While the US continues to print enormous sums of money to service existing debt, China has recently been a sobering rock in the stream, warning that America may be over extending itself with its soaring deficits and low savings rate. Over here, Bernanke and Geithner testify before congress and appear on news interviews with carefully crafted statements concerning the stability of our financial house. The old maxim that "you can fool all of the people some of the time, and some of the people all of the time" characterizes their public comments. But you can't fool the Chinese!
When US Treasury Secretary Tim Geithner recently addressed students at Peking University he tried to assure him that the massive Chinese investment in the US was, as he put it, "very safe." The audience broke out in loud, unrestrained laughter! China has also not minced words when it strongly suggested that the US had better guarantee the $768 billion it presently holds in Treasury Certificates. And other actions, such as approving the use of Yuan in direct trade deals, (formerly conducted in dollars), and suggesting that the dollar be replaced by a basket of other currencies as the world's reserve, all hint at China's growing unease with the sad state of US finances.
China, already known as the manufacturing center of the world, is the one country that continues to grow in spite of the recession. It is perhaps ironic that GM was forced to sell off its Hummer line to a Chinese company, passing the baton in a strange symbolic sense as the US auto industry dies. Why China would want to buy this ugly and inefficient vehicle design escapes me, but they will eventually realize that Hummers and all their SUV brothers are doomed to extinction, relics of a culture of excess that has characterized the last 50 years here in the US.
Commercials for Hummers once showed frustrated guys in grocery store lines buying vegetables and being embarassed by chunky men ahead of them in line who were ringing up two inch thick steaks. The solution? Buy a Hummer! The next scene in the commercial showed the vegetarian fellow smirking behind the wheel of a Hummer, the T-Rex of all SUVs, and the vehicle of choice for California's very own Terminator, Arnold Schwartzenneger. I wonder how Hummers will be advertized in China? Will Guan-Yu and The Jade Emperor be pictured in the front seat, with the Eight Immortals riding in the back?
The US should well consider just how long China will continue to buy up our debt, our excessive Hummers and other assets before they come to the conclusion that Uncle Sam is no longer a good investment! Me? I think I'll settle down with a nice Chinese lady and start learning Mandarin.
When US Treasury Secretary Tim Geithner recently addressed students at Peking University he tried to assure him that the massive Chinese investment in the US was, as he put it, "very safe." The audience broke out in loud, unrestrained laughter! China has also not minced words when it strongly suggested that the US had better guarantee the $768 billion it presently holds in Treasury Certificates. And other actions, such as approving the use of Yuan in direct trade deals, (formerly conducted in dollars), and suggesting that the dollar be replaced by a basket of other currencies as the world's reserve, all hint at China's growing unease with the sad state of US finances.
China, already known as the manufacturing center of the world, is the one country that continues to grow in spite of the recession. It is perhaps ironic that GM was forced to sell off its Hummer line to a Chinese company, passing the baton in a strange symbolic sense as the US auto industry dies. Why China would want to buy this ugly and inefficient vehicle design escapes me, but they will eventually realize that Hummers and all their SUV brothers are doomed to extinction, relics of a culture of excess that has characterized the last 50 years here in the US.
Commercials for Hummers once showed frustrated guys in grocery store lines buying vegetables and being embarassed by chunky men ahead of them in line who were ringing up two inch thick steaks. The solution? Buy a Hummer! The next scene in the commercial showed the vegetarian fellow smirking behind the wheel of a Hummer, the T-Rex of all SUVs, and the vehicle of choice for California's very own Terminator, Arnold Schwartzenneger. I wonder how Hummers will be advertized in China? Will Guan-Yu and The Jade Emperor be pictured in the front seat, with the Eight Immortals riding in the back?
The US should well consider just how long China will continue to buy up our debt, our excessive Hummers and other assets before they come to the conclusion that Uncle Sam is no longer a good investment! Me? I think I'll settle down with a nice Chinese lady and start learning Mandarin.
