Hedge fund manager Kyle Bass, in a CNBC interview, essentially confirmed the point I made in this morning’s video commentary:
“What’s happening in China is they have to have dollars to sell to buy their own currency to hold it up. If they were to ever free float their currency, I think it would drop 30% or 40%”
Ironically, this afternoon the U.S. Treasury officially labeled China a currency manipulator (i.e., saying they’re lowering it to gain an unfair trade advantage), sending the Dow future contract down another 500 points in the after hours, by the way. When, in reality, they’re having to go to great lengths to keep from devaluing.