by James Rickards
Daily Reckoning
The euro’s heading higher from its lowest levels in five years. This is part of the secret “Shanghai Accord” struck by the “Big Four” economic powers (China, Japan, U.S. and Europe) on Feb. 26, 2016.
Investors who act now will have big gains in the year ahead.
Here’s a quick refresher on the Shanghai Accord. The Big Four needed to find a way to cheapen the yuan to stimulate the Chinese economy, which is slowing dangerously. The last two times China cheapened the yuan against the dollar (August 2015 and January 2016), the U.S. stock market fell out of bed. There was a borderline stock market collapse both times.
The solution they agreed to was to keep the yuan pegged to the dollar and cheapen the dollar. This gave China, and the U.S., some relief.