Written by Shadow of Truth.

In 1979 the European Exchange Rate Mechanism (ERM) – a precursor to the euro – was established. The ERM created a semi-fixed currency exchange rate mechanism among the European members of the system which was anchored to the Deutsche Mark. By 1992, less than two years after England joined the ERM,  it was obvious to interested observers that the British pound had become significantly overvalued relative to the Deutsche Mark.

At the time, England had a large current account deficit and was experiencing a nasty recession. Although he British Government was committed to maintaining the BP’s peg to the Deutsche Mark, George Soros, in what became billed as “the trade of the century,” began to accumulate a large bet against the pound. After wasting billions in taxpayer funds trying to support the pound, the British Government eventually capitulated by exiting the ERM and the market forced a nasty revaluation of the pound. Soros ended up netting over a billion dollars in profits. (For the record, it has been speculated with valid source documentation that the Rothschild family was behind Soros’ attack on the British Government/Bank of England).

Let this be a lesson in price-fixing, as the only thing accomplished by the British Government’s endeavor was a massive transfer of wealth from taxpayers to George Soros & Co. and likely even more to the Rothschild family. Price fixing markets always fails eventually.

Fast-forward to the present and we find Soros now attempting to profit from what looks like a methodical, strategic devaluation of the Chinese renminbi (yuan) by the Chinese Government.

But there’s a big difference between England circa 1992 and China 2016. China is running a massive trade surplus, it’s the world’s largest importer/exporter and likely sports the world’s biggest GDP. It’s financial condition is reinforced by $3.3 trillion in foreign currency reserves. It can be argued that China is on the ascent to become the next world superpower.