Ok, here’s how it’s going down, or rather, inflating.

In a normal situation, where economies are fine, central banks are irrelevant. They just need to collect data and keep from stepping on thier dicks or getting it caught up in the machinery.

When things start to look bad (usually because of central bank dicks) then they get to messing around with things to try and appear to be in control. In most cases interventions usually have the opposite effects.

Now what is important to understand that central banks have only one tool to work with. Inflation. Inflation meaning they can increase or decrease the supply of currency and credit in the system. The effects of increasing the money supply (debasement) is higher prices. The effects of contracting the money supply is generally asset price deflation.

Japan has been inflating for 30 years, and because it’s an exporting country the effects of inflation weren’t too severe. Until, the imbalance in trade became negative due to their self-created energy crisis. Now high prices are a big problem.

Now enter China. Their problem is similar but different to Japan. China has enjoyed a massive trade surplus despite being a net importer of food and energy. They didn’t have to worry so much about the strength of their currency because of the huge current account surplus.

Now things are different. Chinese exports have crashed as have foreign direct investments. China’s real estate market has crashed and with massive onshore and offshore debts owed. People are out of jobs, foreign companies are leaving, and the CCP is running out of money.

So, the only thing left to do is inflation via currency depreciation. And that’s ultimately what the PBOC will do. You can see it happening every day with the midpoint peg of USDCNY being set a bit higher on a daily and weekly basis. It’s happening slowly at first, but the. It will go down all at once.

What does this mean for you?

Well products from China (probably via Mexico and Vietnam) may get cheaper. But the big thing is that with very few exceptions, all currencies will weaken against the Dollar. Rumors of the demise of the USD have been greatly exaggerated because now, everyone else is going to be debasing their currencies rapidly. Particularly countries that export

So I’d hold on to my dollars, buy some income producing assets, buy gold and silver as insurance against the still inflationary dollar. And most important of all find ways to make more money darling.

Not financial advice

Good luck

https://finance.yahoo.com/news/china-studying-implementation-pboc-bond-024435140.html