Chinese RMB (Chinese Yuan) Depreciation: Why the 100% guaranteed win is getting realized now

USDCNH (US Dollar - Chinese Yuan Exchange Rate):
Up-move in chart means US Dollar up and Chinese Yuan down.

For the past 2 years, I had warned that China's Renminbi (Chinese Yuan) will be forced to devalue persistently and that the Chinese Central Bank has to keep flooding the Chinese economy with Renminbi. This is because:
1. Banks in China have a lot of hidden bad debts, and PBOC has to pump in liquidity relentlessly.
2. China's weak export market needs protection
3. China is still in transition to diversify its economy, particularly to consumption based, so it needs to carry on protecting its manufacturing sector and its export-reliant sectors
4. The labour market needs protection (a need to protect manufacturing industries by making exports cheap)
5. Using of monetary policy is the fastest approach to resuscitate itself
6. China has to suppress interest rate to stimulate the fragile economy, this has a selling pressure on Chinese Yuan

Lastly, point number 7:
7. China likes to use old tricks to stimulate its own stock market: liquidity flood. So, in order to have a sure win in shorting Renminbi or the Chinese Yuan, hedge funds worldwide just need to crash, dump, pound, hammer, sell sell and nothing but sell down the Chinese stock market with immense non-naked and naked shorts. Relentless naked shorts alone creates the churning that is enough to trigger margin calls among the large number of Chinese retailers and cause fear among Chinese investors. That will force the Chinese government to press the "old-tricks" button and the Chinese equities market will be rescued. With that, the RMB is automatically and substantially devalued. Even if Chinese government does not press the "save-market" button, fear drives RMB down just as well and the psychology factor (confidence) plays an important part in financial markets.

 Remember a few months ago, I had mentioned that China's Renminbi (RMB) will carry on to devalue and depreciate again despite China government reiterating, and pounding their chest so confidently, they will keep the currency strong? I also said that George Soros may not really be shorting Chinese stock market (just short term or naked shorts only), but his real focus is actually shorting the Chinese currency. Well, here you are..

<< Today's Latest News  on Chinese Yuan Devaluation >>:

http://www.telegraph.co.uk/business/2016/07/07/world-faces-deflation-shock-as-china-devalues-at-accelerating-pa/

Congrats to RMB shortists who are assured of a sure-win home run, something that I had reiterated countless times that financial markets can be a 100% sure win if one plays his cards correctly.

If the RMB continues this wave of devaluation completing the rounding bottom of USD-CNH (meaning CNHUSD topping out), it means the RMB may bring about a wave of bullish moves in Chinese stocks and stimulate stock markets in Asia-Pacific (Asia, Australia, New Zealand).

Donovan Norfolk Ang

China A50 Index, Chinese RMB and George Soros: 27 January 2016, Wednesday, 3.10pm Singapore Time

China A50 Index, Chinese RMB and George Soros: 

27 January 2016, Wednesday, 3.10pm Singapore Time

Attached above is the weekly chart of China Stock Market.

All illustrations and write-ups in the chart are replicated below, with addition of notes as well:

Do not be surprised if George Soros is still shorting the Chinese RMB and has finished with shorting the Chinese Stock Markets at the same time (shorting RMB, shorting stocks and shorting indices early, and buying back Chinese stocks and index futures now).

If Soros shorts Chinese RenMinBi, and shorts China Stock Indices and Chinese Stock Market, it is likely the indices-equities shorts are focused on short term only; it is to force down the stock market with fear and force the Chinese government to pump in massive amounts of RMB to save the market.

Hence it becomes a win on both forex side and equities-futures side. The forex market is a way bigger market, a win on foreign exchange side (shorting RMB) will be much greater than the equities/futures loss if the Chinese government were to save the market and George Soros and smart monies have not gotten out of their shorts in time.

It is unlikely that Soros and the smart money crocodiles have not gotten out of their stocks and indices shorts because they are very high profile in the media regarding China shorts now. This means they might need everyone to short while they cover and buy from everybody who wants to sell-short. They need people to sell, which explains the limelight.

RMB Shorts are expected to still be in the holding though, because it is an almost sure-winner shorts under such a dual strategy in the forex and futures-equities markets (refer additional notes below for reasons).

:: Additional Notes ::

Side-note 1:
When PBOC (Chinese Central Bank) and Chinese government comes to intervene and drive off malicious speculation, they win too. This is because they buy up cheaply, and whips losses to the late shorts; RMB may suffer a bit, but it will further stimulate Chinese exports.

Side-note 2:
If China tries to save its market, it means they admit that their economy sucks and Chinese RMB is definitely over-valued; RMB has to be hammered down. There is more money released into the financial system as well.
If China do not try to save its market, the fear will further induce capital outflow, and RMB will automatically hammer itself.

Expect RMB to weaken again. George Soros to win in forex market like his track records.

In the end who is happy? George Soros, Wolves of Wall Street, Chinese Central Banks, Bankers, Western Smart Monies, Chinese Smart Monies. All synergising with a win-win and go laughing to the banks.

In the end who is sad? The naive ones who believe what financial crocodiles say, the fools, the ones who follow the herd and jump off the cliff, the common folks, the ones who do not put on thinking caps, the hard earned money of the commoners. The retailers.

When one is brilliant like Soros, money comes to oneself. The reverse is also true.

- Donovan Norfolk Ang

Donovan Norfolk Ang

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