The Silent Crash of China’s Currency

–  The Silent Crash of China’s Currency (ZeroHedge, May 11, 2014):

The financial markets in the West are barely pulling themselves together these days and over the last few weeks and months we have discussed the underlying issues at length; especially in the United States the pressure is on as the Fed’s tapering program continues ruthlessly. The US is not the only part of the world, however, where the skies are grey above the markets. We have not read a lot of positive news about the East lately either, where specifically China’s economy is in a slump.

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Is Someone Betting Furiously That The Chinese Currency Collapses By The End Of 2014?

Is Someone Betting Furiously That The Chinese Currency Collapses By The End Of 2014? (ZeroHedge, April 26, 2014):

Last week, USDCNY began to accelerate lower and break across the “real pain” threshold that we have been discussing for many of the world’s so-called “hedgers” who have been riding the one-way strengthening trend of the CNY for years and piled in with leveraged trades on what had been a one-way bet. The collapse this week, to levels not seen since pre-BoJ QQE and pre-Fed QE3 appeared to trigger an avalanche of unwinds or hedges of the exposures we have been worrying about. As the chart below shows, billions of dollars of upside calls on USDCNY were purchased on Friday with serious size out to 6.65 strikes (levels not seen since 2009) by the end of 2014.

PBOC Pressures USD Hegemony; Starts Yuan-Denominated Gold & Oil Trading

PBOC Pressures USD Hegemony; Starts Yuan-Denominated Gold & Oil Trading (ZeroHedge, April 25, 2014):

With 23 foreign central banks diversifying from US Dollars to Renminbi and the PBOC actively aiding numerous major financial hubs around the world with bilateral currency swap agreements, it seems yet another nail in the coffin of US dollar hegemony just got hit…

  • *PBOC AIMS TO SET UP GLOBAL PAYMENT SYSTEM FOR YUAN: SEC. NEWS
  • *PBOC TO MAKE GOLD, OIL FUTURES YUAN DENOMINATED: SEC. NEWS

Nothing lasts forever, no matter how much you believe…

Read morePBOC Pressures USD Hegemony; Starts Yuan-Denominated Gold & Oil Trading

China And Germany Sign Yuan-Settlement Pact … And Obama Heads To Saudi Arabia

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The PBOC and Bundesbank Sign Pact to Turn Frankfurt into Yuan Hub….Meanwhile Obama Heads to Saudi Arabia (Liberty Blitzkrieg, March 28, 2014):

I haven’t paid too much attention as of late to agreements between China and other nations intended to expand the use of the yuan (renminbi) internationally, because the near-term implications always seem to be exaggerated by many market commentators. That said, this deal between the People’s Bank of China (PBOC) and Germany’s Bundesbank seems quite significant given the importance of Germany within the global economy generally and the E.U. specifically.

From Bloomberg via BusinessWeek:

Germany’s Bundesbank and the People’s Bank of China agreed to cooperate in the clearing and settling of payments in renminbi, paving the way for Frankfurt to corner a share of the offshore market.

Read moreChina And Germany Sign Yuan-Settlement Pact … And Obama Heads To Saudi Arabia

China’s Yuan Drops Most In A Week As Property Developers Tumble

China’s Yuan Drops Most In A Week As Property Developers Tumble (ZeroHedge, March 25, 2014):

When we left China last night, it was all shits and giggles that bad news is great news and a Chinese stimulus plan will be here any minute to save the day. Having realized the sad fact that is not going to happen (as we explained here most recently) and the specter of banks runs looming, this evening’s session has seen property developer stocks tumble – retracing all of last night’s losses – the Yuan plunges by the most in a week back above 6.2150. Copper is holding in for now at the magic $300 level but corporate bond prices are falling once again (worst run in 4 months).

The Yuan is dumping at its fastest rate in a week…erasing all the hope-strewn gains from yesterday

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Property Developers are taking it on the chin…

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And it’s no wonder, as Bloomberg notes…

Read moreChina’s Yuan Drops Most In A Week As Property Developers Tumble

Russia Returns Favor, Sees Chinese Yuan As World Reserve Currency

Russia Returns Favor, Sees Chinese Yuan As World Reserve Currency (ZeroHedge, March 23, 2014):

Following China’s unwillingness to vote against Russia at the UN and yesterday’s news that China will sue Ukraine for $3bn loan repayment, it seems Russia is returning the favor. Speaking at the Chinese Economic Development Forum, ITAR-TASS reports, the Chief Economist of Russia’s largest bank stated that “China’s Yuan may become the third reserve currency in the in the future.”

