China Sends Fed A Warning: Devalues Yuan By Most In 2 Months

Tyler Durden's picture

With the USD Index stretching to its longest winning streak of the year, jawboned by numerous Fed speakers explaining how April is 'live' (and everyone misunderstood the dovishness of Yellen), it appears that The PBOC wanted to send a message to The Fed - Raise rates and we will unleash turmoil on your 'wealth creation' plan. Large unexpected Yuan drops have rippled through markets in recent months spoiling the party for many and tonight, by devaluing the Yuan fix by the most since January 7th, China made it clear that it really does not want The Fed to hike rates and cause a liquidity suck-out again.


The last 4 days have seen nearly a 1% devaluation in the Yuan fix with today's drop the biggest in over 2 months...


And while everyone is quietly commenting on how "stable" the Yuan has been this year, the truth is that is only the case against the USD, the Yuan basket has been consistently devaluing since PBOC admitted it was more focused on that than the USD only...


The last time they sent a message, The Fed rapidly acquiesced and decided a rate hike was inadvisable due to global market turmoil... we wonder what happens this time.

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jcaz's picture

LOL-  that's precious....

Casanova's picture
Casanova (not verified) jcaz Mar 23, 2016 10:01 PM

That's what happens when Money itself has become the Problem >>

Ghost of PartysOver's picture

Seems to me that Trump has it right.  Again.  He just does not get into the weeds as most on Main Street don't understand CB Finance and the manipulation that they enact.

y3maxx's picture

Time for an Archduke Ferdinand moment.

tarabel's picture



Sophie, live for the children.

Kirk2NCC1701's picture

Rx = Fed sends China a warning: "Trump!"

Still "ROR", China?

Money Counterfeiter's picture
Money Counterfeiter (not verified) y3maxx Mar 23, 2016 10:58 PM

Captain von Trapp monent.

Dragon HAwk's picture

Does this Mean Soros Won ? or is this a skirmish

roddy6667's picture

Not a BFD. When I first came to China in 2009 the rate was almost 8:1 RMB:USD. Things were fine then.

Now it is 6.5:1.  Things are fine now. Of course, you have to be here to know that. Reading Doom and Gloom porn on the other side of the planet wil make you think otherwise.


LetThemEatRand's picture

In which part of China are you residing?  Things are pretty fucking great here in the US if you live in Palo Alto or Seattle.   I hear that Canada is awesome too, for people living in Vancouver.

Thankfully, I read the other day that Seattle wants to ban safety nets outside of Chinese factories.  Because it would increase worker productivity.

zeropain's picture

all the boom cities are going bust.  calgary is a total mess cus of oil and vancouver property bubble is at critical level.  palo alto will be 2000 all over again.  unicorns will die in the credit default wave that is underway.  this is the last kiss good bye,  the FED engineered two warning to the market.  three strikes and your out.  or as elliot wave wankers would say P3 crash.  note both NQ and RUT underperformed on the wickid dead cat bounce.

roddy6667's picture

I live in Qingdao. Google it. The sea at the end of my street and the mountains behind me.I tutored my neighbor's daughter for her TOEFL exam and she got into grad school in Vancouver. Yes, life is good there.

Last year the wife and I took a 2000 mile trip by car with a Chinese friend all over northern China. There are many, many cities we visited that are very livable with affordable housing and everything you need. Everybody is better off than they were 10 or 20 years ago. The poor came th farthest. Nobody is hungry. The middle class is over 50% and growing, not shrinking. Household income goes up every year. It is easier to start and run a company and get rich here than in America. I have 2 nieces who were self-made millionaires (American money) before they were 30.

They don't need America's approval to have a good life. In fact, they don't care if Americans even know what goes on in China.

bunnyswanson's picture

The reason given for rude stares from Chinese given to foreigners in China is they have wanted nothing more to leave China and actually seeing people trying to get into their country causes them to be quite suspicious of the motives or the intelligence of anyone who would live in a polluted communistic sardine can.

roddy6667's picture

Hey Bunny. I bet you have never been near China. Where do you get your "facts" about China that are the basis for your strong feelings? Do your handlers give you talking points? Do you have a script you follow?

