I'm sure that today more Chinese eyes will be one the stock exchanges then on some small islands. There was much talk about the possibly superior ability (compared to decadent western democracies) of the pseudo-commy dictatorship to manage it's economy. So will the Chinese leadership show economic sense and, hm , leadership?
The markest around the world have not exactly become calmer after the confusing Chinese devaluation which Krugman compared almost two weeks ago with a first bite into a cherry.
Are you staring to have the feeling that when it comes to economic policy Xi-who-must-be-obeyed has no idea what he’s doing? [Quite a bit more seem to share that feeling now]
....
This is what Charlie Kindleberger used to call “taking the first bite of the cherry”. (Nobody takes just one bite out of a cherry.) China has now demonstrated that its currency peg is no longer solid; but it has come nowhere near to devaluing enough to create expectations of future appreciation. This is a recipe for convincing investors that the future direction of the currency is down — which means that capital flight will accelerate (and apparently already has.)
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