so now think about it - if Swiss (CHF) suddenly buy a ton of US treasuries, suddenly it will impact their currency - what do you think happens if they buy a lot of US 30y bonds?
Well, lets take a look...
Over the last week of december, it appears Swiss were selling US treasuries.
Then all of a sudden yesterday they decided (with other CB's) to BUY them back.
Every currency is a pair - USDJPY, CADEUR, etc.
DXY is different - its a kludgey ratio tht can be gamed.
Look what happened to DXY when swiss bought a ton of treasuries... (in purple)
CURRENCIES MATTER.
Now lets throw a stonk index on here - QQQ is one of the most sensitive to currencies and bond yields.
Look at that fkr jump around (orange)
Sometimes when i saw "swap" its also CB's dumping or buying bonds, just like this.
The baseball anology - from slide one.
Consider each ball a few BILLION in US treasuries.
If they sell to another CB, It skewes the DXY formula (the ratio is not even between member states).
SOME - like EU- have a MUCH bigger impact to DXY when they buy or sell treasuries.
If the SWISS were to buy treasuries from everyone, the swiss currency would get SUPER strong relative to every other member state - this would be TERRIBLE for swiss economy as a strong currncy kills your exports. npr.org/2011/08/11/139β¦
So what these CB's are doing is COORDINATING;so no 1 member state has a currency that is too strong or too weak - a weak currency creates an unfair advantage
When you go shopping/vacation, you go where the opposing currency is CHEAP relative to your own.
Stay with me - you will like this, but its complex....
Genomics is the study of DNA, and the RELATIONSHIPS (pay attn to that) of those genes and how they interact with each other.
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DNA is like the instruction manual for building that castle. It tells your body how to grow and what it should look like. It's like a super long, twisty ladder inside tiny parts of you called cells.
Genes are like the special LEGO bricks in the instruction manual. Each gene has instructions for a specific part of you, like your eye color or how tall you might grow.
In a currency war, you win by out "devaluing" your currency vs your trading partner.
You do this to gain market advantage - your products become CHEAPER than your competitor, killing your competitors industry.
The white line is china - when the white line goes up (9 of them) china devalued.
Notice that giant plunge near #4?
Notice the yellow line - thats global liquidity - and its inverted - so you can clearly see central bank interventions and its impact on the chinese currency.
G7 loaded up on debt, and out china'ed china....
Lately they stopped - because inflation now is raging.
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Remember - currencies are a RATIO.
So when chinas currency goes up on this chart - it gets WEAKER relative to USD.
Which means the USD gets STRONGER.
Stronger USD = bad for US exports, particularly to china.
It means China wins global trade vs US because everything is so cheap.
Tariffs equalize trade and offset this nonsense.
Tariffs make this cheap chinese export due to currency games less competitive.
US cannot control what china does, but it can control what it imports from china.