Confusion hits the markets as stocks, currencies, and commodities fall sharply across the region as investors fear a stalling Chinese economy and possible currency war despite Beijing’s assurances. We warned that this devaluation was NOT A FLUKE, and far too many people just misrepresent what is truly going on within the world economy so it comes as no surprise they missed this one.
The central bank of China has come out and stated publicly that they use capital flow analysis. They are far more professional than any other central bank. They took the market right up to the technical resistance. There are just too many people contriving scenarios and theories with a biased view to support what they would like to see. This neither is a currency war nor is it some wild scheme to support gold. The world economy is contracting, if not imploding, because politicians are hunting money for taxes and confiscating assets because governments are going broke.
What more needs to be said? Our forecast that the dollar would rally sharply, contrary to those who kept calling for its demise, remains intact. If you do not understand the world economy and how we are all connected, then you might as well apply for a bailout because you are going to need one.
