“It is better for China, it’s better for the world and the United States if China allows its currency to appreciate more rapidly,” thus spake Lord Treasurer, er, Secretary of the Treasury, the honorable Mr. Tim Geithner after a summit in Honolulu yesterday.
Recall Mr. Geithner, on his first visit to China as Treasury Secretary in June 2009, assured a roomful of students that their government’s investment in US Treasuries was rock solid.
“Chinese assets are very safe,” Geithner declared. The statement elicited “loud laughter” from the assembled crowd, according to accounts at the time. Ever since, he’s been in a snit about China.
In Honolulu yesterday, the 21 finance ministers whose nations make up the Asia-Pacific Economic Cooperation (APEC) gave appropriate lip service to goals like “strengthening economic growth” and “making growth more balanced.”
Then, Mr. Geithner stated his position: “This process of rebalancing will be aided by exchange rate policies in China and other Asian economies that allow their currencies to adjust in response to market forces,” he asserted to reporters after the meeting.
“China, in particular, must continue to allow its currency to strengthen, and China has acknowledged the importance of faster exchange rate adjustment.”
The US agency over which Mr. Geithner presides owes $1.137 trillion to China. His co-conspirators at the Federal Reserve have stated their target interest rates will remain near zero through mid-2013.
And still… the Treasury Secretary is not above wagging his finger at the Chinese. They ought to allow their currency to “adjust in response to market forces” he says.
Heh. You have to admire the man’s hubris.
Addison Wigginfor The Daily Reckoning
Addison Wiggin is the executive publisher of Agora Financial, LLC, a fiercely independent economic forecasting and financial research firm. He's the creator and editorial director of Agora Financial's daily 5 Min. Forecast and editorial director of The Daily Reckoning. Wiggin is the founder of Agora Entertainment, executive producer and co-writer of I.O.U.S.A., which was nominated for the Grand Jury Prize at the 2008 Sundance Film Festival, the 2009 Critics Choice Award for Best Documentary Feature, and was also shortlisted for a 2009 Academy Award. He is the author of the companion book of the film I.O.U.S.A.and his second edition of The Demise of the Dollar, and Why it's Even Better for Your Investments was just fully revised and updated. Wiggin is a three-time New York Times best-selling author whose work has been recognized by The New York Times Magazine, The Economist, Worth, The New York Times, The Washington Post as well as major network news programs. He also co-authored international bestsellers Financial Reckoning Day and Empire of Debt with Bill Bonner.
And then there’s Paulson offering his ‘principles’ for both the US and Chinese economies (this in a recent edition of “China Daily”)…first, “unlocking the promise of capital and cross investment” and then “assuring financial markets are transparent and have strong oversight.” Talk about hubris.
Since we import everything from China and let the yuan appreciate it will cost more for us to buy Chinese products. On the other hand we don’t export anything that China wants so it seem a loss loss situation for us with ever wider trade deficit.
The fed is the enemy to defeat. Now we know who to target. All the fed chairmen that have been and the banksters. They have looted latin america and still are. Im latino and im enraged for what they have done. Our countries still hold worthless dollars as ”reserves”.
Come on now chowthen. We export a single copy of all Microsoft products to China. They know how to share better than we do.
The Chinese minister of finance did not say a word. But I can imagine the following:
Mr. Geithner lectured us again on economics. He said China should let our currency ‘subject to market force’, i.e. subject to US dollar manipulation. How about this: We will open our currency to international trading to the same degree as US reduce its deficit financing from borrowing from China.
Tax the rich.
Pay your bills, America.
Let Uncle Sam pay your bills.
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