CURRENCY WAR: THE YUAN FALLS AND RISES BITCOIN
Start dancing in the markets. The yuan, the official currency of China, has starred in a day of infarction, collapsing to levels of $ 7 per monetary unit. These figures had not been seen since 2008, times when China was launched as a promise of the new world economy.
Analysts have interpreted this event from different prisms. On the one hand, there are those who believe that this maneuver is orchestrated by the Chinese government, in response to the new tariffs imposed by the US last week; On the other hand, there are those who defend that this fall is caused by the market, given the growing economic and geopolitical tensions.
Be that as it may, two facts are indisputable. The US imposed new tariffs on China and the Asian giant will stop importing US agricultural products.
How will Chinese savers react? Despite the strict capital control policies imposed by its government, the Chinese moved towards currencies such as the dollar or Bitcoin in the past devaluation of 2015-2016. Today, with more economic uncertainty and a greater currency fall, it is It is possible that Chinese citizens decide to undertake capital flight.
China is today the locomotive of world growth, and the fall in its currency has affected other markets internationally. In the air is the possible birth of a currency war, as the US can respond to the devaluation of the yuan with the devaluation of the dollar.
A perfect storm for the world economy.
Gold and Bitcoin have already reacted to these movements. In the case of cryptocurrency, it quotes at $ 11,800 at the time of writing these lines. Gold has also noticed in its price the joy of uncertainty. As for possible returns, one should highlight the greater potential of Bitcoin, since its capitalization is today 40 times lower than gold.
Anyway. We will be watching the development of the commercial war ... and I know if that mutates in currency war. It is not because they are alarmist, but when states enter into this drift, they usually resolve their disputes through armed conflicts.
History will dictate sentence.