irrelevant.

Thu, 08/13/2015 - 18:38 | 6424014 NorthernPike
NorthernPike's picture

I hope we start hearing about the soon to come end of the dollar as the reserve currency and how gold will be one million dollars per ounce shortly, how the crafty Orientiels can now while away the next several centuries without worry or care because of all the physical assets they have. I have charts for each of these scenarios in three dimensional graphics using new software called EXHELLHope.

Thu, 08/13/2015 - 19:11 | 6424140 Miggy
Miggy's picture

Yeah I don't get it. If king dollar looks good right now but with pitiful fundamentals what does that say about everybody else?

 

John 3:16

 

Thu, 08/13/2015 - 19:23 | 6424181 kchrisc
kchrisc's picture

The dollar is up on "exit."

As a result, the Zionist fifth-element and colonizers of the American country are loving it, as it makes it easier for them to buoy the dollar as they exit back to Europe.

Zion and their bankster plunders need to try to control price-inflation a bit longer as they "exit." So a higher dollar, coupled with cheaper goods from overseas, is just what they ordered.

Look for the noiZ-media to soon start focusing on how "cheap" things, not food, are. "One can get a whole dinner set from Walmart or Amazon for 15% less than last year..." "While food prices are up, because of all of the farm disease outbreaks [That seem to only strike the DC -US], outfitting and furnishing your home is so much cheaper from a year ago..."

Watch the FedRes further the dollar's rise, and Zion's exit, with a rate increase this Fall or Winter, as they would rather engineer a collapse that they can profit from, and then later replace the dollar with SDRs.

Liberty is a demand. Tyranny is submission..

Thu, 08/13/2015 - 20:05 | 6424315 coast
coast's picture

Hey kc..I made this video about 5 years ago, but most of it is still relevant...It was banned on youtube so I put it on vimeo...steely dan music and david dees illustrations.  It took me hours to make it.  Hope you like it.

https://vimeo.com/60685715

Thu, 08/13/2015 - 20:46 | 6424463 Sorry_about_Dresden
Sorry_about_Dresden's picture

Very nice! Thanks!

Thu, 08/13/2015 - 23:51 | 6424949 kchrisc
kchrisc's picture

Awesome.

You should keep at making video like this.

Liberty is a demand. Tyranny is submission.

Thu, 08/13/2015 - 19:29 | 6424202 are we there yet
are we there yet's picture

Every country is their own worst enimy.

Thu, 08/13/2015 - 20:20 | 6424373 withglee
withglee's picture

. The central bank is borderline insolvent.

"Borderline"? When was the central bank ever solvent?

Thu, 08/13/2015 - 20:49 | 6424485 I Eat Your Dingos
I Eat Your Dingos's picture

Its good to be an American living outside of the US. For example, Canada and Mexico is so cheap to live there if one is an American. An American taking US dollars in Canada would be 25% richer or less poorer. It sucks that prices for food, rentals, medicine, insurance, etc is still climbing and/or getting less of a service/good in quanity.

Thu, 08/13/2015 - 21:06 | 6424549 Sorry_about_Dresden
Sorry_about_Dresden's picture

I am trying to get on disability now, finalize the divorce with the monster I married (luckily she is waaaayyyyyy better than me) to get half of her 401k and go someplace I can get 18 yo hookers for the price of a Big Mac.

Work is for chumps!

Thu, 08/13/2015 - 20:58 | 6424520 luna_man
luna_man's picture

 

 

Talkin about high quality assets on the cheap...Gold, hasn't been one for me yet!

 

maybe one ounce the month

Thu, 08/13/2015 - 21:01 | 6424524 Sorry_about_Dresden
Sorry_about_Dresden's picture

No one seems to see the obvious:

China owns $1.3 trillion (?) in UST debt.

China has, since the late 1990's, diverted 50% of the foreign FX into UST Debt; for 20 years!!!!!!!

The Chinese consumer has ZERO revolving debt and pays cash for everything.

This devaluation is a head fake by PBOC that ends the PEG w/ the USD.

How long , w/ the Chinese reminbi subject to market forces, will it take for the world to start piling in to Chinese currency?

I think the Chinese are going eat our lunch. The Chinese consumer is just recently emerged to feast on German trains, elevators, cars etc.; they have just gotten started. The next few years we will see them, finally, bury us while they take over the world.

Thu, 08/13/2015 - 21:32 | 6424622 MEFOBILLS
MEFOBILLS's picture

This article makes me sick.  Exchange rates of money is stupid hairless human monkey business.  

All foreign exchange is only barter.  Barter trade among nations is commodities and some services.  That foreign exchange is only barter is a non negotiable truth, and exchange rates ignore this truth.  Why do we humans walk around telling lies to ourselves.  Exchange rates are a whopper of a lie.  If you enjoy telling yourself untruths then go ahead, be a dumb ass .. walk around as a brain dead zombie.

A third unit, not money, but an accounting identity should allow goods exchange.  The best idea so far for this was the Bancor.  Keynes great idea, the bancor would have forced import/exports of  trading countrys to balance, and also would have led to balanced economies.  

The history of floating exchange rates is one of manipulation, bear raids, and full spectrum warfare.  

Using a strong dollar, which is built up by fake financial engineering, to then buy property and other goods cheap elsewhere, is stealing.  It is rental theft due to Casino gambling.  

Mexico has had its peso devaluated three times due to bear raids and other maneuverings by Wall Street financial class/bankers, especially Goldman Sachs.  This then turned that country into a shit- hole oligarchy, when it should be rich.   The bulk of Mexican population is forced to live off a small slice of the economy.  Exchange rates then, are part of the reason for America's mexinvasion.

