China Tells U.S. To Put Fiscal House In Order.

elleng

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Thu May-20-10 12:04 AM
Original message

China Tells U.S. To Put Fiscal House In Order.

Sovereign debt troubles in Europe underscore how important it is for the United States to control its own borrowing as its indebtedness reaches concerning levels, a senior Chinese official said on Thursday.

With China facing criticism for holding its currency in a de facto dollar peg, assistant finance minister Zhu Guangyao shifted attention to Beijing's own worries about U.S. policies, especially its soaring deficit, ahead of high-level bilateral meetings next week.

http://www.nytimes.com/reuters/2010/05/20/news/news-us-china-usa.html?ref=reuters

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jtuck004

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Thu May-20-10 01:02 AM
Response to Original message

1. Because if the dollar gets soft their goods get more expensive. Good for the U.S.

up to a point, and bad for China.

Frankly, if they want to hold their currency low, maybe dropping a Trillion dollars on Main Street (hey, we did it for Wall Street) and running up the deficit might be the way to strengthen this economy. It would sure help manufacturers here.

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girl gone mad

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Thu May-20-10 01:33 AM
Response to Reply #1

4. They've already dropped more than a trillion dollars on their "Main Street".

Also, what makes you certain the yuan would rise if they de-pegged it? I hear people say this all of the time, but the best actual analysis that I've read shows it more likely to fall vs. the dollar.

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jtuck004

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Thu May-20-10 02:13 AM
Response to Reply #4

5. Sorry, I didn't mean to insinuate that. Rather, the talk has been

that they are keeping it artificially low. What I meant to say is that if they are not going to act we should go ahead with our deficit spending, not worry about trying to induce them to "do something". If they keep it where it is, the dollar should fall in relation to the yuan and make their products less attractive. If they don't, and it goes up, that's ok as well. If it drops, then we will see what happens. I just don't think we should wait on them to do what we want for the good of our country, since that is likely not first on their priority list, as it shouldn't be.

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notesdev

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Thu May-20-10 01:06 AM
Response to Original message

2. They are ones to talk

Maybe we should peg our currency to theirs? Reinstate slave labor and eliminate all pollution and worker treatment regulations and rules so we can compete with them? Build huge empty cities for the sake of padding GDP numbers?

At least our housing bubble has already popped.

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jtuck004

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Thu May-20-10 02:16 AM
Response to Reply #2

6. Actually we may have another housing problem on the way. The

stimulus for home purchase has ended, and the charts that have been posted here over the past month or so show a large number of 5 year ARMS that will be resetting from September through January at the end of this year. And in the same time period next year as I recall.

could get interesting...

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notesdev

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Thu May-20-10 02:20 AM
Response to Reply #6

7. It's not another

it's the same one, just continuing to bleed because the government is throwing immense amounts of money into propping up housing prices (while at the same time continuously bailing out Freddie and Fannie which allegedly exist to make housing "affordable").

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notadmblnd

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Thu May-20-10 01:07 AM
Response to Original message

3. And one way to do that, is to take our manufacturing busnesses back from China

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