This is a brief post for my friends to clarify things. You are going to hear various bogus things in the mainstream media, so hopefully this brings things into better focus. While the mainstream media says to invest in US dollars, I think they are giving bogus advice…that the Canadian & Australian dollars are better over the medium haul…Canada has been balancing their budget & creating real new jobs, some solid economic growth vs. our fake improvements. At any rate, any time there are market changes, those who are hip to the new dynamics will make money. What does China’s recent devaluation move mean??
A CURRENCY WAR. Not everyone is realizing that this move was a subtle attack on the dollar. China now sees the U.S. dollar as a liability (even though they still have plenty). This latest move unpegged the value of the yuan to the dollar, and will manipulate the World’s economy more in their favor. (I suspect that the tension between the U.S. & China is far more than economic…I wonder about these recent disasters in China. I wonder what is going on behind the scenes in secret. I won’t add to the speculation. I can say this… the Chinese people loath the Japanese. If the Chinese govt. wants to get their people’s minds off of their domestic problems –which are many—all they have to do is start problems with Japan and their people will be distracted & patriotic. Japan is finally realizing that China is a serious problem. I saw all this coming in ’97 and tried in vain to warn the Japanese then when I lectured in Tokyo & Osaka, so it rankles me to see me proved right.)
A MOVE CALCULATED TO GIVE THEM ANOTHER CHANCE AT WORLD RESERVE CURRENCY STATUS. The IMF had appeared to back away from their previous notion to give China World Reserve Currency status in October, 2015. The IMF requires a World Reserve Currency to be convertible, market-driven and freely usable. China’s recent devaluation and unpegging from the US$ will make it easier for the IMF to change their mind again and return to their previous plan to announce in the third week of October that China will be granted Reserve Currency Status. This recent devaluation is the largest single devaluation of their currency since 1994. Our Fed has been doing subtle devaluations by their QEs.
OIL PRICES. Prices at the pump have been going down, as well as world oil prices. Oil (along with many other commodities) is priced in dollars, and this yuan devaluation will continue to drive oil prices down, in spite of the worldwide demand for oil remaining stable or increasing.
THE BEGINNINGS. This is only the first stage of a currency war. Where it progresses will be of importance in our future. I feel duty bound to pray for peace, incl. world peace. May mankind realize our need to work together to solve things. And our need to be at peace with our Creator.