Asian Crisis 2.0

2015: China Reserves vs M2 Worse Than 1997 Asian Crisis

China's ratio of reserves to M2 fell to about 8.25 percent in August. They don't have much in the way of free cash to defend the currency because most of those reserves are needed for the economy and financial system. Maybe they have 1 to 2 percent. As the chart above shows, Thailiand was above 20 percent when the Asian Crisis kicked off. To get back to a 10 percent reserve to M2 ratio, the yuan has to devalue to USDCNY 8.5, a drop of about 18 percent.

Not predicting, only letting you know that if a ball gets rolling in the FX markets it can roll very far. If it happens, there will be a small window for nimble traders to put on trades that could make a fortune. Even if no trade, the idea that there is some currency defense coming...they're locking down cities but leaving export factories open for a reason.