China devaluation - hedge fund overcrowded trade?
invite response
2016 Feb 4, 11:20pm 2,504 views 3 comments
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1
Tenpoundbass
2016 Feb 5, 4:28pm
Tenpoundbass
2016 Feb 5, 4:28pm
If renminbi is weak and dollar is the only strong currency in the world, we are going to import a lot of deflation.
Shave and a hair cut two bits!
2
Misc
2024 Feb 14, 1:32am
Ever been a bit early on a market call?? - This OP is from 2016.
Ok, China is now in a bit of a hurt. The unemployment rate (yes, they have one) is running high (especially for the younger cohort) and I am expecting their real estate development workforce to take a dive coming up as property development companies go BK.
They're gonna need employment for a few hundred million people and they are an export oriented economy. They've been keeping the Yuan just under 7.2 to the dollar for a long while now. This is starting to reduce their exports to Europe and the rest of the world because everyone else's currency is getting slaughtered by the dollar.
When the Yen last traded at more than 150 to the dollar. China devaluated their currency. They may do it again, fairly soon, as a way to beef up their exports, and by way of that their employment.
Well, we will see.
Ok, China is now in a bit of a hurt. The unemployment rate (yes, they have one) is running high (especially for the younger cohort) and I am expecting their real estate development workforce to take a dive coming up as property development companies go BK.
They're gonna need employment for a few hundred million people and they are an export oriented economy. They've been keeping the Yuan just under 7.2 to the dollar for a long while now. This is starting to reduce their exports to Europe and the rest of the world because everyone else's currency is getting slaughtered by the dollar.
When the Yen last traded at more than 150 to the dollar. China devaluated their currency. They may do it again, fairly soon, as a way to beef up their exports, and by way of that their employment.
Well, we will see.
3
HeadSet
2024 Feb 14, 7:52am
HeadSet
2024 Feb 14, 7:52am
Misc says
Yes, and this is why China having a population decrease is not a bad thing.
The unemployment rate (yes, they have one) is running high (especially for the younger cohort)
Yes, and this is why China having a population decrease is not a bad thing.
Kyle Bass has been talking about it like it's such a sure trade. In 2011 he was talking about JGBs blowing up. Guess what 10 JGBs are at 0%.
I am starting to think that it makes more sense for the dollar to start depreciating a bit against everything rather renminbi depreciating against the dollar.. If renminbi is weak and dollar is the only strong currency in the world, we are going to import a lot of deflation.