Print Friendly and PDF

China Yuan Move Was Expected and
More Surprises to Come – Trends Expert

By Daniela Cambone, Kitco.com
Kitco News

While the move by China to devalue its currency shook the financial world, one trends forecaster said he was expecting it, and a global market meltdown is next.

Speaking to Kitco News, Gerald Celente, publisher of the Trends Journal, said he was completely unfazed by the China news. He explained that on July 24, China’s State Council telegraphed the move when it announced a series of measures to pump up the economy and boost declining exports. “Although it wasn’t reported as such, it was clear to the (Trends Research) Institute the yuan would be devalued,” he said.

China’s yuan hit a four-year low, falling for a second day after The People’s Bank of China devalued it by close to 2%. Spot yuan in China slid to as low as 6.4510 per dollar, its weakest since August 2011. China’s central bank set its daily midpoint reference at 6.3306, even weaker than Tuesday’s devaluation.

China has been implementing economic and monetary measures to resuscitate its flagging economy. The weaker yuan will make imported goods into China more expensive. It will also make Chinese-produced goods cheaper on the world export market.

But Celente said he believes that China can’t save itself and the move was ‘an act of desperation.’ “That’s not going to get them out of this. You’ve got a bunch of rookies playing in a big game over there and they don’t know how to get out of it. They are trying to salvage the country in any way they can.”

But Celente said China is not the only problem, and other global surprises will come. “China is the canary in the equity mine shaft – we are looking at a global equity meltdown that will happen before the end of this year. And the way things are going, it may happen before the end of this week,” he added jokingly. 

As for gold, Celente said the metal is obviously benefitting from the China news. Gold futures hit their highest level in three weeks Wednesday. As of 1:34 p.m. EDT, Comex December gold was up $15.40, or 1.4%, to $1,123.10 an ounce.

He explained that gold is maintaining its value as currencies are going down. “I never bought gold as a hedge to inflation, I bought it as a hedge against global instability, about currencies being devalued,” he said. 

Celente said the bottom for gold could be $150 to the downside – noting the risk is very low. On the upside, he could see gold over $2,000 an ounce. Whether either scenario could happen this year, Celente said anything is possible. 

“The central banks have to protect the value of their currencies … but you can’t keep Mr. Ponzi alive by monetary methadone all his life,” he concluded.

China Gold Mining
Copyright 2015
All Rights Reserved
Reproduction in whole or part is strictly prohibited without prior written permission
NOTE: China Gold Mining does not itself endorse or guarantee the accuracy o
r reliability of information, statements or opinions expressed by any individuals or organizations posted on this site
PLEASE READ DISCLAIMER

This website is a
publication of the

Bull & Bear
Media Group, Inc
.

1-800-336-BULL