there is no recovery

Big Mama Leaves Huge Footprints Stepping All Over ‘Devaluation’

By |2018-06-27T19:09:41+00:00June 27th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Not a good day to be a global central bank. Competitive devaluations all around? Kidding aside, it’s getting serious in China. CNY DOWN = BAD, so says Big Mama. "The kind of dollar selling from that bank was so aggressive that we knew instantly that it must be from the Big Mama," said a Shanghai-based [...]

Revisiting China and ‘Devaluation’ As China Revisits ‘Devaluation’

By |2018-06-25T13:21:27+00:00June 25th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

When the Chinese yuan suddenly plummeted in mid-August 2015, the world looked on in stunned confusion. It didn’t make sense. The global economy was about to take off, they thought, and it wouldn’t be doing that without China’s vast anticipated contributions. Such a large move in such a short time frame for a major currency [...]

Further Early Confirmation on PBOC Intentions

By |2018-06-22T13:08:25+00:00June 22nd, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The level of Chinese bank reserves fell again in May 2018. Year-over-year, what is technically classified as Deposits of Other Depository Corporations on the PBOC’s liability (money) side of its balance sheet contracted by 1%. This advances a very different trend for reserves, breaking what had been a more continuous and determined effort toward at [...]

China’s Monetary Shell Game (Confirmed for Step 2)

By |2018-05-21T12:04:31+00:00May 21st, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Chinese bank reserves contracted in April 2018 for the first time in almost two years. The decline was small, just 0.2%, but it is still represents a significant deviation from the limited growth since the turmoil in 2015 and early 2016. The decline in reserves further corroborates our theory of events. To briefly review, China [...]

Chart of the Week: PBOC Clumsily Stumbles Into Step 1

By |2018-05-11T17:04:19+00:00May 11th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

A few weeks ago, the PBOC stunned many mainstream observers by reducing the RRR. It cut against the preferred narrative that the central bank was “tightening” in anticipation of an economic and therefore inflationary breakout (labor shortages, don’t you know). It didn’t seem to make sense. From the perspective of globally synchronized growth, it wouldn’t. [...]

China’s Monetary Shell Game

By |2018-04-17T17:57:08+00:00April 17th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Throughout much of last year, we were told repeatedly that the PBOC was tightening monetary policy. China’s central bank had raised its reverse repo rate twice early on, and then once more last December (and would do so again just last month). These moves coincided with Federal Reserve “rate hikes”, seemingly in line with the [...]