Must-read: Gavyn Davies: “China devaluation – a necessary evil?”

Must-Read: Gavyn Davies: China devaluation – a necessary evil?: “The 9 percent drop in global equity prices in the first two weeks of 2016…

…is certainly alarming, even for those of us who believe that the outlook for the world activity has not deteriorated much recently. The fundamental cause is the same as it was last August – a clash between a severe loss of credibility in Chinese economic policy and a Federal Reserve that still seems determined to continue tightening US monetary policy without much regard to international risks and a slowing domestic economy (see the hawkish Bill Dudley speech on Friday)…