Chinese Economist Tells China to Stay Out of US Treasurys
Courtesy of Jr. Deputy Accountant
It’s sort of funny if you stop to think about it: here the US is saying we need to gut and replace a metric shit ton of McMansions stuffed with Chinese drywall and on the other hand have China bitching about the “unsafeness” of US Treasurys.
Listen, ask Tim Geithner how much of his assets are invested in T-bills. That’s where you find your answer (and try not to laugh like the Chinese students who cackled after his comments about a strong dollar in June 2009)
China should be cautious in buying or selling huge amounts of US Treasury bonds due to the inherent risks they pose, Cheng Siwei, an influential economist, said on Wednesday, suggesting that the suitable ceiling for the nation’s foreign exchange reserves is $800 billion.
“The country should diversify its currency portfolio for foreign exchange reserves and reduce the share of US dollar-dominated assets for risk control purposes,” said Cheng, the former vice-chairman of the Standing Committee of the National People’s Congress, in a speech at Fudan University.
The nation’s foreign exchange reserves, the world’s largest, climbed $453 billion in 2009 to $2.4 trillion. China is also the largest owner of US Treasury securities and held $889 billion of the securities by the end of January this year after scaling it down from $894.8 billion in December 2009.
So wait a second, how are we supposed to fund Obamacare AND put back all those IOUs we stuffed into the “Social Security Trust Fund” that never actually existed except on paper?
Print, Zimbabwe Ben, print!