You are a Good Citizen. You believe what you are told to believe. You never question your government's motives. You never put yourself in a situation where you might learn something to contradict the propaganda you feed on. You are a Good Citizen.

Quoting YouTube as a source for a belief. Precious. Stay in your little world.

bunnyswanson's picture

I've seen and heard enough. And I had a Chinese room mate for several months who treated me as if I worked for her.

If you are interested

Here is the story which has left me with the impression there is little more than contempt under the surface of that hungry smile.

She married a Mormon (missionary in China),  Then, as agreed, she and he split but before she was ready to go her own way, he threw her out.   Her boss in Utah saw her crying in the break room and offered to help her, got her an apartment,  furnished it, and gave her a shoulder to cry on.  She could not understand why he fired her 3 months later because she refused to sleep with him.   She was truly baffled that he would expect that from her even though he was paying her rent.  So, she applied and was hired in my town, I needed room mate after losing a good job, and asked her in.  Within one week, she had used my address to start an export business and another export business in Utah was was a PO box,and then bid against each of them on presentations to her customers.  Found on a fucking client list from her new employer in my home town.  Pecans and Walnuts.  She did not insure her shipments.  I wanted her to move out as I felt uncomfortable under her gaze and was in new job at half the income so she was a distraction, calling when broken down, when she was stopped by a cop, wen she was in a rear end accident, she wanted to say he "backed up" because it would be his word against hers.  She was serious.  And this was a fender bender.  She put ad up in Match Mates or whatever and her photo was a lounging on bed on her back with head tilted provocatively, compete with red silk rob ? Hanfu white powered face, and hair tied together in a bun with a traditional Chinese look.  She was soon approached by the nicest man, a manager in his physician mother's office, went out on first date to a hotel and met him in a room, gave him oral sex, during which he photographed her with his cell phone.  Left before she woke up and never saw her again.  She was shocked when he did not call.  She would ask for advice or opinions from me on every move she made.  And when I would make suggestions and it did not turn out as she wished, she would hold me responsible, and be silent and gruff with me.  It was so fucking weird.  I gave her 30 days to move and she refused.  It took much effort to get her out of here.  Then, while packing, she lost her passport in her belonging but before she knew that, she called the police and told them I stole her passport.  Cops showed up and it was just because I have no record and a long history here that the cop decided the woman had just misplaced it (which she did, and contacted me to let me know, then sent LinkedIn request and wrote a note as if nothing had happened.  Something is wrong there.  She was educated and from the middle class (military officer - her father).  It's not socialized, it is how one treats a debtor, a disregard for other people beyond Chinese, though she was found of the Mexicans and felt a bond with them.  She was just a nasty person behind a lot of girly cutsy "how do I do this" ::giggles:: persona  


She displayed little regard for Americans and when I asked about Canadians, she said:  "Canadians, Americans...same thing"  She owns an apartment in a ghost city.  She told me it was not optional and that it is empty and has always been empty.  When I asked her why her parents would not move into it, she made a ghastly face and shuddered well saying, "they don't want to live there either."  This is not a friendly nation, the is a creditor nation, just like we are debtor nations.  Which would you prefer to be?  She walked and drove and moved around like she owned the place and the people around her were servants.  She would come home and slice and dice the office manager, and made an offer to owner that she would do his job for nothing if he would like to fire him because she thought he was ineffective.  That really happened.  After 2 days and no response, she actually re-approached owner (within 2 months of being hired) and again, clarified her offer to get rid of this 20 year or more long officer manager  whom she thought was watching her too closely.  He dismissed the idea as politely as one could.  Her mandarin was needed for the export arrangements.  California Salad Bowl.  She had an Indian man come to my house, he went into her bedroom and his wife was with him.  I heard the copy machine and no talking whatsoever.  I believe he was Indian from the wrap around his head. Hindu apparel on the woman who accompanied him, the center dark mark on forehead .  Very long time, and then they left silently.  This was a farmer from a nearby town with a grove of nuts I guess.  She had to underbid to get his business - did not place insurance on her shipments, know the dock manager and like did this from her cell phone on the way to the gym  (she took very good care of herself and was a very ambitious and hopeful young woman) It was just too blatantly in your face con job.  I reported her and she was fired and moved.  Sigh. 

