Currency crises are destabilizing and horrible. The current setup is the most alarming I’ve witnessed during my career. It’s not today unreasonable to contemplate China stockpiling gold and commodities ahead of a currency devaluation. Seems reasonable for Asian economies, and EM more generally, to build inventories while they have the liquidity to do so. Reasonable and inflationary. And as financial asset Bubbles turn increasingly vulnerable, a shift towards hard assets becomes all the more compelling. It has the feel of a major cycle in transition. Every reason to expect volatility is here for the duration.
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