The Law of Gravity impacts the Chinese stock market

China's yuan - a reserve currency

The IMF may be about to recognise China's yuan as a reserve currency. That's a big decision http://t.co/hXsEr6qtAd pic.twitter.com/SzOw2JbCzu

— The Economist (@EconBizFin) August 7, 2015

China's "Hot Money"

Why is this chart important? Well, China may now be sitting on a inflationary macro cycle about to get out of control.

The Financial Times has reported that China’s central bank reported that companies and individuals sold Rmb 684 billion ($109 billion) worth of foreign exchange and bought an equivalent amount of Chinese currency in January 2013 --- a record for a single month.

China warns over currency wars

via Financial Times:

China warns over fresh currency tensions 

Competitive devaluations will hurt emerging nations, says Beijing

US Administration Officials Condemn Senate China Currency Bills

WASHINGTON -(Dow Jones)- A trio of Bush administration officials Tuesday condemned Senate legislation aimed at pressuring China to change its currency regime, saying the bills amounted to the "wrong approach."

In a letter signed by U.S. Treasury Secretary Henry Paulson, Commerce Secretary Carlos Gutierrez and U.S. Trade Representative Susan Schwab, the officials said two Senate measures "would substantially weaken the position of the United States in our ongoing efforts to achieve essential economic reforms in China and around the world, while jeopardizing our rapidly growing exports that have benefited American workers and farmers."

Last week, the U.S. Senate Finance Committee approved a bill that would open the way for punishing China over monetary policy.

article::: FXStreet

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