Monday, April 09, 2012

Renminbi Rate Near Equilibrium

Ya think? 

We have written for many years that the Chinese currency was overvalued and would eventually implode or be devalued, thus destabilizing global trade and investment in China even further.  This while our last two Treasury Secretaries called for China to let the renminbi float so that it would appreciate in value.   Ignorant U.S. politicians will eat those words. 

Now, we are starting to see a recognition that the renminbi issue isn’t going away.  First the perception of the renminbi was that it was undervalued.  Now it is starting to be perceived as fairly valued.  The trend is in the opposite direction that our corporate masters and their political toadies believed would happen.  Next, for those who think with their eyes, it will be overvalued as China is revealed to be financially-bankrupt just as we said they would be years ago. 

The implications of this macro dynamic are wide and deep as we have discussed numerous times.   Volatility dead ahead.   The world continues to unfold exactly as we said it would.

 Title link here.

posted by TimingLogic at 9:20 AM

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