Mao or Deng—Xi’s yin and yang: The Chinese yuan looks good long term 

I have been quite critical of China for a while. I was firmly aboard the crisis bandwagon. But I may soon be jumping off (maybe that capitulation alone suggest crisis is near). Be that as it may, just as the dollar doom and gloom crowd has been consistently wrong about the “dollar’s demise,” people like me been wrong when it comes to China’s “pending crisis.”

….read the whole .pdf HERE

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It’s clear now that the equities markets in Canada, the U.S., and Europe are getting spooked about the situation in the Emerging Markets.

One of the focal points has been on the currencies in the Emerging Markets that appear to suffer whenever there is more attention on the “Tapering” of the U.S. Federal Reserve’s Quantitative Easing (money-printing).  These markets were major beneficiaries of QE as indicated by the growth in their Current Account Surpluses whenever the Fed created liquidity over the past couple of years.  Amusingly, the politicians in the Emerging Market Countries complained that there was too much capital flowing into their economies as the Fed printed money.  I wonder if they are familiar with the old saying “Be careful what you wish for.”

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