The Phaserl


China Braces for Impact

from The Daily Coin:

Note:   Below this commentary is a Shadow of Truth “Market Update” in which Rory and I discuss possible reasons – besides the obvious – for why China is devaluing its currency. 

China began devaluing its currency two nights ago in a move that took the markets by surprise, judging from the reaction of the U.S. stock market and the precious metals.  While there are many obvious reasons for China to devalue its currency in relation to global currencies, ultimately I believe it’s China’s strategy of bracing for the impact of a global economic depression and the collapse of highly overvalued stock and bonds markets globally.  The latter of which resulted primarily from U.S., Japanese, European and Chinese money printing in unprecedented size and scope.

I find it amusing how analysts and the media in the U.S. are constantly pointing at Japan, Europe and China to demonstrate relative economic weakness and financial overvaluations.   In fact, when Rory and I were in the middle of recording our discussion on this issue, Marketwatch dispatched this article:   China could trigger the biggest financial rout since 2008.

With the media and most financial analysts it’s always the straw that broke the camel’s back that was the cause of a catastrophe, not the fact that the camel’s back was already insidiously overburdened with destructive weight…

But let’s look at this in the context of the overall, big picture.

This could be the black swan everyone one has been straining to see.  I view China’s move differently than desperation on China’s part.  I think it’s a brilliant defensive move by China.  Yes,  China has issues but the issues are no different or worse than the issues infecting the U.S. system.

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