[Jonty30]

I think this counts as an "Uh oh"

[cranked]

“...massive dollar dump...”

Monday morning DOW stocks should be fun....

[SlipperySlope99]

Took a year and half for Biden to have us on the edge of WW3. I don’t think Biden won legitimately, but a special FU to the people who did vote for Biden because they hated “mean tweets” and wanted the adults back in charge.

[DesertRhino]

Oh no. That’s great news! If they dump all their dollars, we will have them all back here in America! I don’t know about you, but I am excited to walk around with million dollar bills in my wallet and FINALLY buy a 100,000 Dollar candy bar that actually costs that much.

/s

[SauronOfMordor]

Source link?

[Jonty30]

Any possibility that China is doing this because of inflationary pressures within their country?

Buy their yen back and reduce the number of yen flowing throug the country.

[MAGAthon]

well worth a watch. some subtitling, especially early, but they are no bother:

26 Sept: Youtube: 46m: The Great Fall Of China’s Housing Market: Who Will Pay The Price? | Insight | China Mortgage Boycott
https://www.youtube.com/watch?v=jNRtOEujfQc

[nathanbedford]

Assuming the truth of this article and further assuming that when it suggests a massive Chinese effort to save the yuan it is not exaggerating the extent of the effort, one is prompted to ask: why? If we know the answer to this question we might have a better idea about the next question, will it work?

Most likely, the effort is designed to improve China's capacity to purchase raw materials abroad suffering because the yuan is now so weak. It seems that the domestic real estate crisis is not so relevant to a strong yuan and indeed a week yuan might help Beijing paper over the bank crisis being caused by the real estate crash

I leave to others more knowledgeable to tell me what the data tells them, whether the Chinese have enough muscle to salvage their currency. I don't know but I suspect they cannot do more than temporarily delay a trend.

Assuming that the Chinese intervention will be ineffectual we must ask, nevertheless, how much damage can they do to dollar-denominated holdings in the process? How much damage can they do to the dollar itself? Will everybody flee to gold?

Finally, believing that the international economic system is hopelessly top-heavy and vulnerable to any black Swan at all, are we at the cusp of the deluge that so many of us fear will occur probably just after Christmas?

[zeestephen]

My impression has always been that China vigorously controls the US Dollar and Yuan trading spread.

I cannot even find a US Dollar-Yuan quote on the CNBC currency page.

According to Google, one US Dollar has bought 6.3 to 7.2 Yuan for the last FIVE years - currently trading for 7.12 Yuan.

Compare that to the strength of the US Dollar against a basket of foreign currencies (Euro, Yen, etc.)...

Since May 2021, the USD is up 25% (0.90 to 1.12) against the foreign basket!

[EBH]

The Economic Ninja said this was going to happen and faster than anyone expects. I do not think even he expected this right now...

https://youtu.be/5mXQtjmhz2s

The economic ninja talks about inflation and how the worlds economy is crashing.

[FarCenter]

Yuan Bears Bet China Is Powerless to Fight the Mighty Dollar

Yuan bears are on the prowl, emboldened by a belief that policy makers in China can do little to battle the surging dollar.

The yuan strengthened on Thursday following a report that China’s central bank had asked major state-owned banks to be ready to sell dollars for the local unit in offshore markets to rein in the Chinese currency’s decline. It had earlier weakened even after Wednesday’s verbal warnings from the People’s Bank of China, which cautioned against speculation on the currency and said it had “plenty of experience” in fending off shocks.

The comments came after the central bank made it more expensive to bet against the yuan in the derivatives markets. A jump in the required ratio to 20% as of Wednesday, from the previous 0%, increased the cost of purchasing dollars in the currency forwards market.

Still, derivatives traders are betting on further declines — the options market sees a more than 50% probability that the currency will drop further to 7.3 against the dollar in the offshore market in the next two months.

The cost of hedging again yuan losses soared, yet well below 2020 peaks

Three-month risk reversals, which measure the cost of hedging against offshore yuan losses, soared over the past few days and briefly exceeded 1.5% on Wednesday. Still, the gauge remains lower than its 2022 high reached in May and well below the peaks set two years ago at the height of the global pandemic.

“There’s not much else the authorities can do at this stage apart from really trying to enforce capital controls more aggressively,” said Mansoor Mohi-uddin, chief economist at Bank of Singapore Ltd. “They don’t have a very strong hand at this stage vis-a-vis market forces.”

https://www.bloomberg.com/news/articles/2022-09-28/yuan-bears-bet-china-is-powerless-to-fight-the-mighty-dollar

Its a contest between PBOC and external currency traders and speculators. Is there a Soros out there trying to break the Yuan?

[moovova]

[Vaduz]

Yep it’s going to put a crimp on some Hunters deals for a bit.