The Peace Hotel in Shanghai has some very symbolic meaning in the Sino-US relationship. In China, it’s hard to understate the weight that such symbolism carries.
Built on The Bund during the glory days of pre-war Shanghai in the classic Gothic style of the Chicago school of architecture that dots much of the Puxi area today, the art deco building that housed the Cathay Hotel played host to many artisans during the brief time that Shanghai was the center of the burgeoning global entertainment industry.
Charlie Chaplin. Bernard Shaw. Noël Coward.
Shanghai was truly the Hollywood of the Orient before even Hollywood was a thing. It's no coincidence that most blockbusters even today open at a place called the Chinese Theater at 6925 Hollywood Boulevard.
Politically, the iconic building located on the Huangpu River waterfront also retains some nascent symbolism. The 1972 Communique that began this strange journey of Sino-US relations that has led China from also-ran country to #2 world economy was partially the result of meetings that were held there during President Nixon's inaugural visit. The game-changing document was signed there.
Recent meetings between Secretary of the Treasury Steve Mnuchin, US Trade Representative Robert Lighthizer, and Chinese Vice Premier Liu He here invoked memories of that Cold War era trip. The very location of the meetings had raised expectations, at least on the China side, that the talks would generate some positive momentum. That's the power of symbolism in Chinese culture.
The fact that nothing came of those meetings brings us to today.
The Chinese yuan has finally broken the critical 7 CNY/USD barrier.
#CNY7 could just be the beginning, a sign of things to come in what is shaping up to be a currency war race to the bottom. In the past, Trump tariffs have been met with equivalent CNY depreciation. I don't see how this time it's going to be any different.
It's even worse, actually, for the renminbi. Because of the capital controls that Beijing imposes to keep prices steady on the mainland, there are actually two types of Chinese yuan that we need to keep track of: CNY and CNH. Essentially, we can call these currencies onshore yuan and offshore yuan. Usually, they trade at about the same price as each other. But when there is volatility in the currency markets due to some kind of an event like a trade war, they start drifting far, far apart. Take a look at CNH in the past few days since the trade talks broke down:
How long till 7.5? Is anybody out there calling for 8 yet?
What does all this have to do with bitcoin?
For us blockchain folk, and all the fervent HODLers of the corn, we are all benefiting today from the trade spat between Xi and Trump. We all thought that the Litecoin halving was gonna spirit us away back to recent highs, but no it's the trade war that will do it.
That's because there are nearly $24 trillion worth of savings and investments in China locked up, frantically looking for a place to go on a volatile NUMBER GO DOWN day like today.
It used to be gold. Then it was property. Now it's bitcoin.
As you can see, bitcoin is surging today. And has been since the trade talks at the Peace Hotel yielded nothing.
No, it's not the litecoin block reward halving, which is now less than an hour away!
It’s politics, baby.
There is one thing we know for absolute certain.
We now have a new preferred safe haven asset.