Here we go again.
My good pals over at Zerohedge have declared Armageddon in the form of Chinese currency collapse, due to the recent skid in the Yuan. While it’s true, leverage is leverage and if carry trade participants are in deep with the Chinese shadow banking system, the recent decline might prove to be somewhat eventful for them. I’d be remiss if I didn’t point out the larger picture here, which is the integrity of the currency itself, versus the dollar.
While it’s true, over a 1-6 month time frame the Yuan is weakening versus the dollar. Over a longer time frame, however, you can see this is merely child’s play, a blip of sorts. I am saddened to learn some suckers are getting crushed in this Yuan carry trade unravel, just like I was heart-broken over the numerous Yen carry trade unravels that have taken place over the past decade. In the end, this trade goes nowhere, unless of course there are events beyond the Chinese control that turn this correction into a rout.
Pardon my calmness, but this isn’t a collapse. A move from $6.05 to $6.20 doesn’t even warrant a headline.
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Zero Edge… pure pollution that caused me to sit on the sidelines in days of yore….
Agreed. Trying to find a correlation to this “collapse” is hard. Other than Dr Copper shitting itself. Anything else affected?
Found a couple. Nikkei down, Gold miners up. Both lagging this last move. Could be this is it for the “collapse”.
@UncleBuccs I hear you. I bought into their gloom for a while and still suffer with underwater fiz gold and silver. Now I find the extremes and know that truth lies somewhere in between.
On the fly/OA discussion topic. Say you uncover a magical stock genie who grants both of you that your largest equity holding performs a hundy roll, but you have to double team Yellen. Do you go thru with it? Which one deals with her teeth?
That is quite the conundrum.
The Fly is God
not really, his latest pick is down 15% this week