The Yuan Trap – A Speculative Detour Through the Fog of Global Trade

“Regulators and bankers were using the wrong tools and the wrong metrics. Unfortunately, they still are.”

–Jim Rickards, Currency Wars

May 13, 2025 — Hypothesis for the day: Sometimes the answers you get matter less than asking the right questions. Let’s give that a whirl with a few “what ifs…”:

What if the real trade barrier with China wasn’t cheap labor, clever supply chains, or state-owned factories churning out widgets at half the cost?

What if the real barrier — the one no one dares to name in polite diplomatic company — was the yuan itself?

That’s the suspicion lurking in the minds of those who’ve been around long enough to see economic history rhyme, if not repeat.

And it’s a suspicion Jamieson Greer — former chief trade negotiator under Trump and longtime advocate for tougher trade terms — appears ready to drag into the daylight. Greer insists any future deal with China must tackle non-tariff barriers.

But what exactly are we talking about?

First, let’s demystify the term. Non-tariff barriers aren’t tariffs. They’re stealthier. Trickier. More… Chinese.

They include arbitrary food safety rules, tech transfer demands, opaque licensing procedures, outright bans on foreign firms for “national security” reasons — and, yes, currency manipulation.

That last one is the dragon in the room.

Imagine, for a moment, that all the talk of trade deficits and factory closures in Ohio were downstream effects not of wage arbitrage or environmental shortcuts, but a central bank in Beijing intentionally weakening its currency to juice exports and hoard dollar-denominated assets. A grand illusion. A monetary matador’s cape.

Every time you buy a $14 toaster, you’re playing your part in the performance.

Currency manipulation is rarely called out in public, because the implications are too profound. It means the entire framework of “fair trade” is a fantasy. It means all those tariffs and retaliatory duties are just Band-Aids on a broken bone.

Greer knows this. That’s why he’s pushing for something bigger than tariffs. Something comprehensive. Something real.

Because if China’s real advantage is not cheap labor, but artificially cheap currency, then we’re not competing with a country — we’re competing with a monetary mirage.

And it gets worse.

What if the yuan’s next devaluation isn’t just a tweak to boost exports, but a desperate attempt to manage capital flight, mask domestic weakness, or retaliate against U.S. tech sanctions?

In 2015, a minor yuan devaluation sent shockwaves through global markets. Today, with fragile liquidity, bloated debt, and a Federal Reserve still nursing a post-COVID balance sheet hangover, the next one could detonate a global chain reaction.

And markets? They won’t wait for the policy papers. They’ll react — as they always do — to the headline, the rumor, the innuendo. A whisper in the Financial Times. A speech misinterpreted in Shanghai. A Twitter post from someone with a flag avatar and too much time on their hands.

In this climate, even Greer’s quiet insistence that we deal with non-tariff barriers might as well be a klaxon.

So here’s the “what if” – the Grey Swan event – no one wants to entertain out loud:

What if the entire post-WTO global trade regime has been predicated on a silent agreement to look the other way while China juiced its currency, flooded markets with artificially cheap goods, and quietly bought up Treasurys like Monopoly money?

What if the world’s faith in globalization wasn’t ever rooted in comparative advantage, but in mutual monetary gaslighting?

And what happens when that faith runs out?

~ Addison Wiggin

P.S. Greer’s whisper may be the canary in the yuan mine. Meanwhile, gold is inching up, possibly to soar much, much higher, bitcoin is challenging the fiat system anew, and the BRICS are circling the petrodollar, and platforms like Glintpay are doing what Washington won’t — giving you an off-ramp. It’s not the headlines you need to watch. It’s the questions behind them.

“Regulators and bankers were using the wrong tools and the wrong metrics. Unfortunately, they still are.”

–Jim Rickards, Currency Wars

May 13, 2025 — Hypothesis for the day: Sometimes the answers you get matter less than asking the right questions. Let’s give that a whirl with a few “what ifs…”:

What if the real trade barrier with China wasn’t cheap labor, clever supply chains, or state-owned factories churning out widgets at half the cost?

