Wednesday, July 07, 2010

China's Threat to Obama: Listen to that Idiot Krugman at Your Own Peril

The message from China's Foreign Exchange Bureau (SAFE) couldn't be any more clear if it was flashed in blinking red letters on the President's teleprompter. China wants him to return to free-market capitalism. To stop the deficit spending. To stop borrowing. Because Papa Mao ain't gonna foot the bills much longer.

[SAFE} acknowledged that financial markets were very concerned at one point that massive U.S. government borrowing would drive the U.S. currency lower...

But it said economic conditions elsewhere were also a factor in determining the dollar's trend. The euro zone, for instance, was struggling with high government debt levels.

"We must recognize that any depreciation of the dollar is relative to other countries, and other countries or regions also have this or that problem," SAFE said.

Translation: you ain't the only dog in the hunt.

One of the prime concerns of Chinese Internet commentators is that a long-term decline in the dollar or euro will erode the value of SAFE's portfolio.

To that end, SAFE called on the United States and other major countries to take "responsible measures" to maintain the value of their currencies...

This meant withdrawing monetary stimulus in a reasonable manner and relying less on deficit spending.

"Responsible measures" == "no more stimulus packages == "stop deficit spending" == "look elsewhere for loans" == "Got that, Mr. Paul 'Douche-Nozzle' Krugman?"

Conclusion: The People's Republic of China is now officially to the right of Barack Obama.


Hat tip: Zero Hedge.

3 comments:

Winghunter said...

FDR's policies prolonged Depression by 7 years, UCLA economists calculate. Aug 2004

"...The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes," Cole said. "Ironically, our work shows that the recovery would have been very rapid had the government not intervened." -UCLA-

http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx

Whitehall said...

I've long predicted that the US response to the economic tactics of China would include inflating our way out of debt.

In a way, China making good on the threat to stop financing our gov't debt would be an act of tough love.

The US government would then be like a drunk who finally hits bottom. Without foreign purchases of our Treasury notes and bills, fiscal responsibility might once again prevail.

PolticalJunkie2008 said...

This is the rebuttal to Chris Matthews ridiculous predictions from this video.

What is MSNBC’s Chris Matthews Thinking? http://mittromneycentral.com/2010/07/07/what-is-msnbcs-chris-matthew-thinking/

Once you watch this video, you’ll be wondering the same thing. It’s baffling.