China is constantly telling the West to stay out of its internal affairs, but it rarely seems shy in complaining about the way the US manages itself, particularly in the field of economic policy. Ahead of his official visit to the White House, President Hu Jintao has been at it again. In written responses to questions from the Washington Post and the Wall Street Journal, he has again criticised the recent stimulus measures adopted by the US Federal Reserve.
Here’s the relevant quote: “The monetary policy of the US has a major impact on global liquidity and capital flows and therefore, the liquidity of the dollar should be kept at a reason and stable level”.
via telegraph blogs in UK. Premier Hu's justification for current demands:
You really can't blame them, can you? If you bought something that had a certain value, and then saw the guy you bought it from do everything in his power to make it worthless, wouldn't _you_ want to intervene?
ReplyDeleteReminds me of back in the early 80's when my wife bought some gold at $800 an ounce. A short while later, the price dropped back down to around $400. She (and I) weren't very happy about that.
If China can force the Fed to stop devaluing our currency, I say more power to them. Our elected representatives certainly aren't doing anything about it. Perhaps China should offer to call the "note" while the dollar still has some value? Maybe then the Fed would back off from their insane QE2 and other plans to print another trillion or so.
I understand why China is doing what it is doing. I would only apply the word "blame" to the Fed's policy and their yes-men in the White House and Congress. I don't believe they were ever "independent" of political influence at the Fed.
ReplyDeleteIf China or the Fed manipulates our currency, it will be in their own interest. I have a hard time believing Chinese control or continued Fed control will be in the interest of the American taxpayer.
True story. Just to be clear, I was not speaking of Chinese control of our currency, merely a reasonable response that might possibly force the Fed to act in a more responsible manner. So, although it wouldn't be their actual intent, such a response (not "control", mind you) from the Chinese might indeed be in the interest of the American taxpayer.
ReplyDelete