What if the real barrier — the one no one dares to name in polite diplomatic company — was the yuan itself?

That’s the suspicion lurking in the minds of those who’ve been around long enough to see economic history rhyme, if not repeat.

But what exactly are we talking about?

First, let’s demystify the term. Non-tariff barriers aren’t tariffs. They’re stealthier. Trickier. More… Chinese.

They include arbitrary food safety rules, tech transfer demands, opaque licensing procedures, outright bans on foreign firms for “national security” reasons — and, yes, currency manipulation.

That last one is the dragon in the room.

Every time you buy a $14 toaster, you’re playing your part in the performance.

Greer knows this. That’s why he’s pushing for something bigger than tariffs. Something comprehensive. Something real.

Because if China’s real advantage is not cheap labor, but artificially cheap currency, then we’re not competing with a country — we’re competing with a monetary mirage.

And it gets worse.

What if the yuan’s next devaluation isn’t just a tweak to boost exports, but a desperate attempt to manage capital flight, mask domestic weakness, or retaliate against U.S. tech sanctions?

In this climate, even Greer’s quiet insistence that we deal with non-tariff barriers might as well be a klaxon.

So here’s the “what if” – the Grey Swan event – no one wants to entertain out loud:

What if the world’s faith in globalization wasn’t ever rooted in comparative advantage, but in mutual monetary gaslighting?

And what happens when that faith runs out?

~ Addison Wiggin

As AI clusters demand more light at every layer — from rack to package — Coherent’s share of that energy pathway increases. The startups illustrate what’s possible; Coherent ensures it happens.

As light enters the data center — step by step, layer by layer — Coherent is the most experienced and scaled name in the field. It carries the light forward.

For decades, Moore’s Law — that the number of transistors on a chip doubles every two years — was the quiet metronome of progress. It defined an era. AI just smashed that clock.

Global data center spending will hit $900 billion by 2028, Kobeissi notes. AI servers are growing at a compound rate of +41%, with the overall market expanding +23%.

Just building the facilities, not including chips or servers, now costs $43 billion a year — up 322% in just four years. There are $40 billion worth of U.S. data centers under construction right now, up 400% since 2022.

For the first time in history, the total value of U.S. data centers under construction will soon exceed office buildings.

More than a metaphor, we’re living through a civilizational shift. The upside Grey Swan event, in our opinion, is that the narrative unfolds without any political interruptions or blowouts in the currency and credit markets.

Technology is a double-edged sword. We’re still living in the long tail of a hard money, capitalist society – and reaping new technologies out of it.

But the destruction of the purchasing power of the dollar stands to create a crisis – and drive investors back to safe havens like gold.

All these rumors could work out to Intel’s benefit. That’s something no investor can know. What we can know is that the road to recovery will be a rocky one, fraught with disappointments along the way. It is all but certain that at some point, Intel stock will once again be far cheaper than it is today. And at that later date, investors will have far more information to be able to judge the likely success of the promised comeback. We’re not going to buy the rumors. We will wait for the news.

As light enters the data center — step by step, layer by layer — Coherent is the most experienced and scaled name in the field. It carries the light forward.

For decades, Moore’s Law — that the number of transistors on a chip doubles every two years — was the quiet metronome of progress. It defined an era. AI just smashed that clock.

Global data center spending will hit $900 billion by 2028, Kobeissi notes. AI servers are growing at a compound rate of +41%, with the overall market expanding +23%.

For the first time in history, the total value of U.S. data centers under construction will soon exceed office buildings.

Technology is a double-edged sword. We’re still living in the long tail of a hard money, capitalist society – and reaping new technologies out of it.

But the destruction of the purchasing power of the dollar stands to create a crisis – and drive investors back to safe havens like gold.