China's Most Recent Currency Remarks At The G8

What we really see as a driver for countries like Russia and China seeking reserve currency reform is that these countries have benefited from beggar they neighbor economic policies - better known today as globalization. Now these manipulative tactics aren't working so they want change. In other words, they were more than happy to accept an economic model that benefited them. But now that it doesn't work to their benefit, they don't want to play by those rules anymore. Good luck. We might see change in global commerce but it isn't going to be dictated by Russia or China. And however this ends up, it won't benefit them either. We remain a lone voice of reason - globalization is dead.

As part of our countless China posts, we have highlighted the yuan is substantially worthless on some level. China is now coming to a realization of their economic reality and that is the driver behind their desire for change. This is about self-preservation more than anything else. Their economy is built on the need for ever greater access to dollars and the party is over. To believe their unorganized and confusing remarks about the dollar is some effort to restore some type of fairness is hilarious. This from a country whose economic policy is one of predation? Additionally, do we need reminded that we are talking about a communist leadership that preaches harmony while terrorizing the people of China? Taking any of China's remarks at face value is very foolish.

Yes, yes this yuan currency remark sounds ridiculous but it sounds much less ridiculous now than when we made those remarks now doesn't it? Remember we said the same thing about the ruble when most everyone on Wall Street cited it as a sound currency and Russia as a sound economy. Even many well-respected realists like Marc Faber or Jim Rogers would have laughed as they pumped emerging markets. Now? Russia is one shock away from collapse.

All in due time.