China sinks

The Chinese central bank have devaluated again with 1.6%. With the last adjustment we find China making their Yuan 3.5% weaker than the US dollar.

Like we wrote yesterday: This might be an adjustment towards a currency guided by the market OR a strategically adjustment of the economy. If it is a strategically move we will see more changes in the near future counting at least 6.5% more devaluation.

 

The result of this adjustment is that China sells cheap, but buy expensive, making the Chinese exportation increase. As we know the Chinese export has become reduced the last months. The main problem in China is the inland activity and the export. Most visible are the stock market and its bubble that have created a lot of debt among commoners. China do not suffer from the same problem as Greece that is unemployment and a reduced market in general.

 

Let us follow China.


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