Not since the 2008 financial crisis has communist China’s yuan currency been as weak as it is now, which has prompted the People’s Bank of China to issue a warning about a coming dollar dump and yuan buyback.
All major state-run banks in China have been told to prepare for this coming event, which will aim to hike up the failing yuan, which fell 0.9 percent to 7.1340 against the dollar this week – its worst annual decline since 1994.
So far this year, the yuan has lost 11 percent of its value, while the U.S. dollar has reached 20-year highs due to “hawkish” policies from the Federal Reserve. (Related: America’s fiat money system is nothing more than a Ponzi scheme that benefits the rich.)
The amount of dollars that China plans to sell has not yet been decided. What we do know is that the move will primarily involve state banks’ currency reserves, including offshore branches in Hong Kong, New York and London.
US Fed’s currency manipulation triggering a “reverse currency war”
There exists a psychological threshold of 7-per-dollar for the yuan that was recently breached, hence the People’s Bank of China’s new proposition. China’s hope is that it will prop back up the yuan and combat the Fed’s “reverse currency war.”
The People’s Bank of China has consistently imposed a strong bias to its currency reference rate for the purpose of supporting the yuan. The private central bank has also issued verbal warnings against speculating on the yuan, as well as increased the cost of shorting the currency.
Instead of raising benchmark rates, the People’s Bank of China has instead been easing them in an attempt to spark growth amid an economy shattered by Fauci Flu (covid) lockdowns, the Chinese real estate crash, and flailing supply chain conditions.
According to Reuters, some of communist China’s efforts to save the yuan “against an unstoppable dollar” have been successful, but will they ultimately be enough?
“Considering the strength of the dollar, we now expect (the dollar / yuan rate) to trade around 7.40 around October and November,” said SEB in a note.
This is among the more bearish forecasts, along with those of ANZ and Goldman Sachs, which predict a yuan rate of 7.20 per dollar over the next three weeks or so. Citi, meanwhile, is predicting a yuan rate of 7.30 per dollar.
Over the past month, expectations of future volatility priced into one-month yuan options have doubled. This is a sign that investors do not foresee China’s new measures to work as hoped.
The stakes are said to be high, seeing as how China is entering a week-long national holiday. Efforts to stabilize the yuan rate remain critical as the ruling Chinese Communist Party (CCP) is set to open its once-in-five-years congress on October 16.
✔️ Boost your immune system with Nutraceutical by Dr. Zev Zelenko
✔️ Beat supply chain issues and future pharmaceutical tyranny with 5 Antibiotics Delivered to Your Home
✔️ Be ready to help yourself and your family with the World’s Best Med Kit
Capital outflows are fueling financial instability across the nation, which is only being exacerbated by the weakening yuan. Foreign investors reportedly cut holdings of Chinese bonds for the seventh straight month in a row in August.
“On the monetary policy front, the weaker yuan, fueled by the wide gap between low Chinese interest rates and rising U.S. rates, makes it harder to ease policy to support China’s faltering economy, the world’s second largest,” reports explain.
“The yield gap between China’s benchmark 10-year government bonds and the U.S. Treasury for the same tenor is hovering at the widest in 15 years.”
According to Ju Wang, head of Greater China FX and rates strategy at BNP Paribas, China’s central bank must learn how to create a balance between being market-oriented and “ensuring financial stability.”
More related news coverage about the U.S.-led reverse currency war can be found at DollarDemise.com.
Sources for this article include:
Yes, We Need Your Help
I hate being “that guy” who asks people to donate because I think our conservative news network is so crucial, but here I am…
When I left my cushy corporate job in 2017, I did so knowing that my family would have to make sacrifices. But I couldn’t continue to watch the nation slip into oblivion and was inspired by President Trump’s willingness to fight the good fight even at his own personal expense. What I didn’t realize then is that conservative media would be so heavily attacked, canceled, and defunded that the sacrifices would be extreme.
Many in this nation are struggling right now even though we weren’t struggling just a few years ago. I’m not alone. But I wake up every morning and operate the sites we’ve been able to build because there’s really no other choice. I refuse to be beholden to Big Tech like so many other conservative news outlets, which is why you won’t see Google ads here. With that said, it’s often challenging to pay the bills and it’s even harder to expand so we can get the America First message out to a wider audience.
The economic downturn has forced me to make a plea for help. Between cancel culture, lockdowns, and diminishing ad revenue, we need financial assistance in order to continue to spread the truth. We ask all who have the means, please donate through our Giving Fuel. Your generosity is what keeps these sites running and allows us to expand our reach so the truth can get to the masses. We’ve had great success in growing but we know we can do more with your assistance.
We currently operate:
- NOQ Report
- Conservative Playlist
- Uncanceled News
- Based Underground
- Five other conservative news sites
I would even be willing to entertain investments and partnerships at this stage. I’ve turned them down in the past because editorial purity is extremely important. I’ll turn them down again if anyone wants us to start supporting RINOs or avoid “taboo” topics like voter fraud, vaccines, or transgender supremacy. But I’d talk to fellow America First patriots who want to help any (or all) of our 10 news sites. Hit me up at jdrucker (at) substack (dot) com if you’re interested.
For those who have the means and just want to help keep the mission of spreading a conservative, Christian message to the nation, please consider a generous donation.
Covid variant BA.5 is spreading. It appears milder but much more contagious and evades natural immunity. Best to boost your immune system with new Z-Dtox and Z-Stack nutraceuticals from our dear friend, the late Dr. Vladimir Zelenko.