It’s Official: The Currency Wars Are Here

Yesterday, China devalued the yuan against the U.S. dollar, pushing the exchange rate between the two currencies to an all-time low level over 7.14 (meaning each U.S. dollar is worth over seven yuan).

This is a MASSIVE deal.

First and foremost, this has never happened before. Ever since China entered the World Trade Organization (WTO) in 2001, the country has stopped its currency from devaluing too aggressively against the U.S. dollar.

At times, this has required China to intervene in the currency markets to prop up its currency (blue circles in the chart below).

Historical Instances of China Propping up the Yuan

China did this as an act of “good faith” with the U.S., stopping its currency from collapsing and exporting deflation into the U.S. financial system.

Not anymore…

China Sends “Warning Shot” to the U.S.

China let the yuan breach the all-important level of seven against the U.S. Dollar yesterday as a “warning shot” to the Trump administration that China is done playing around.

This is why stocks collapsed yesterday – falling almost 4% in a single day. It was only through direct intervention that the market bounced in the late afternoon, shown below.

Fed Tries to keep stocks from Falling

As a reaction to this, the Trump administration officially labeled China a “currency manipulator” for the first time in 25 years last night.

What does this mean?

The currency wars are officially here. Going forward, countries will be weaponizing their currencies against one another.

Moreover, the two largest economies in the world – the United States and China – are not openly hostile towards one another.

This will have profound implications for the financial markets. We will see crashes as well as “rip your face off” rallies.

Those who are able to accurately trade this environment could generate literal fortunes.

In fact, I’ve spent the last six months developing a trading strategy to profit from central bank interventions.

In the last month alone, we’ve seen gains of 67% in two days’ time, 75% in five days’ time, even 100% in four days’ time.

And we just two new winners on Monday: a 15% gain and a 16% gain that we only held for four hours!

To find out more about this incredible system…

Best Regards,

 

Graham Summers
Editor, Money & Crisis

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Graham Summers

Editor Graham Summers has spent the last 15 years building a reputation as one of the most sought after and highly respected investment strategists on the planet. His work has been read and quoted by former Presidential advisors, award-winning institutional analysts, U.S. Senators, and more. He’s one of the few analysts on the planet to...

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