Currency War?

A second devaluation of the Yuan could spark a world wide currency war very easily. So, many people around the world are nervous of this because if you have investments in one currency in one country and the value of that currency goes the wrong direction for you, you have just lost whatever percentage of your investments that that currency just devalued.

For example, the Chinese Yuan just devalued 1.9% or more just the first day. Let's say this is 2%

If you only had 1000 Yuan invested then you only lost about 20 yuan in value. But, what if you have 10,000, 100,000 or 1,000,000 yuan invested. Then you just lost 2% of whatever your investment was and there would be no way to recover that.

But, this is also true of people who have yuan under their beds at home or just in savings in a bank. Everyone in China just lost 2% of their wealth. And this is true of 1.4 Billion people now and that doesn't include the Americans and other foreigners who had invested in China in various ways.