China's Wen Worries about Safety of Treasuries, Asks for Reassurance

and a brilliant suggestion by one of her commenters for playing this at the opening ceremonies of the G20 meeting.

reason President Obama told Prime Minister Brown he wasn't looking for 'committments' to come out of the G20 London Economic Summit

Prime Minister Brown expected Obama to support him. British voters are disgusted with Brown's term in office. Obama is too smart to do anything that would harm his relationship with China. Gads...Brown was so fawning yet demanding when he came to the Whitehouse.

Wen's worried about the United States ability to back their treasury holdings? What on earth would they use other than crank the presses up a little more? :-) Wen realizes they're broke! And so too is the UK...just another reason why Obama rejected Brown as a bosum buddy. There just aren't any cabins left on the US ship Titanic for those like Brown that can't afford to pay their passage and instead need life preservers thrown to them.

... these pronouncements voicing "worry" over Treasuries and the "preference" of many Chinese economists for gold, are but a most clever salvo against the feckless efforts of America to have the Chinese "reform" their "unfair" trade policies. The Chinese are telling (us) Americans that you are in no position to dictate to us on currency, environmental or labor policies. Belief in the neo-liberal, oxymoronic construct of "free trade" is leading to a long, overdue comeuppance.

Watch gold. Looks like there's been on balance accumulation going on for some time.

I am definitely a little worried

Something lost in translation?

Local beggars selling sovereign bonds made a trip to China too. The results were not published but I think that it didn't go well.

_{--Sell Alaska to China!}

... what only seems to be. Fiat, paper currencies are only as strong as the "Full Faith & Credit" which we give to the respective goverments. I don't think that Chinese leaders want to push "Chimerica" off a cliff, at least anytime soon. Their elites (read: 70 million Party Members) have way too much to lose! But, I do think that they are much smarter than American Elites and are developing a back-up strategy (gold) should Chaos Theory come into play here.

Prime Minister Wen and China are just slowly reeling in the big fish, a little bit at a time.

It's the so-called "nightmare dance", US and China are tangled up and dancing at the edge of the precipice. One can't currently survive without the other.

But China has much more discipline and much more patience.

"We are concerned about the safety of our assets." Just reeling in the big fish, a little bit at a time.

Comment on Talk Left

In plain words, the Chinese may be giving ammunition to the fiscal scolds in the US Congress who oppose deficit spending directed towards actually helping the people of the US.

_{Tolerating prostitution is tolerating abuse and torture of women and children.}

Who owns America's debt?

Find out which countries are propping up the economy

Premier's tough talk aside, China's fortunes tied to U.S.

By Kevin G. Hall | McClatchy Newspapers

WASHINGTON — The Chinese prime minister's blunt warning on Friday that he fears that his nation's investments in U.S. financial assets may be endangered signals both a need to distract attention from troubles at home and how interrelated the two giant economies have become, analysts said.

Prime Minister Wen Jiabao got the attention of Wall Street and Washington when he said during a news conference that his nation had "lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried."

China holds more than $1 trillion in U.S. government debt. Much of its vast foreign currency reserves are in U.S. dollars. If the dollar collapsed or U.S. inflation spiked, the value of those assets could decline sharply. Those scenarios seem highly unlikely but aren't impossible.

The White House fired back at Wen, with spokesman Robert Gibbs noting in his daily briefing that the Obama administration's aggressive actions to right the listing economy help both nations.

"I think the best thing we can do to assure anybody in Washington, America or throughout the world that we're serious is to pass the president's budget and put ourselves back on the path towards fiscal sustainability and fiscal responsibility," Gibbs said. He added that there's "no safer investment in the world than in the United States."

Prime Minister Wen's comments were surprising because the Obama administration has repeatedly praised China for also undertaking a big fiscal stimulus program to spark economic activity amid a downturn.

Why the sudden tough talk from China? Experts suggested that Chinese leaders are feeling the heat at home as the nation's blistering economic growth rate has slowed sharply because of the global downturn.

"They want to keep alive the idea that this problem is a foreign problem, thrust upon them," said Albert Keidel, a China expert at the Carnegie Endowment for International Peace and a longtime former China hand at the Treasury Department.

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Fallows has an excellent article in the Atlantic Monthly about how badly China has been hit.

http://www.theatlantic.com/doc/200904/chinese-innovation

The people have been restless for the Chinese government to spend money building up infrastructure, but that's a catch 22: as soon as they do, Chinese labor gets more educated and more expensive, and they might lose their low-wage factories... and they'd get unemployment. So they decided to go with "safe" US treasury bills.

This has been an issue for 5 years now.

Now that the economy has gone belly-up, the Chinese now have the unemployment numbers they feared, but without any of the infrastructure they could have built. And now, those much lauded T-Bills might not be worth much at all...

China screwed up. Their leaders need to save face.

--
http://bexhuff.com
Of COURSE you can trust the US Government! Just ask the Indians.

The metaphor I've heard is that China & the US are two scorpions in a jar. Stinging the other is mutually assured destruction since it places one in position to be stung.

Another point: foreign policy generally occurs in private; domestic policy occurs in public. Whatever a leader rants about another country is usually intended for domestic consumption. China's growth has been quite a bubble all on its own and the popping is not a happy place.

About the Underwear Incident: how was this reported inside China, and was it reported at all? Was it a Navy operation trying to curry favor with the big shots?

"Turning Japanese I think I'm Turning Japanese I really think so da-da-da det det det det" - The Vapors

Pelosi still hammers China
By GLENN THRUSH | 3/18/09 4:28 AM EDT

House Speaker Nancy Pelosi was in a familiar position last week, rising in the well of the House to denounce China’s human rights record as she has on dozens of occasions — this time to decry the “hell on earth” the regime has created in Tibet since exiling the Dalai Lama 50 years ago.

Since the early 1990s, when freshman Rep. Pelosi attracted attention by raising a pro-democracy banner in Tiananmen Square, she’s crusaded against China’s policies toward Tibet, Darfur and its homegrown democratic movements. Chinese leaders have returned the favor, ridiculing Pelosi as an “ill-tempered” and misinformed “twister” of the truth and a hypocritical chief of “the moral police.”

Pelosi’s rhetoric hasn’t changed much in the past two decades, but her situation has. She now finds herself in the awkward position of hammering China on human rights while pushing through trillions in spending packages that rely on massive purchases of U.S. debt by the cash-hoarding Chinese government.

The precariousness of Pelosi’s position was driven home by Chinese Premier Wen Jiabao. Less than 24 hours after Pelosi’s floor speech, he told the world press he was “worried” about the impact of the U.S. deficit on the value of billions in treasuries held by Beijing.

“Nancy Pelosi’s predicament with China embodies the larger U.S. predicament with China,” said Nina Hachigian, senior vice president at the left-of-center Center for American Progress Action Fund and co-author of a recent analysis of U.S.-China relations.

“On one hand, there’s this conflict on human rights; on the other hand, there’s this tremendous interdependence,” she added. “We need their help on the economic crisis, global warming, North Korea and a host of other issues. And in many ways, they are being as helpful as many of our allies, especially when they passed a stimulus of the magnitude that [Treasury Secretary] Tim Geithner has demanded. So Pelosi will have to balance that.”

So far, Pelosi, whose San Francisco district contains one of the largest Chinese-American populations of any in the country, has shown little sign of softening her stance, at least publicly.

“The speaker will continue to speak out on the human rights situation in China,” said Pelosi spokesman Brendan Daly. “As the speaker has said many times, if we do not speak out for human rights in China and Tibet, then we have lost all moral authority to speak out for it other places.”

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