Wednesday, August 12, 2015

Is China's devaluation leading to a lot of rear end hot air? Anything to please the Stansberry crowd?


The media is making a lot of China’s devaluation of the renminbi, measured in yuan, rather obviously intended to make Chinese goods even easier to sell in the west and make Chinese labor even cheaper (rather anti-Maoist, to be sure).  The Telegraph has a typical explanation, here
    
Yahoo! has an explanation of the market’s concern, is that China is trying to get the IMF to add the yuan to the basket of “reserve currencies”.  This might be related to Porter Stanberry’s speculations that the use of the dollar as a reserve currency will stop someday, and that somehow that would bring ATM’s in the US to a halt! 

At the end of the day, the Dow was about flat, and the markets seemed to be calming down. Retiree portfolios could be hit by the stock slide, and some bond portfolios with exposure to Greece, Puerto Rico, or some other countries could be hurting, but other bond prices could rise. 
  
Neil Irwin of the New York Times has written about “currency wars”, but suggested that no country can continue growing as a first class power if it overly restricts the use of its currency. 
     
In my own “practice”, I got a lot of unsolicited emails in late 2013 about using my domain name in China, where I am supposedly banned.  There are a lot of domain name scams in China (explained here in a piece from Canada ).  But it’s curious to me that media companies – Hollywood movie studios in particular  -- have to be so concerned about selling in China, in an environment where individual freedom of speech and thought are not valued the way they are here.   

There's another big story today about China's orphans, such as here on CNN, along with a Blogspot posting on one US family's attempt to adopt, and the social media popularity of the family's efforts.

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