China alarmed by US money printing - Truckers' Trucking Forum

Carolina Thunder · **^ Top** #1 10.17.2009

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Quote:

The US Federal Reserve's policy of printing money to buy Treasury debt threatens to set off a serious decline of the dollar and compel China to redesign its foreign reserve policy, according to a top member of the Communist hierarchy.

By [LINK POSTED BY MEMBER] Only Members Can View This Truck Forum Link. , in Cernobbio, Italy
Published: 9:06PM BST 06 Sep 2009

Working for the Yankee dollar: Beijing is said to be dismayed by the Fed's recourse to 'credit easing' Photo: Reuters

Cheng Siwei, former vice-chairman of the Standing Committee and now head of China's green energy drive, said Beijing was dismayed by the Fed's recourse to "credit easing".
"We hope there will be a change in monetary policy as soon as they have positive growth again," he said at the Ambrosetti Workshop, a policy gathering on Lake Como.

"If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies," he said.

China's reserves are more than – $2 trillion, the world's largest.
"Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets," he added.
The comments suggest that China has become the driving force in the gold market and can be counted on to
buy whenever there is a price dip, putting a floor under any correction.
Mr Cheng said the Fed's loose monetary policy was stoking an unstable asset boom in China. "If we raise interest rates, we will be flooded with hot money. We have to wait for them. If they raise, we raise.
"Credit in China is too loose. We have a bubble in the housing market and in stocks so we have to be very careful, because this could fall down."
Mr Cheng said China had learned from the West that it is a mistake for central banks to target retail price inflation and take their eye off assets.
"This is where Greenspan went wrong from 2000 to 2004," he said. "He thought everything was alright because inflation was low, but assets absorbed the liquidity."
Mr Cheng said China had lost 20m jobs as a result of the crisis and advised the West not to over-estimate the role that his country can play in global recovery.
China's task is to switch from export dependency to internal consumption, but that requires a "change in the ideology of the Chinese people" to discourage excess saving. "This is very difficult".
Mr Cheng said the root cause of global imbalances is spending patterns in US (and UK) and China.
"The US spends tomorrow's money today," he said. "We Chinese spend today's money tomorrow. That's why we have this financial crisis."
Yet the consequences are not symmetric.
"He who goes borrowing, goes sorrowing," said Mr Cheng.
It was a quote from US founding father Benjamin Franklin.

It's strange that you hear this from other news sources from around the world but not from our on news media!

Mooney · **^ Top** #2 10.17.2009

The only good news for America is that the other choices the Chinese have for where to put their reserves are in just as bad, or worse shape than the U.S. Dollar.

The China bubble will have to burst eventually.

kajidono · **^ Top** #3 10.17.2009

Any system built around "excess saving is bad" will fail in my opinion. You cannot force people to spend their money, no matter how obnoxious and numerous your stupid commercials are.

im6under · **^ Top** #4 4 Weeks Ago

Quote:

China alarmed by US money printing

well duh??? lol

Quote:

Originally Posted by kajidono

Any system built around "excess saving is bad" will fail in my opinion. You cannot force people to spend their money, no matter how obnoxious and numerous your stupid commercials are.

yes you can... you simply create bailout package... spend it as you see fit... then send them the bill via IRS.

you can even buy whole cars and houses instead of just percentages of cars and houses.

think about we been doing it with food forever...

kajidono · **^ Top** #5 4 Weeks Ago

That's theft of money by the government. I'm referring to the entire market as a whole.

LooneyTune · **^ Top** #6 4 Weeks Ago

The thing is it seems that so many people are oblivious to the fact that this country is in debt for nearly 12 trillion dollars, which of course will continue to go up. China owns quite a bit of our debt. What happens if and when one day they decide to cash that check? Again this is why it is so foolish for Obama to be spending the kind of money is spending on programs and has YET to reveal how any of this can possibly be paid for.

Mooney · **^ Top** #7 4 Weeks Ago

Quote:

Originally Posted by LooneyTune

The thing is it seems that so many people are oblivious to the fact that this country is in debt for nearly 12 trillion dollars, which of course will continue to go up. China owns quite a bit of our debt. What happens if and when one day they decide to cash that check? Again this is why it is so foolish for Obama to be spending the kind of money is spending on programs and has YET to reveal how any of this can possibly be paid for.

The real debt is

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kajidono · **^ Top** #8 4 Weeks Ago

The numbers are so high that nobody can really comprehend what they are looking at.

Mooney · **^ Top** #9 4 Weeks Ago

Quote:

Originally Posted by kajidono

The numbers are so high that nobody can really comprehend what they are looking at.

Spend a billion dollars a day, every day for 156 years.

kajidono · **^ Top** #10 4 Weeks Ago

Quote:

Originally Posted by Mooney

Spend a billion dollars a day, every day for 156 years.

I'd sure like to. I tell you what, though, at the end of that I'd have a lot more coming in than going out. Mankind would be spread out halfway across the galaxy too.

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