Well,t the PBOC can not defy gravity, neither can the party. The recent stock market condition created by the authority only delays what is going to happen. For the yuan, the keywords are "remain competitive" that means going down. Tough txts.
Dropped another 1.1%
blogs.barrons.com/[...]
Here is an interesting, well some may find it interesting, article, on how monetary policy of the US screwed China in the 1930's, and 40's, and helped Mao. It ties silver and currency rates to economic performance.
In Friedman's 'Money Mischief: Episodes in Monetary History," 1994, (Kindle $10), Chapter Seven is devoted to the effect of US policy to artificially drive up the price of silver in 1933. The resulting deflation in China collapsed the Chinese economy and contributed to the success of Mao.
I think the recent Yuan devaluation is over. China is supporting the Yuan by selling Dollars and hopes of the Yuan becoming either a reserve or SDR currency are fading. China's growth has been debt driven and there are signs this hand is being played out. As China's options become less, the likelihood of inflation increases. That, coupled with a slower growth, will increase stress on the economy. Seems to me, there may be a period of political play at the highest levels ahead. We shall see.
it is the weakness in systemic governance that causes the rats abandoning a sinking ship. :-)
Got a good rate at the bank today when I went to make my monthly withdrawl. Wow!
