Must-Read: Just how large is the Chinese elite’s potential demand for political risk insurance in the form of dollar assets underneath the U.S.’s legal umbrella anyway? The extremely-sharp Ken Rogoff

Ken Rogoff: The Great Escape from China: “The prospect of a major devaluation of China’s renminbi…

…has been hanging over global markets like the Sword of Damocles. No other source of policy uncertainty has been as destabilizing…. It might seem odd that a country running a $600 billion trade surplus in 2015 should be worried about currency weakness. But… slowing economic growth and a gradual relaxation of restrictions on investing abroad, has unleashed a torrent of capital outflows…. Private citizens are now allowed to take up to $50,000 per year out of the country. If just one of every 20 Chinese citizens exercised this option, China’s foreign-exchange reserves would be wiped out. At the same time, China’s cash-rich companies have been employing all sorts of devices to get money out…. Now that Chinese firms have bought up so many US and European companies, money laundering can even be done in-house…