China’s (not) SAFE

By |2018-11-07T19:19:16+00:00November 7th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In another sign of repeating 2015, the Chinese are beginning to mobilize their “reserves” again. Three years ago, in a futile attempt to staunch CNY’s stubborn “devaluation” various government authorities blew through just about $1 trillion. It didn’t work. You would think that everyone could learn from this episode. I think the Chinese did, which [...]

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 [...]

Hong Kong, China, And The Nightmare of Forex Piles

By |2018-04-13T19:35:35+00:00April 13th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Very early on in the turn, I mean very early, you could already tell there were substantial problems underneath. By the time CNY started lower, against all expectations, there had already been serious signs of trouble in China for months by then. In that initial seemingly minor drop in early 2014, the PBOC’s actions belied a [...]

CNY Fix and SHIBOR Suggest Blaming PMI’s Is Half The Story

By |2016-01-04T16:19:22+00:00January 4th, 2016|Currencies, Economy, Federal Reserve/Monetary Policy, Markets, Stocks|

There does seem to be internal financing adjustments going on inside the arcane and cumbersome framework of CNY to US$. Whether or not that is desirable remains to be seen, but the case of the past few weeks suggests, and somewhat strongly, that the PBOC is again losing control. What it is almost certainly like [...]

Still The Run

By |2015-08-18T14:44:32+00:00August 18th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

To start this week, Ma Jun, chief economist for the PBOC, gave an email interview where he expressed his belief that the yuan will be more volatile but in either direction. Many still took those comments as if it were a veiled prescription toward devaluation. In the near term, it is more likely there will [...]

So Far, Inevitable ‘Dollar’

By |2015-08-11T13:06:28+00:00August 11th, 2015|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Everything in dollar-denomination yesterday was lifted by the usual M&A debasement and quite sour data from China. The latter was taken as if there would be renewed “stimulus” in the near term. The “dollar” took a break from its recent destructive nature, as commodities rebounded as did currency proxies and even gold. Stocks in the [...]

Yuan Devaluation or Inevitable ‘Dollar’?

By |2015-08-11T11:28:36+00:00August 11th, 2015|Economy, Federal Reserve/Monetary Policy, Markets|

Going back well more than a year now, every time the PBOC takes some kind of action it is classified immediately as “stimulus.” Last July, the Chinese central bank opened its PLF to China Development Bank and it was heralded as a renewed age of traditional monetarism if in unfamiliar formatting. In November, the first [...]

Textbook Demolition

By |2014-10-22T11:00:13+00:00October 22nd, 2014|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The chatter that continues over Japan’s spiral into (further) economic impoverishment is simply astounding since it is taken as “expert” by the media. A credentialed economist will look at some numbers and simply take them as meaningful, especially if they are the “right” sign in the “right” direction. This is either wholly obtuse or intentionally [...]

Inflation and Devaluation Are But Temporary ‘Highs’

By |2014-10-08T21:39:28+00:00October 7th, 2014|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The reason I spend so much time on Japan is that it is the purest “laboratory” conditions available in which to determine, hopefully for all time, the (un)viability of monetarism.  The orthodox monetary practitioners that unleashed the yen torrent were not last year equivocating in their predictions and forecasts.  Abenomics and QQE would work without [...]