OldPhart's picture

That lonely little girl is actually a hot little number.  Sadly, while I'd love to buy her a beer, my ass isn't going to China in the next week or so.

bunnyswanson's picture

That lonely little girl had a medical emergency just days after shooting the video.  Her room mate wrote a blog about it which you and others familiar with China may enjoy 

Morphine? What’s That?

the_narrator's picture

It's great to hear some on the ground real information.  I am really curious as to if there's a blog out there about crap going on in China that's not state propaganda but not western propaganda either.

I study the Chinese economy a lot and I tend to think sometimes that they've created a non-Bankster economic model that works.  Maybe in 10 or 20 years when they clean the pollution up, people will be moving to China.

OldPhart's picture

Not so sure that their model is working.

Have to admit, though, what they've accomplished since the 90's is amazing.  The equivalent of mud huts to space travel, wait, that's what it was.

As our close to three hundred year old society, and War Criminal Government, struggles to maintian dominance, I'm kinda putting my faith and backing on a society with 3,000 years of history.  Yes, they're have a similarly fucked up goobermint as ours. But the society aka social system, is inherently much more sophisticated, than our BLM and others, driven one is,

DontWorry's picture

Everything they accomplished since the 90s was at our expense, when they were granted MFN trading status.

kareninca's picture

I don't know a single Chinese person here in Silicon Valley who wants to go back to China.  And loads more are coming here every day.  If it's so great in China why are so many Chinese people so desperate to get out?  That's great (if it's true) that the most dire poverty is a thing of the past in China, but given that the place is one giant Superfund site, I'm not sure that the result will be increased overall life expectancy; probably the opposite.  This great new "wealth" is mainly feeding a giant diabetes epidemic.

My brother and SIL went there to adopt my niece seven years ago, and it was the most loathsome pit, full of mannerless and corrupt people, that they had ever encountered.  And they've traveled a lot.


buzzsaw99's picture

brought to us by the chinese ministry of propaganda. we're honored.

overmedicatedundersexed's picture

roddy, I think your are legit. and china is feeding it's people -and well,  that is remarkable.


LawsofPhysics's picture

So it would appear that we have started another "captain obvious" thread.

There are many good locations in China, America, Japan, Russia, Brazil, etc. etc.

If you are an owner of productive capital and have access to global fiat it is a great time to be alive.


Shed Boy's picture

I agree. No big deal. Probably a bigger deal that the Peso is 17 to 1 right now. When I was there in 1998 it was 7 to 1.

I like it here in China. Bought a 6 pack of beer last night, big bottles, made by a brewery thats been in business since 1900, for 12 yuan. Even with the "drastically depreciated yuan"....thats $1.85

Went and looked at a brand new 2 bedroom apartment a few days ago. $50,000 to live in a gated, luxury community. This is where I'll flee to when the shit hits the fan.

Arnold's picture

Good luck with that Shed Boy. Do you have your own well?

1.35 billion cockroaches that are not afraid of the light.

samjam7's picture

You literally don't want to be in China when SHTF. If a country has a long history of bloody civil wars and revolutions it is that place. But well, suit yourself. You can always have a last moment change of heart right. 

Enjoy eating chicken legs... 

roddy6667's picture

That beer came from Qingdao (Tsingtao) where I live. We spent $120,000 to buy and finish a home on the 18th floor in a very nice gated community. It sells for over $230,000 now. In other parts of the city you can buy an equivalent home for $100,000 now. Qingdao is an affluent city and prices are higher than aveerage. In a thousand cities across China you can buy a very nice home for 50 or 60 thousand.

There is no property tax. You just pay the utilities. We paid $280 or so for 150 days of heat this winter. Electricity, cable TV, and internet are very cheap.

Quebecguy's picture

I like it. Nice. (hey can you guys let the spot price go up just for a few days so I can.....)


