Talk about timely: Yesterday, I pointed to a fascinating piece of research/commentary from GaveKal Research Limited of Hong Kong, Stockholm and New York.
Today, the People’s Bank of China revalued the RMB by 2.1%, from 8.27 to 8.11 to the US Dollar, against a basket.
Be sure to read that piece as to some of the dangers to the US economy of this revaluation.
More to come on this later . . .
I’m not a currency expert but somehow I see this as a legitimate way for the chinese to move away from buying US treasuries to control the peg, and incorporate other currencies in their currency management operations. Is my understanding of this correct?
absolutely! Higher rates acomin’
If the Chinese stop buying US treasuries how will the US fund its deficit? Can the US indebted consumer and mortgagee survive rate increases?
US Gov is planning 900 Bill worth of issuance this year. Wonder who will buy ? And what happens when Malaysia, Thailand, India and the rest of Asia sell treasuries.. Bonds are getting knocked today..