Stock Market Crash As Trump Declares China a Currency Manipulator --So What's Really going on ?

US stocks fell in the worst trading day of the year on Monday after China allowed the value of the yuan to sink to an 11-year low. The devaluation of the yuan was the latest step in the US-China trade war. It followed a threat by US President Donald Trump on Friday that the US would impose another 30 Billion in tariffs on Chinese imports. Beijing is also moving to stop companies from buying US farming products. The currency move, along with US tariff threats, sparked renewed global growth fears. The US has since said it will engage with the IMF to eliminate “unfair” competition from Beijing. Funny that this is coming from a country that can print its own currency into oblivion without much consequence because it's the world's reserve currency. Which central bank isn't trying to devalue its currency !. So The world's biggest market manipulator is eager to call others manipulators. Because China did NOT intervene after offshore yuan fell, they are called currency manipulators. Once they step in to intervene, then they are no longer manipulators. Failing to manipulate your currency in the manner we expect makes you a manipulator. Never mind that the US Dollar dominatrix racket is anything but a voluntary fait accompli. Our manipulation good, theirs bad. And of course Japan or Europe are not a currency manipulators, they are allies, our good boys. And what about the missing 21 trillion. That's hell of a currency manipulation. Every central bank by definition is a currency manipulator We are in fact The ultimate currency manipulators . Did not Greenspan say : "The US can never default on a debt, because it can issue more Dollars to pay for that debt". Actually this will give China 2 wins, exports will shoot up due to the low currency and will stop all expensive imports so the money stay at home. The extra benefit, it makes trump's tariffs irrelevant because the price of China's exports to the US lower offsetting the tariffs impact. Trump should have banned all Chinese imports if he was serious about jobs. The Exports to the US Market represent only 3 % of Chinese GDP. The Chinese economy is becoming more and more internal and consumption based. The dependence on US exports is a thing of the past. Is Europe following the US in its trade and currency wars against China ? Answer : Nope . The European economy is not good. Not in mood for trade wars. Europe rejected the desperate US orders to ban Huawei, which the US itself admits that will dominate 5G across the world and that the US cannot compete with it. China is not retreating it is doing the exact opposite , It is expanding . The 3 trillion dollar Belt and Road project to connect the rest of the world with China. On the other hand The US share in the global economy is declining, the emergent market share in the global economy is increasing, and Asia alone is estimated to account for 53 % of the global economy in 2050 . Why would anyone need the US in such a multipolar world ! And yes, emergent market growth will continue due to younger and growing populations, technology diffusion, and ongoing urbanization, which drives growth. There is no stopping that. China is already the biggest trading partner of Germany, Latin America, Asia, Africa, Russia, the Middle East, Australia, etc.And Italy just joined Belt and Road Initiative recently. China will trade more and more with the rest of the world, where growth is, and where the US can't compete with Chinese goods. And it will grow pretty good in the next 10 years, considering the fact that 40 % of the Chinese population still does not have internet access and 45 % of the Chinese population is still rural. China is now where the US was in the 1940s - there is lots of urbanization incoming, which will drive growth into the future. What happens if China bans the US from its fast growing aircraft market, soon the largest in the world, where there will be hundreds of billions of dollars for contracts for passenger jets? . Boeing is already in trouble. I see AirBus taking the lead there. Chinese are also working to replace US software and hardware chips, as well on their own passenger jets. From the looks of it, China will not need anything from the US pretty soon. Meanwhile in the real world, trade between Russia and China is growing pretty fast, the two countries are building pipelines and bridges. The Europe - China highway, via Kazahkstan and Russia is being built and will become the longest in the world. And Russia just invited Huawei to build their 5G network . In the long run, the US will lose more, as it will lose access to the Chinese market, already the biggest in the world in Purchasing Power Parity . Globalization will continue, but without the US, and it will be more Chinese centered, as China is now opening its internal market just as the US is closing its own. Now tell me why would the world want to trade more with the US if the US is putting more and more trade barriers! . Nope, they will seek to compensate the closed US market, the world will increase trade linkages with itself, and China will be at the center with that. It is called Globalization. But without the US. The corporations are and will continue to move production to cheaper labor countries like Vietnam and Malaysia. The Tariffs against China will just accelerate this process. If Trump is so serious about bringing jobs back home, he then needs to impose Tariffs on ALL imports from ALL countries - not just China.Which obviously he cannot do .







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