The Traderszone Network

A one year and 5 year chart on the CNY
Up until not too long ago the yuan had been strengthening against the USD
Putting the move into context over 1 year and 5

[Apologies, I initially published two posts out of order.]

I’m working on turning my blog into a book, and in order to do that I need to give readers an idea of how I ended up where I am today.  One obvious need is to explain how I adopted a quantity theoretic approach to monetary analysis, rather than some alternative like the interest rate approach.  For me it all goes back to the Great Inflation of the 1960s to the early 1980s.

As an aside, the quantity theory can be defined in several ways:

1.  An X% rise in M will be associated with an X% rise in P

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China will not tolerate economic weakness
If it wasn’t blaringly obvious after rate cuts, banning short selling and massive interventions in the stock market; it is now. There is no reform in China, no short-term-pain-for-long-term-gain.

Trainwreck? Rail traffic fell in July from a year ago as WSJ reports an increase in container volumes couldn’t offset a steep decline in oil and coal shipments according to the Association of American Railroads.

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The People’s Bank of China has allowed the yuan to depreciate sharply, sending a shock through currency markets.

The U.S. dollar lurched higher on Tuesday as China allowed its yuan to fall to levels last seen in 2012, a move that could provide a competitive boost to exports from the world’s second largest economy.

More from the People’s Bank of China:
– To improve pricing meachnism for yuan fixing
– To increase exchange rate flexibility
– To keep yuan at reasonable, equilibrium level
more to come