I admit reading a little to much Zero-Hedge and other bearish blogs recently.
Obviously, it is very hard for anyone to get a clear view of where the hell the world is heading. You’ve got the hyperinflation gold bugs. Then you have the Ray Dalios of this world who are talking about the most “beautiful deleveraging” in recent history.
The graph in the following link shows a situation that has been known for some time now, which is that China (in this case, but this seems to apply to many US creditor countries) is diversifying away from U$ assets :
I have heard many times that it isn’t as bad as it seems, as China would continue to hold and buy U$ debt, because it can’t allow its currency to appreciate against the dollar.
Now, China has just reported a trade deficit (for the first time in [?] years) , and seems to be shifting away from its hugely export-based model.
Wouldn’t that mean that they are in fact going to start dumping their U$ financial assets and let the yuan appreciate ?
Why is nobody freaking out ? What am I missing here ?
Txs 4 insight.