Managing Director and Chief Economist of investment company Sberbank Yevgeny Gavrilenkov said at the 15th governmental Chinese economic development forum in the Chinese capital on Sunday (via ITAR-TASS):

Read moreRussia Returns Favor, Sees Chinese Yuan As World Reserve Currency

Yet Another Massive Nail In The Dollar’s Coffin

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Yet Another Massive Nail In The Dollar’s Coffin (ZeroHedge, Dec 14, 2013):

Two years ago, the CME announced USD/CNH futures trading enabling speculation (and hedging or risk transfer) of offshore Chinese Renminbi. On the other side of the world this week, a couple of gentlemen that few people have ever heard of signed an agreement that has massive consequences for the global financial system. It was a Memorandum of Understanding signed by representatives of the Singapore Exchange and Hong Kong Exchange. Their aim – to combine their forces in rolling out more financial products denominated in Chinese renminbi. This is huge…

Submitted by Simon Black via Sovereign Man blog,

Hong Kong and Singapore are THE two dominant financial centers in Asia. For years they’ve been locked in competition with one another, much like New York and London. So their public partnership is a very big deal… indicative of the clear objective they have in front of them.

Bottom line – finance executives in Asia see the writing on the wall. They can see that the dollar is in a period of terminal decline, and it’s clear that the Chinese renminbi is going to take tremendous market share away from the dollar. They want a big piece of the action.

The renminbi has already surpassed the euro to become the #2 most-used currency in the world when it comes to trade settlement, according to a report released yesterday by the Society of Worldwide Interbank Financial Telecommunication (SWIFT).

Read moreYet Another Massive Nail In The Dollar’s Coffin

Bundesbank: China’s Currency ‘On Its Way To Becoming Global Reserve Currency’

Bundesbank Warns China’s Currency “On Its Way To Becoming Global Reserve Currency” (ZeroHedge, July 6, 2013):

Following the most recent shift ‘away’ from a USD-centric world (with the China-Australia direct currency convertibility), it seems the possibility of China’s Yuan as the next global reserve currency is getting closer. The Brits, Germans, and now the Swiss (who just signed a free-trade-agreement with China) are all actively vying to become Europe’s Yuan trading hub as it seems the long line of developments to internationalize the currency over the past two years. As Bundesbank board member Joachim Nagel noted in a speech entitled “Reniminbi as a potential reserve currency” this week, “the Chinese currency is well on its way to becoming one of the future global reserve currencies.” He noted that, although the USD is still the most commonly-used currency for settling trade with China; from virtually zero in 2010, the Yuan is used to settle over 12% of trading transactions now – and is likley to increase further.

Remember, nothing lasts forever:

Read moreBundesbank: China’s Currency ‘On Its Way To Becoming Global Reserve Currency’

Jim Rogers: China’s Economic Advance is All But Unstoppable

“The only thing that worries me permanently about the China story is water.

I’ve been around the world twice. I’ve seen many cities, societies, [and] nations that disappeared because the water disappeared. China has a huge water problem. In Northern China, they’re running out of water. They know this and they’re working on it, big time. But if they don’t solve it, or if they don’t solve it in time, then China – as you put it – has failed.

By the way, Northern India has the same problem, only worse. Many places have it now. Water is becoming a huge problem worldwide. The same is true in the Southwestern United States. You know, you may have Arizona going to war with California. Some sections of Nevada, Colorado …they’re desperate there.

So it’s not just China – but water’s the main thing that worries me about China.”

(As I said: In ten years the glaciers in the Himalaya region will be gone and 50% of the worlds population will have not enough or no water at all. The governments know this and they won’t sit & wait and do nothing about it. There will be World Water Wars.
And if China where to lose a million soldiers in a war so what. To them their soldiers have the same worth than to the US their soldiers in Iraq: They are considered as canon fodder.
If you think that this is wrong than I recommend the movie “NO End In Sight” (2007) as a first eye-opener.
Please read the whole article. – The Infinite Unknown)

Read moreJim Rogers: China’s Economic Advance is All But Unstoppable