This Is Not A Drill: India, Russia And Thailand Prepare For Currency War

Currency wars


This Is Not A Drill: India, Russia And Thailand Prepare For Currency War (ZeroHedge, Aug 11, 2015):

When China sneezes, the world catches a cold. Alternatively, when China devalues, the rest of the (exporting) world scrambles to not be the last (exporting) nation standing, and to do so next, before everyone else does.

Case in point, at least three major emerging market nations announced they are bracing for currency war.

First India, where NDTV ask rhetorically “How China’s Devaluation of Renminbi Impacts India” and answers:

Read moreThis Is Not A Drill: India, Russia And Thailand Prepare For Currency War

China Enters Currency War – Devalues Yuan By Most On Record

Begun The Global Currency Wars Have


China Enters Currency War – Devalues Yuan By Most On Record (ZeroHedge, Aug 11, 2015):

Update: The Chinese currency complex is collapsing… 12 month NDFs just hit a new 5 year lows against the USD – biggest plunge since Lehman

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S&P futures have retraced most of the day-session gains…

Read moreChina Enters Currency War – Devalues Yuan By Most On Record

China “Loses Battle Over Yuan”, And Now The Global Currency War Begins

China “Loses Battle Over Yuan”, And Now The Global Currency War Begins (ZeroHedge, Aug 11, 2015):

Almost exactly seven months ago, on January 15, the Swiss National Bank shocked the world when it admitted defeat in a long-standing war to keep the Swiss Franc artificially weak, and after a desperate 3 year-long gamble, which included loading up the SNB’s balance sheet with enough EUR-denominated garbage to almost equal the Swiss GDP, it finally gave up and on one cold, shocking January morning the EURCHF imploded, crushing countless carry-trade surfers.

Fast forward to the morning of August 11 when in a virtually identical stunner, the PBOC itself admitted defeat in the currency battle, only unlike the SNB, the Chinese central bank had struggled to keep the Yuan propped up, at the cost of nearly $1 billion in daily foreign reserve outflows, which as this website noted first months ago, also included the dumping of a record amount of US government treasurys.

And with global trade crashing, Chinese exports tumbling, and China having nothing to show for its USD peg besides a propped and manipulated stock “market” which has become the laughing stock around the globe, at the cost of even more reserve outflows, it no longer made any sense for China to avoid the currency wars and so, first thing this morning China admitted that, as Market News summarized, the “PBOC lost Battle Over Yuan.”

That’s only part of the story though, because as MNI also adds, the real, global currency war is only just starting.

currency-war

Read moreChina “Loses Battle Over Yuan”, And Now The Global Currency War Begins

Chinese Trade Crashes, And Why A Yuan Devaluation Is Now Just A Matter Of Time

Chinese Trade Crashes, And Why A Yuan Devaluation Is Now Just A Matter Of Time (ZeroHedge, Aug 8, 2015):

Overnight we got another acute reminder of just who is lying hunched over, comatose in the driver’s seat of global commerce: the country whose July exports just crashed by 8.3% Y/Y (and down 3.6% from the month before) far greater than the consensus estimate of only a 1.5% drop, and the biggest drop in four months following the modest June rebound by 2.8%: China.

BRICS Bank, AIIB Pledge Partnership, Loans To Be Issued In Yuan

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BRICS Bank, AIIB Pledge Partnership, Loans To Be Issued In Yuan (ZeroHedge, July 25, 2015):

Over the first half of the year, we’ve built on several narratives that we believe are critical when it comes to understanding how the intersection of geopolitics and economics is set to shape the world going forward.

One of these narratives revolves around the extent to which three China-led ventures are set to supplant traditionally dominant supranational lenders on the way to embedding the yuan in international trade and investment. 

Read moreBRICS Bank, AIIB Pledge Partnership, Loans To Be Issued In Yuan

The PetroYuan Is Born: Gazprom Now Settling All Crude Sales To China In Renminbi

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–  The PetroYuan Is Born: Gazprom Now Settling All Crude Sales To China In Renminbi (ZeroHedge, June 9, 2015):

As Russia adjusts to Western sanctions stemming from the conflict in Ukraine, Gazprom is now settling all crude sales to China in renminbi. At the intersection of the petrodollar’s death and yuan hegemony is: the PetroYuan…

De-Dollarization Du Jour: Russia’s Largest Bank Issues Yuan-Denominated Guarantees

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De-Dollarization Du Jour: Russia’s Largest Bank Issues Yuan-Denominated Guarantees (ZeroHedge, June 7, 2015):

The unipolar, dollar-dominated post-war world is shifting under Washington’s feet.

Leading the push towards multipolarity and de-dollarization are a resurgent Russia and China, the rising superpower. The demise of the Bretton Woods world order is perhaps nowhere more apparent than in the launch of the BRICS bank and the establishment of the AIIB. These new structures represent a move away from US-dominated multilateral institutions and their very existence suggests that a failure to adapt to economic realities and an inability or unwillingness to meet the needs of the modern world may soon drive institutions like the IMF into irrelevancy. 

Read moreDe-Dollarization Du Jour: Russia’s Largest Bank Issues Yuan-Denominated Guarantees

China To Establish Yuan-Denominated Gold Fix In Bid To Upend London Benchmark

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China To Establish Yuan-Denominated Gold Fix In Bid To Upend London Benchmark (ZeroHedge, May 6, 2015):

A long time ago, in a financial galaxy far, far away, a “fringe” blog raised the topic of gold market manipulation during the London AM fix. Several years later (which, incidentally, is about average in terms of the lag time between when something is actually going on and when the mainstream financial media finally figures it out and reports on it), it was revealed that in fact, shenanigans were likely afoot and indeed, regulators are still trying to sort out what happened.

Via WSJ earlier this year:

Read moreChina To Establish Yuan-Denominated Gold Fix In Bid To Upend London Benchmark

De-Dollarization Continues As Russia Seeks AIIB Membership

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As Moscow and Seoul throw their support behind China’s Asian Infrastructure Investment Bank, the question is no longer about the end of dollar hegemony but rather about the extent to which the new venture will be used to institute a global shift towards the yuan. 

–  De-Dollarization Continues As Russia Seeks AIIB Membership (ZeroHedge, March 28, 2015):

As we noted a week ago, Vladimir Putin’s calls for a Eurasian currency union clearly demonstrate that the Russian President is acutely aware of the fact that the unipolar world of the 1980s is long gone. Putin’s security council also made it clear this week that the Kremlin is well aware that the sole aim of US foreign policy is preserving Western hegemony via an implicit (and sometimes explicit) policy of containment aimed at perpetuating the idea of US exceptionalism. Moscow then took the rhetoric up a notch on Thursday, accusing the US of attempting to take the “mutual” out of “mutually assured destruction” (i.e. Moscow thinks Washington is trying to tip the nuclear power balance).

Given all of this, we weren’t surprised to learn that Putin is now backing a Russian bid for membership in China’s Asian Infrastructure Investment Bank (for a summary of AIIB developments, see here).

Here’s more via RT:

Russia decided to apply to join the China-led Asian Infrastructure Investment Bank (AIIB), the country’s Deputy Prime Minister Igor Shuvalov said on Saturday.

“I would like to inform you about the decision to participate in the AIIB,” which was made by Russian President Vladimir Putin, Shuvalov said at the Boao Forum for Asia.

Read moreDe-Dollarization Continues As Russia Seeks AIIB Membership