In case you missed it, China has devalued their currency for two consecutive days. The devaluation has been just over 2% and it has caused markets around the world to implode. This is just the beginning. They plan on devaluing their currency by 10% in a desperate attempt to revive their floundering economy. What they are really doing is crushing the economies of the US, Europe and Japan as their companies have a harder time competing in world markets.
Those who don’t think the US is heavily dependent on China as a market are delusional. Check out this chart.
Without these tremendous increases in exports to China, these states would be in far worse shape than they already are. When this devaluation is complete, the companies in these states will be 10% less competitive. Their exports will decline. When exports decline, companies fire workers. Get ready. The fireworks are just beginning. Fourth Turnings sure are entertaining.
Don’t worry, Washington has a real high minimum wage, so everybody’s gonna be alright.
#1 oughta be Washington D.C.
With the de-valuation does that mean those in CONgress will have to ask for a 10 % increase in their bribes.
Don’t worry about Michigan (probably most of those states), our “trade” with China primarily concerns importing parts to stick together with union salaries. What you see as “sold to” China is probably the Chinese companies sending stuff back and forth. We send steel (owned by Russia now, how funny) and Dow Chemicals and they send us back everything else.
Reality is probably closer to the truth that China is blowing up because we have flooded the world with USD for over 15 years AND that our “consumer” is dead.
China will have to reconcile the profit margins of the Fortune 500 companies they allowed in their country with the reality that the Western middle class has been decimated.
All those “brilliant” CEOs and CFOs that have been pocketing the skim from offshoring our futures are going to take a hit. They just could have never believed that the Chinese government would actually be more corrupted and ruthless then they themselves are. They bet wrong, way wrong. They also can’t seem to grasp that in a sales environment where your customers are making less than $5 a day, you would NEVER be able to keep your $30 million annual compensation. Funny how math always wins.
We should not be wanting China’s demise. China and Russia are probably the only spots of hope we have to break our overlords’ plan of destruction of us and the raping of every person, place and resource worldwide.
Unless we really think the guys that run the West, own the banks, created this mess, profited from this mess, are going to actually “fix” or “reform” this mess.
We probably do believe that (as a majority), my hub sure as hell does.
It isn’t just our limited exports to China that need to be considered, it’s everything we export anywhere in the world that will be ever more overpriced against competing Chinese made goods.
China Devalues Yuan For 3rd Day To 4 Year Lows, Argentina Suffers Losses & Japan Escalates Currency Race-To-The-Bottom
Submitted by Tyler Durden on 08/12/2015 21:21 -0400
China stocks are lower and for the 3rd days in a row PBOC devalues the Yuan Fix (now down 4.65% in 3 days). Even before this evening’s date with debasement history, Japan felt the need to step up the currency war rhetoric. Following disappointing Machine Orders data, Abe advisors Hamada warned that “Japan can offset Yuan devaluation by monetary easing,” and so the race to the bottom escalates. China has its own problems as BofAML’s leading economic indicator showed “the foundation for a growth recovery is not solid, facing more downward pressure,” and while confusion reigns over why The PBOC would intervene at the close to strengthen the Yuan last night, the reality is the commitment isn’t to a devaluation for China’s exports, but undoubtedly its actions are directed toward trying to keep the wholesale finance interfaces somewhat orderly. Finally, China’s devaluation couldn’t come at a worse time for Argentina – about a quarter of the country’s $33.7 billion of foreign reserves are now denominated in yuan, which suffered its biggest loss since 1994 on Tuesday.
Having devalued the (onshore) Yuan fix by 3.5% in the last 2 days, China did it again… shiftiung Yuan to 4 year lows
*CHINA SETS YUAN REFERENCE RATE AT 6.4010 AGAINST U.S. DOLLAR