🔴 Why the Yuan Matters to Stocks (w/ AK)


🔴 Why the Yuan Matters to Stocks (w/ AK)

The last week has been crazy in the stock market with Monday being the biggest down day of the year China’s devaluation of the wand against the dollar seems to be the catalyst not only did it drive markets into a frenzy But it caused the Trump administration to label China as a currency manipulator. So are they right about that? And why is China’s currency so important to the global market? Well, we’re gonna dive into all of that on this week’s episode of real visions. The one thing What’s going on investors 8k here so last week China’s authorities allowed the wand to weaken to under 7 versus the US dollar which is the lowest level since 2008 and here a real vision We’ve actually been watching out for this to happen a few weeks ago Russell Clark warned that a wand Evaluation could be the Black Swan that hits global markets. And so Yeah, I would look to see At some point China says we’ll look, you know if you change in the trade rules We’re gonna change the currency rules and that’s exactly what they did Trump changing the trade rules with more tariffs and rhetorical bluster and then China change the currency rules So what does changing currency rules actually mean Clark explains it in this clip one day? we all get home on Friday and Over the weekend the Chinese go Alright that’s it Matt we’re gonna rip the band-aid off and we come in and the remin be is it nine right and Equities then open up Down fifteen on the gap, right? And then of course involved something goes For you something like that the problem then is that this huge amount of derivatives so somebody get knocked in? And they’re looking for the query. Well, that’s pretty much what happened I mean it wasn’t nine but China, let it float around seven in an earlier interview Kyle Bass called for a devaluation also, but then all I’m trying to think of this does this increase the probability now? That seven goes in the RMB and it stops trading eight eight and a half nine Because there is no conclusion. So the US has to play hardball and global growth in Chinese exports are going to suffer You know it’s this will not be determined by our government or theirs like if Again, if if all the training wheels came off the bikes We’d already be at eight or nine. Yep on the RMB. Yeah, what you’re asking is will will a trade impasse Accelerate the move. So what’s the point of devaluation from China’s perspective? well Because the economy is reliant on exports a cheaper Currency makes their products cheaper that way it’s easier for their foreign consumers to buy those products So it makes sense right Trump raised tariffs to increase the price on those products And then the Chinese devalued their currency to decrease the price again, this probably does sound like currency manipulation Hence, the US Treasury Department’s move but here’s the irony here China got that label by doing the exact opposite type of Manipulation that most people have been blaming them for doing for years As Kyle bass argued on Twitter if the Chinese stopped propping up their currency It will devalue more than 40% It’s funny that Trump doesn’t understand that the Chinese act to prop it up So fine up down sideways, we understand what we mean by manipulation. But why does it matter for macro? What I’ve noticed is the decline in the value of the RMB pretty much offsets the tariffs So if they were to increase its house by 25% to me, it’s got eight written all over it It’s just another way that I look at it. I just think that You know, they offset it as fast as they can Now what’s weird is the armies are it’s a currency basket essentially But the it seems they’re knock-on effect through the lack of trade is the euro Falls the Aussie Falls all of these things fall So it’s all it’s highly correlated as we know. So I just that’s why I’m just I’m just for me I’m just sensing that and I know you you don’t really want to go necessarily to a catalyst point But I’m feeling like there’s a catalyst point racing towards us which is a deadline that’s not going to mean anything It’s going to be a half answer because nobody can actually create an arts as Impossibles get an answer done We’ve got you said okay peak fiscal stimulus, February 23rd Well, then by the time you get to March and April and May what we’ve got is Fading I think the US economy slightly weaker than that. Anyway, we’re seeing the global economy fading We’re seeing the bond market telling us something so it’s to me it’s like, okay We’re rushing toward something and the capsule numbers look like this money Leaving China Right now and that there is something going on. So again, it seems like a lot of overall. Oh and Kyle predicted It has come to pass and the recession narrative has only grown louder because of the escalation between the you in China in the shorter-term The devaluation is bad for exporters and really anyone who fears an escalation in the trade if China is willing to let their currency devalued past a Historical benchmark simply the signal the Trump that they aren’t afraid to flex their currency muscles to win Then it really doesn’t look like that trade deal is coming anytime soon if you want to be able to track the next move in this ongoing battle or you just want to stay ahead of stories like This Chinese devaluation then stick with real business. I’ll talk to you next week You You

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13 thoughts on “🔴 Why the Yuan Matters to Stocks (w/ AK)”

  1. AK Fallible - Financial Entertainment says:

    Do you guys like the communist red I'm wearing in honor of the chinese government?

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  3. buju buju says:


  4. Huawei Apple says:

    The Chinese borrowed dollars and those dollars are worth much more today, now they are merely sending a more expensive dollar back to the US. 😉

  5. Jedi Master says:

    They didn't devalue!!! They stopped supporting their currency!!! Its at the market regulated value. Manipulation = tariffs and loud statements by the helipad.

  6. Terri says:

    I don't get it. Why call China a currency manipulator? If tariffs shrink growth, what is China SUPPOSED to do??? Luongo says the exchange rate between the two countries has to adjust because that's how it works…. anyone care to explain? Thank you!

  7. AZN Rice not Noodles says:

    Great show AK.

  8. Rof Lhard says:

    It's not about trade

  9. Uncle Putin says:

    Ditch the stupid music. This isn't a hip hop video.

  10. john jones says:

    its simple, get out of all currencies and into gold and silver and sit it out,

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  12. Carlos of the Rocks says:

    Real Vision lite.

  13. Little Moutha says:

    Anyone know about imf?
    This going tooo be goooooood!


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