They are forced to honor Sam Walton's dreams.
Posted on 08/06/2019 2:24:30 PM PDT by SeekAndFind
As expected, China's central bank came in today to stop the bloodletting in the markets following Monday's shocking after-market announcement by the Treasury Department that the Bank was manipulating the dollar-yuan exchange rate.
Animal spirits went into near-giddyness in the market after hours Monday, thinking Treasury would deliver a blow to China assets this morning.
China ended up doing better than expected, thanks in part to the actions of the central bank, led by Yi Gang.
The People's Bank of China announced on Tuesday that it would provide some stability in the coming weeks to the yuan. They'll take about 30 billion yuan ($4.2 billion) out of the market in Hong Kong on Aug. 14, they said. The move is designed to make the yuan "scarce", giving it a chance to strengthen against the dollar. Which it did on Tuesday morning, irking last night's short sellers.
The yuan went from 7.05 at yesterday's close to 7.02 early this morning. It would not be surprising to see it fall back below 7 this month on the central bank's currency moves, though for how long is anybody's guess. The market is mostly short yuan, with economists like Bill Adams from PNC Financial Services in Pittsburgh forecasting a 7.10 exchange rate before the end of the year.
China's major stock indexes all closed lower, but nothing out of the ordinary. Shanghai was down 1.55%, Shenzhen was down by around 1.4% and the ChiNext was down 1.56%. The Hang Seng fell just 0.67%.
(Excerpt) Read more at forbes.com ...
Yuan more time for currency ping-pong.
Now it’s our serve.
If Trump tells them “you’ve just made your last shipment to Walmart” the place breaks out in full-on bloody revolution six weeks later.
What happens to WalMart after that?
That, I would love to see.
Of course, the media would immediately take China’s side.
“The President continues to bully the downtrodden working class people of China!”
They are forced to honor Sam Walton's dreams.
So China devalues their currency in a big way and the market crashes. Then they back off a bit and there is a rebound and we are supposed to cheer about how wonderful it was? That reminds me of a Clinton move in the 90s.
Personally, I think China expected Trump to flinch and he didn’t. In the long run, it will hurt China far more that it will hurt us. They are playing with a different kind of president now.
Embargo -the ultimate tariff.
US companies which outsource to China got the message to “get out of China”. They’ve been handed a 10-25% incentive to move their outsourced manufacturing to another country other than China.
China is not a friend of free market capitalism or the community of nations. Targeted tariffs make perfect sense.
There are many reasons the yuan is depreciating and the Central Bank of China can do only so much to prop it.Iran is especially vulnerable to yuan depreciation. They are forced to accept yuan as payment for whatever oil they sell to China. If China paid in dollars, the American imposed sanctions would be violated which would subject Chinese banks and companies to penalties. The Iranians use the yuan to import premium priced food, clothes and shoes from China. By using the yuan, the Chinese are getting a big discount on prevailing world oil prices and Iran is taking a hit.
“By using the yuan, the Chinese are getting a big discount on prevailing world oil prices...”
How so? If the yuan is devalued vs. the dollar and world oil is priced in dollars the Chinese have to pay more yuan to make the same dollar priced purchase of oil.
This was just a convenient opportunity for Soros and the Chicoms to calibrate their October Surprise for next year.
From what I have read/heard the Chinese central bank has pretty much full control of the value of the Yuan vs. other currencies. Unlike Western currencies trading in free markets.
Here’s my prediction on how China can signal that it is serious about reversing the trade war escalation without appearing to do anything overt that would lose face.
Somewhere buried in the pages of a provincial Chinese newspaper a story appears that describes a major bust of an illegal fentanyl exporter with quotes from the local party official that they will be dealt with severely.
Trump sees this and calls Xi to thank him at which point he offers to delay the 10% tariffs temporarily and personally look deeper into the Huawei technology ban. Xi denies that he had anything to do with the bust (actually not a lie since it would have been ordered by the Party) and portrays this as Trump blinking first to Chinese media before Trump goes public. Xi proposes to send his trade reps to Washington to resume talks now that Trump has come to his senses.
The trade talks will not resume in earnest until the Chinese ask to send a delegation back to Washington. Trump can always activate the 10% tariff at any time since it would be contingent on further trade talk progress.
China takes shot at Trump, hits own foot.
So....china blinked. Lost face as it were....
Yeah, that could be one “save face” option for China...will have to wait & see I guess.
They are losing their ability to keep the Yuan afloat.
They didn’t even get it back above 7.
They will fail completely soon enough and it will collapse.
#Winning
Commies root for Commies.
Saving face is itself a face saving term. What saving face really means is telling a lie to buy time. Lying is not ok, ever. Anyone attempting to lie should be called out and embarrassed even further. It’s time for China culture to grow up. Really if you think of most people in Asia as children you wouldn’t be far off the mark.
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