China has crossed the renminbi-con.

The value of China’s currency, the renminbi, has weakened past seven renminbi to one U.S. dollar. If you wished to buy an American dollar with China’s currency, in other words, it would cost you more than seven renminbi. (At press time, it cost 7.05 RMB.)

Why does this matter? For years, official policy in Beijing held the line under seven, keeping the nation’s currency from deteriorating beyond that (somewhat arbitrary) psychological threshold. As of Monday morning, the currency’s value breached the self-imposed limit—something that has not occurred since the global financial turmoil of 2008. The event—a seemingly minor devaluation—signals a major ramp up in the trade conflict between the world’s two superpowers, and it demonstrates how states can turn their currencies toward macroeconomic combat.

Consider how a weaker renminbi might tilt trade to China’s advantage. In such a scenario, a Chinese exporter could cut prices, listed in U.S. dollars, and yet continue to reap the same amount of renminbi in sales as it did pre-discount. So, say you’re a factory in Guangzhou used to pulling in 700 renminbi on $100 worth of electronics; at the present rate, you would bring in 705 renminbi on $100 worth of those same electronics—a slight edge that could help to offset the impact of higher tariffs, which U.S. President Donald Trump has indicated he plans to levy.

If Beijing continues to allow the renminbi to weaken, the strategy will almost certainly come back to bite the Middle Kingdom. Inflation could rise. Consumer spending could drop. Money could take flight overseas. The currencies of neighboring countries could face similar markdowns. Commodities, such as soybeans and oil, could become more expensive to purchase. And paying down debt to foreign lenders could become more expensive. These are all possible negative knock-on effects.

Investors, fearing the worst from such geopolitical brinkmanship, are responding by de-risking. So far, the S&P 500, the Down Jones Industrial Average, and the Nasdaq Composite have all suffered their worst drops of the year.

Like Trump’s proposal to boost tariffs, Beijing’s willingness to indulge the renminbi’s decline represents a weapon in the U.S.-China trade skirmish (which is looking more pessimistic by the day). In a post on Twitter, Trump accused China of currency manipulation, and called it “a major violation which will greatly weaken China over time!” The People’s Bank of China, meanwhile, blamed U.S. policies for the price movement and Yi Gang, the central bank’s governor, asserted that China will “not engage in competitive devaluation.”

All this tumult is, of course, feeding interest in cryptocurrencies, an asset class whose boosters claim to be decoupled, mostly, from the vagaries of nation state strife. To wit: Bitcoin’s price rose as much as 15% on Monday.

The die has been cast, as an old Roman once said.

Robert Hackett | @rhhackett | robert.hackett@fortune.com

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DECENTRALIZED NEWS

To the Moon… The Fed cuts interest rates. London Stock Exchange buys Bloomberg-rival for $27 billion—and market data is hot. Wall Street is in a tech race. Walmart files patent on so-called stablecoin tech. Blockchain debuts cryptocurrency exchange. DARPA explores blockchain tech. 85% of Bitcoin has been mined. SEC OK’s Ethereum game tokens. There’s a CBD Bitcoin gym

…Rekt. HSBC CEO gets the axe—and the bank prepares for thousands of cuts. Citi cuts hundreds of trading jobs. SEC scrutinizes mutual funds backing unicorns. FBI investigates possible breaches related to Capital One. Suspected Capital One hacker threatened mass shooting. As trade tensions ramp up, investors are fleeing emerging market stocks. Stocks are overpriced. Maybe Facebook’s Libra will never launch?

Plus, an invitation for your consideration… Help us! We’d love your confidential feedback on our product and platforms as we build the new FORTUNE. Join our Global Advisory Panel here.

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Recession watch. In the latest installment of our new video series, The Future of Money, CEOs, tech executives, and bankers opine on the possible, eventual end of the U.S.’s record-breaking market boom-times. Hear from the CEOs of Western Union and Silicon Valley Bank as well as execs at Goldman Sachs, American Express, and IBM as they weigh in about the likelihood—and severity—of an economic slump.

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33%

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“We love you, Bitcoin.”

So professed Jack Dorsey, CEO of Square and Twitter, on the former company’s Friday earnings call. Square’s Cash App, a Venmo rival, brought in $260 million of revenue in the latest quarter, roughly half of which was attributable to Bitcoin, which people can purchase through the app. Analysts argue whether Dorsey’s infatuation is “innovative” and “brilliant” or “much more hype than its worth,” as Yahoo Finance reports.

FOMO NO MO’

IOU. The New Yorker published an excellent yarn on the history of money in its early August issue. One question the piece ponders: How did “fractional-reserve banking,” the ubiquitous practice of lending more than one backstops with reserves (a major bugaboo of Bitcoinnoisseurs), move from the fringes of finance into the realm of mainstream national policy? To answer that, we must first look to a wily Scotsman and the profligacy of French monarchy.

[18th century Scottish banker John] Law thought that the important thing about money wasn’t its inherent value; he didn’t believe it had any. “Money is not the value for which goods are exchanged, but the value by which they are exchanged,” he wrote. That is, money is the means by which you swap one set of stuff for another set of stuff. The crucial thing, Law thought, was to get money moving around the economy and to use it to stimulate trade and business. As [his biographer James] Buchan writes, “Money must be turned to the service of trade, and lie at the discretion of the prince or parliament to vary according to the needs of trade. Such an idea, orthodox and even tedious for the past fifty years, was thought in the seventeenth century to be diabolical.”

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