Currency markets are breaking

The Yen, Chinese RMB and Euro all breaking
Sep 21, 2022
Copy Share Link
image

Currency markets are breaking:

Currency markets are breaking.

The Bank of Japan has kept yield curve control at 0.25%.

This means that the BoJ has unlimited buying power in buying Japanese bonds.

This increases inflation in the country and makes everything in the local currency more expensive.

It imports inflation from the US into the country.

The BoJ is one thing, but now the Chinese RMB is breaking.

Look at this.

The Chinese RMB breaking the 7 mark is disastrous.

China has been known to keep it’s currency artificially low to prop up its exports so it makes it cheaper for other countries to buy the goods they produce.

With the Chinese RMB going higher, it causes massive local inflation.

Add that to the popping of the biggest mortgage bubble in history, their zero Covid policy and a falling market and you have a powder keg on your hand.

When currency markets blow, all hell breaks loose.

The Fed seems set on breaking inflation domestically, no matter how much pain they have to handle.

Let’s see.

Let’s see how quickly other currencies break before the Fed resorts to QE and massive stimulus again to save the existing systems.

Long Term Capital Management in ‘98 broke up because of the Asian currency crisis that started in Thailand as many countries were forced into devaluing their currency bringing on a massive financial crisis.

That could be coming along with the bursting of the everything bubble.


China could devalue its currency once again, only this time they’re dealing with many other issues.

And we haven’t even talked about Europe.


The Euro is finished.

There are too many countries with different cultures, ways of spending and debts that can’t all be financed by Germany and France.

It’s trading less than par with the US dollar, something that hasn’t happened in decades.

It imports inflation into Europe while making American travelers happy to visit.

Never thought in my life I’d be paying attention to currencies, yet here we are.

It’s scary.

Currency crises are breaking.

'Keep Going You're Doing Great'

Related Posts

Personal Writings

What's important to you?

Week 29/31: An eventful week of weddings and reflections from week 28

July 21, 2025
Personal Writings

Expect a lot of your stuff to suck

Expecting failure, increasing your chances of success and doing it for you

February 12, 2022
Personal Writings

Follow the incentives

Too much leverage, inflation and the global reserve currency

May 10, 2021
Personal Writings

People are noticing the rising costs

3 separate people in my life talking about the rising cost of living

May 24, 2022
Personal Writings

I got Chris Rock'd

My experience getting slapped across the face by a groom at his wedding

May 26, 2024
Personal Writings

Pick something that bugs you and fix it

Fixing your surroundings, focusing on what you can control and letting go

August 20, 2022