On the Road to Panicville

by Pater Tenebrarum
Acting Man

An Alert for the Global Posse of Liquidity Junkies

In the summer of 2015 and again in December-February this year, global stock markets were rattled by weakness in the yuan’s exchange rate vs. the US dollar. Yuan weakness is widely held to exacerbate pressures on other (already weak) emerging market currencies, but more importantly, it is seen as a symptom of accelerating capital flight from China.

[…] Why is it considered important whether or not China’s foreign exchange reserves are increasing or declining? Similar to Japan, China has become a major cog in the global fiat money Ponzi game, in which foreign central banks monetize US treasury bonds by recycling dollar-denominated trade surpluses.

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