China's Currency Devaluation More Than a Market Correction

Communist China devalued the yuan in what they say is a onetime event designed to make their currency more market oriented.  Economists are concerned about more than that.

Many economists said the decline was too small to help Chinese exports due to weak global demand. But the change fueled concern the yuan might fall further, giving Chinese traders a price advantage over foreign rivals and possibly igniting a “currency war” if other governments fight back by depressing their own exchange rates.

Economist Albert Edwards with the French bank Societe Generale had strong words along these lines.

“Make no mistake, this is the start of something big, something ugly,” Edwards told the Guardian, adding that he believes the devaluation could result in a “a tidal wave of deflation” across the world.

 Many believe China’s devaluation is more of a play to become one of the IMF’s reserve currencies along with the dollar, euro, yen, and British pound rather than a market correction.  This could get real interesting.

Source:

http://www.theblaze.com/stories/2015/08/13/why-some-economists-think-chinas-currency-devaluation-could-be-the-start-of-something-big-something-ugly/

Market Tremors Portend "Systemic Event"

If you listen real carefully, you can hear rumblings from concerned market watchers and investors.  This is reminiscent of the years leading up to the 2008 housing bubble implosion.  Here is a warning from one investment banker as reported by the Telegraph:

Ian Spreadbury, who invests more than £4bn of investors’ money across a handful of bond funds for Fidelity, including the flagship Moneybuilder Income fund, is concerned that a “systemic event” could rock markets, possibly similar in magnitude to the financial crisis of 2008, which began in Britain with a run on Northern Rock.

“Systemic risk is in the system and as an investor you have to be aware of that,” he told Telegraph Money.

The best strategy to deal with this, he said, was for investors to spread their money widely into different assets, including gold and silver, as well as cash in savings accounts. But he went further, suggesting it was wise to hold some “physical cash”, an unusual suggestion from a mainstream fund manager.

His concern is that global debt – particularly mortgage debt – has been pumped up to record levels, made possible by exceptionally low interest rates that could soon end, and he is unsure how well banks could cope with the shocks that may await.

The housing market crisis is not over.  The bailout of banks and their accomplices was just a band-aide.  The next crisis will make 2008 look like a tremor.

Source:

http://www.telegraph.co.uk/finance/personalfinance/investing/11686199/Its-time-to-hold-physical-cash-says-one-of-Britains-most-senior-fund-managers.html

Currency Collapse Could be Nuclear

There is an unease amongst us; a foreboding that something is about to happen and there is nothing we can do about it, but wait for it to come.  So-called doomsday sayers warned us about the housing bubble.  Pollyannaish prognosticators dismissed them as nothing more than rumblings from Chicken Little.  Well, we know what happened.

Lately, I’ve been reading about a coming currency crisis, and it’s not from one source.  Here is an excerpt from a post published by Zero Hedge:

So is the imminent rate hike which guarantees the ghost of 1937 is about to wake up and lead to stock losses which could make the Lehman crash seem like a dress rehearsal just the precursor to QE4, as happened nearly 80 years ago? We don't know, but neither does the manager of the world's biggest hedge fund. This is what Ray Dalio says ahead of the upcoming rate hike:

... in our opinion, inadequate attention is being paid to the risks of a downturn in which central bankers' abilities to ease are significantly impaired. Please understand that we are not sure of anything but, for the reasons explained, we do not want to have any concentrated bets, especially at this time.

We don't know either, but we do know that if the S&P is cut in half the Fed will launch not just QE4, but 5, 6 and so on, resulting in every other central bank doing the same as global currency war goes nuclear, and the race to the final currency collapse enters its final lap.

Source:

http://www.zerohedge.com/news/2015-06-15/bank-america-begins-66-day-countdown-until-terrible-ghost-1937-returns