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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts
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To: roto who wrote (10465)10/30/2020 12:45:01 PM
From: Sun Tzu2 Recommendations

Recommended By
ajtj99
KevinKT

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China has been encouraging short selling of RMB :-O. They really are not happy with it going so high, but ironically they have been reluctant to open up their bond and currency markets because of the US.

The opening will happen (at a moderate rate) because they don't have a choice. It may surprise you to know that China (including HK) has been the number one IPO market of the world this year; 54% of global IPO capitals have poured into Chinese stock markets. Furthermore, the opening will help protect them against volatility.

When China opens their bond markets, the treasuries will take a serious hit and the Fed will be forced to buy more. Somewhere in their thinking, China must be worried about US imposing capital restrictions on investments in China and possibly refusing to honor the $1T in treasuries that China holds. I think this is as much if not the greater incentive for them in "manipulating" their currency than their current account.

But once they make up their mind and start opening up, it will be the beginning of the end of USD as a reserve currency and that will make a huge dent on the treasuries.
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