Monday, June 1, 2009

"Chinese assets are very safe," Geithner said

His answer drew loud laughter from his student audience, reflecting skepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.

"Geithner needs to show how the U.S. can prevent the value of China’s investment from being eroded by a weaker dollar or by the inflation that might be stoked by the stimulus money being pumped into the U.S. economy", according to Yu, a ChiCom financial expert. The ChiCom financial expert said, "It will be helpful if Geithner can show us some arithmetic.... We see where you're spending $12 trillion that you don't have. We're seeing that you're going to have to print that, or that you're going to have to raise taxes on that. And either way you go, your population is going to have less disposable income, which means your population is going to have less buying power of the cheap stuff our country makes."

It looks like Little Timmy is in waaay over his head.