www.armstrongeconomics.com
China devalued the Yuan in what many think was a surprise move. What
they do not understand is that this move is more than trying to firm up exports;
this devaluation has a similar impact to raising interest rates to stem
speculation.
Foreign capital just lost 2%. I have stated before, the
Bank of China has people with experience unlike many central banks. This
experience has come from working on dealing desks and they understand
trading far better than any other central bank. True, the devaluation
will help its sagging exports, but this is temporary for as the US
economy turns down after October, the dollar will rise further and we
should expect the yuan to decline further.
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