We were missing mint- condition passports left at the scene today. maybe tomorrow. Tylers, can you show us that cartoon again??

gadzooks's picture

Looks Like a Rick &Morty moment, Happening in another Dimension.

UncleChopChop's picture

im not sure i agree to seeing it as a warning shot. a strengthening USD just means it costs-more and more to continue to defend the it seems reasonable to me that USD rally of last two days just caused them to exceed whatever they had budgeted for yuan-defense for today, and absent getting approval (yet again) to grow their forward-contract book (which seems to be how they are intervening) they had filled their quota and let it float down to current "equilibrium".


Quebecguy's picture

It would be like someone thinking taking hostages in Russia will work out well for them, they just dismiss the idea and go in another direction (Doh!). 

Atomizer's picture

Keep up devaluation you stupid cunts. Look at your debt treasury holding. You know, your Central Planning assholes that cannot find their way out of a wet paper bag. 

The shitheads will light a terrorist match or piss on the damp bag used for crisis actors. 

We need a idiot for 3 years. If you're a illegal immigrant and like to blow up economic markets, this job is for you. /sarc

The BIS seeks a Senior Network Engineer (100%), for Information Management Services at the BIS headquarters in Basel, Switzerland. Fixed-term for 3 years. Application deadline: 30 April 2016

23Mar/Senior Network Engineer (100%)


Sorry_about_Dresden's picture

That salary is tax free and you get diplomatic immunity with the job, they can't search your bag at airports. Just can't take the money back to the USA or they will hit you with a capital gains tax. 

If I could get that job? I wouldn't look back! 

Maybe I'll apply. 

Atomizer's picture

Don't, you'll become the livid issue of government parisite skanks. Hence the post.  

Arnold's picture

It is attractive to me in my down hill years.

I can do that Job.

(crib me on what a BIS is, do me a solid)

oh, Bank of International Settlements!

Hell now I am even qualified!

When I was let out of the battle, the attitude was that managers, manage.

They did not have to know anything about the business.

jm's picture

Highlights exactly what Trump is saying about free trade: free flow of goods, labor, and capital leads to the best outcomes, but not when the terms of the trade are manipulated via FX.  

What Trump doesn't realize is that he can't protect the treasury market while being a protectionist.


ebworthen's picture

Raise those damn rates!  6% Prime!

To Hell with China and their cheap labor!

Start paying savers and stop rewarding Wall Street!  Fuck 'em!

Atomizer's picture

$250,000 Silicon Valley wage to qualify for subsidized housing and the baby boomers are seeking reverse mortgage.

What could possibly go wrong under Chaircunt Federal Reserve person? 

Pheonyte's picture

6% my fucking sides ... that universe is long gone. Look at the shit fit a mere .25% caused.

rahtidmon's picture
rahtidmon (not verified) Pheonyte Mar 24, 2016 12:27 AM

6% would be a nucler (Bush) splosion in the Fanatcial Mawkets!

chinoslims's picture

How does a country pay back $20 trillion at 6%?  What would taxes look like?

strangeglove's picture

Simple, do what Greenburgh Ny is trying to do raise RE Taxes 100% for starter homes. Sit back and wait for the Deluge.

daveO's picture

This is why we buy metals(honest money). It's more likely that Trump will be JFK'd by John Hinckley than the FED doing the right thing.

rahtidmon's picture
rahtidmon (not verified) ebworthen Mar 24, 2016 1:32 AM

Too many people with ARMs yet...


goodness adjustible rate mortgages....not guns ugh!

Yen Cross's picture

   Remember that '80's punk band called the 'Circle Jerks'?  Those guys were about 30 years ahead of themselves.

Atomizer's picture

Don't get me posting music links tonight. /LOL

Just one. I don't have any social media accounts. I like old school music. Give them the opportunity to make $0.50 for the month. 

Siouxsie And The Banshees Spellbound

rahtidmon's picture
rahtidmon (not verified) Yen Cross Mar 24, 2016 12:10 AM

I remember the 80's well, at least I think so (lol), never heard of 'em! Anyway, point well taken!

Circular firing squad comes to mind as well!

Sir, it is in the CONTRACT...You will get NOTHING...GOOD DAY, SIR!