Soros’s Lemmings in Mass Charge on China’s Currency, New Silk Road

One week after London agent and international drug-pusher George Soros announced he was taking a large short position against China’s currency, a veritable horde of “prestigious” hedge fund managers have dropped everything to join the attack.

They might have been looking for a reason to drop everything and go to war with Soros: what Bloomberg called “Top investors Kyle Bass, David Tepper and Bill Ackman” have all been top losers of investors’ money in the past year. Ackman has made bets on price-gouging pharmaceutical companies which have lost him plenty. Bass, after acknowledging his “worst year in a decade,” has sold off 85% of the assets of his Hayman Capital Management Fund, to throw everything into attacking the Chinese yuan. And there are at least a half-dozen other large funds following Soros into battle, including Carlyle, Nexus, and others.

Recall that just one year ago, the lying Soros shouted that Europe needed a “$20 billion war chest for war against Russia” (in Ukraine). Now, he thinks that cooperation with Russia in Syria may be necessary, but is going to war with China over its currency.

This attack is, in effect where not by intention, a war against China’s “win-win” New Silk Road investments in infrastructure across Eurasia, Africa, and South America. The hedge funds are trying to accelerate capital flight from China — already at least $600 billion net in 2015 — and make it spend more of its foreign reserves to keep the currency stable and control that flight. The more reserves it must spend this way, the more difficult its massive infrastructure and development lending.

The Chinese government and People’s Bank of China are, however, quite ready and armed for this battle with Soros et al., and have said, “They will lose.” In the first week of the attack, the yuan’s value has actually risen slightly against the dollar. The PBOC has reinstituted capital controls, and recently stopped Hong Kong-based speculation against its economy by a ferocious liquidity squeeze on yuan trading by (British-origin) Hong Kong banks. Soros and company think they will do better, but may short themselves into a trap. It is to be hoped their 2015 losses were nothing compared to those they are walking into now.