whats it mean when the chinese start quoting ben franklin

S

SmarterthanYou

rebel
China-alarmed-by-US-money-printing
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.
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no denying the Chinese are going to be the next superpower. We shall see how it goes when there people begin to demand more then slaves wages.
 
Chapdog said:
no denying the Chinese are going to be the next superpower. We shall see how it goes when there people begin to demand more then slaves wages.
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Manufacturing will move to Korea, then to Indonesia... that's what will happen when they demand more than slave wages.
 
What does it mean? I think it means Ben has decendents in China
 
Damocles said:
Manufacturing will move to Korea, then to Indonesia... that's what will happen when they demand more than slave wages.
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I think that Indonesia and Korea are ahead of China in Wages. North Korea perhaps.
It will be a while before China needs to consider moving it's manufacturing anywhere though.
 
AssHatZombie said:
They don't own us. The deal hasn't gone through yet.

Until then, they have no say.

if we destoy the currency they can't buy us. That may be the best option.
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Tell me that was satire.

China's economic 'bargaining chip / 'Massive holdings in U.S. create 'financial muscle'

China’s currency reserves have kept growing since 2004, in tandem with its ever-expanding trade surpluses and foreign direct investment, which has built many of China’s export-generating factories. So-called “hot money” has also been pouring into China seeking to reap the gains from its slowly appreciating currency.

Not surprisingly, China’s foreign-exchange reserves have soared, quadrupling from $450 billion in early 2004 to more than $1.8 trillion today. The International Monetary Fund expects China’s currency reserves will exceed $2.4 trillion by next year.

China’s holdings of U.S. securities have increased from $300 billion in March 2004 to more than $900 billion in June 2007, the latest date for which data are available. Given America’s $250 billion trade deficit with China over the past year and the steady stream of money pouring into the country from abroad, economists believe China probably holds nearly $1.2 trillion in U.S. securities today, mostly Treasuries and corporate bonds.

And that doesn’t include the roughly $140 billion in U.S. securities held by Hong Kong.

... China, particularly through its central bank, has become the primary financier of America's budget deficit by using much of its trade surplus with the United States to purchase Treasury debt. At the end of fiscal 2007, China owned 21 percent of the U.S. publicly held debt that was owned by foreigners, and it was buying more than half of the new debt being issued by the federal government.

The Nuclear Option

China's state-run media has begun expanding upon Mr. Summers' "balance of financial terror" metaphor by occasionally threatening to exercise China's "nuclear option." That is the explicit threat to dump massive amounts of dollars on world markets to turn the steady decline of the dollar into a complete rout.

That could force big increases in U.S. interest rates and push the economy into a prolonged recession, analysts say.

-- more at link
http://www.washingtontimes.com/news/2008/jul/27/chinas-economic-bargaining-chip/?page=2

They get to have a say in US monetary policy.
 
SmarterThanYou said:
this is the object of the dems to help create a crisis. if inflation starts going up, watch the blame be put on things like not being able to pass healthcare.
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Yep the China/US finiancial situation got this way in 8 months....

As Spock said. Only Nixon can go to China.
 
Topspin said:
It means I now buy Chineese stocks too.
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Toppy profiteering from the downfall of America.
Does that suprise anyone?

All we have to do is buy Chinese stocks and America will be great again :usflag:

I will bet you do all your shopping at Wally World too?
 
LOL, the Chinese are pissed that they're policy of keeping the Yuan artificially inflated below the dollar by buying US debt is now putting them in the shitter.
 
uscitizen said:
Toppy profiteering from the downfall of America.
Does that suprise anyone?

All we have to do is buy Chinese stocks and America will be great again :usflag:

I will bet you do all your shopping at Wally World too?
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spoken like a true GED, at least you show your level:321:
 
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