Goods exchange is fairly constant, as iron ore, coal, pork bellies, and other commodities are produced fairly constantly.  Grains, milk powder, fruit juice..etc.  any number of things can be added to a basket and that basket then marks the value of a bancor.  The basket is nearly constant, as the sun comes down in a constant way, and things grow and are produced.

Note this is not money but an accounting scheme.  The Bancor then marks exchange.  

The value of the exchange is then an anchor, or something stable in value from year to year.  Some would put Gold in the basket....go ahead it is a commodity..  Don't put money in the basket though, only goods/commodities/services.

Sovereign currencies then will flux in relation to the Bancor.    No more financial games and rent schemes then, as one nation cannot easily and sneakily manipulate their currency for trade advantage. Any country that is mercantile then finds themselves with too many bancors, and as punishment they are taken away.  Trading countrys agree to the rules in advance.

Exchange rates and currency manipulations were baked into the cake when Dexter White (J) and his boss Morganthau (J) angled for a rate system at Bretton Woods.   They were wrong, and as usual, most of what the "tribe" promulgates is counter to the better instincts of humanity.

 They always aim their money power rifle square  at man's baser instincts, thus undermining any attempt at higher moral civilization.

White and his J cronies argued successfully that devastated countrys would need dollars after the war, so they could then buy American industrial goods to modernize.  Bull shit.  Countries could have been given so many Bancors to start out with, and then they could start trading.  If Countries wanted bi-lateral exchange outside of the system, then they could do that too.  In bilateral trade though, their money is only good bilaterally and likely will not find high acceptance thoughout the world. 

China has been a currency manipulator from the beginning, keeping the Yuan weak relative to the dollar.  This then allows the lifting of jobs from the West, and hence the knowledge and patrimony of past laboring generations is sold cheaply for wage abitrage today.

Stupid human monkeys worldwide are in thrall to money power; and money power agents are often  psychopaths - not the best examples to lead humanity.

Money trading for money are two abstractions exchanging for each other.  Worse, it is credit exchanging for credit, and credit is a doppleganger for money.  One would have to take acid and start hallucinating to invent a more stupid system than what is now driving mankind.

sovereignmoney.eu

Fri, 08/14/2015 - 00:47 | 6425012 Sorry_about_Dresden
Sorry_about_Dresden's picture

China has been a currency manipulator from the beginning, keeping the Yuan weak relative to the dollar.

Chinese Sovereign Wealth Fund rolled a full 50% of all Foreign FX back into UST Debt, for 20 years. Now they trade gold for Iran's oil, they already have a deal with Germany. A deal with Russia and Azerbaijan for Nat. Gas to feed North and South and coast. 

China has trade agreements with Germany for $50 billion/year, probably more. China is starting to spend that money before the US Central Bank meltdown. I've ridden sleek German bullet trains and really nice subway trains, good ol' Tyssen & Krupp escalators. I think China will, finally, eclipse the US with their growing GDP. You can see BMW all over China and Greece now. The Greeks can't afford the payments but the Chinese pay cash! Good market.

Their infrastructure needs for all that hi-tech German stainless steel is endless.

New Nat. Gas. Power Generation Stations to replace coal. China will frack eventually and use their massive reserves.

My savings took a hit for a few days but, I think everyone is going to be surprised. If the Chinese doesn't step up to these auctions, massive QE will ensue and those yields will have to go up.

Calling Paul Volker!!!! Paul Volker is needed in Jon Corzines office. 

 

Thu, 08/13/2015 - 23:51 | 6424947 JOHNLGALT
JOHNLGALT's picture

Real people know the difference between PET ROCKS and PET PAPER.  Anyone who is still holding  PET PAPER will get what they deserve for supporting the WORLD WIDE PONZI PAPER SCHEME (WWPPS), designed to enslave billions of people. The doors to get out of this enslavement are going to close very fast, once the U.S., Japanese, E.U., Chinese and every other citizen realizes that devaluation steals years of value from their savingsU.S. PONZI PAPER SCHEME, Japanese PONZI PAPER SCHEME, E.U. PONZI PAPER SCHEME, Chinese PONZI PAPER SCHEME, What's the difference?.  JOHNLGALT

Fri, 08/14/2015 - 00:23 | 6424991 Sorry_about_Dresden
Sorry_about_Dresden's picture
3 Month 0.10% +0.01 (11.11%) 6 Month 0.23% +0.01 (4.55%) 2 Year 0.71% +0.02 (2.90%) 5 Year 1.57% +0.01 (0.64%) 10 Year 2.19% +0.01 (0.46%) 30 Year 2.86% +0.01 (0.35%) Looks like UST yields will go ballistic if the Sovereign Wealth Management  stays out of the UST auction. This should get interesting. The music is about to stop; the tide is going out.
Fri, 08/14/2015 - 05:08 | 6425221 sirik
sirik's picture

"When an economy is weak, its currency tends to suffer."

Nope !

A currency with value it will hold  it if its backed up with gold or other goods.

If it is generated by  printing then it keeps its true value too..... nothing.

That has nothing to do with the state of a economy of a country.

 

 

"

Remember that the dollar’s strength is derived from its status as the primary global reserve currency.

Nearly every government, commercial bank, and central bank in the world holds US dollars in reserve, and the dollar is used as the primary currency in global trade.

Whether in Saudi Arabia or South Africa, a barrel of oil is priced in US dollars. Even jets manufactured in France and sold to European airlines are priced in US dollars."

 

Thanks to the US military. ( see khadaffi)

Fri, 08/14/2015 - 06:57 | 6425307 matagorda
matagorda's picture

If you believe in future $ weakness, no need to go overseas, just back up the truck for some E&P junk bonds.  Such a deal!

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