Thursday, August 20, 2015

Conspiracy theory for Chinese Yuan devluation

We do not know exactly why they did it [Chinese devalued the Yuan] because 2% devaluation is not going to help exports and even a 10% or 20% devaluation is not going to help exports meaningfully in a world that is slowing down. 

My view is that the central banks around the world would talk to each other and the Federal Reserve talks everyday to the ECB, to the Bank of England, to the Bank of Japan and so forth. 

The Fed may have very well told the Chinese why don't devalue their currency somewhat. This will give the Fed an excuse not to increase interest rate in September.