With the Fed purchasing Treasuries, thus lowering the value of the dollar, China is alarmed that its purchase of Treasuries will suffer. Oh my.
U.S. purchases of Treasuries are “irresponsible” because they may weaken the dollar, Li Xiangyang, of the government- backed Chinese Academy of Social Sciences, told a forum in Beijing today. “Chinese leaders are likely to articulate their concern to their U.S. counterparts strongly and ask for specific measures.”
Fed purchases of Treasuries are “irresponsible” because of the dollar’s role as a global reserve currency and the possibility that other nations will devalue their currencies should the dollar keep falling, Li said.
China, of course, has already been playing the devaluation game to support its exports. Being responsible is a hat China loves to wear–and never share.
On the other hand, I am not sure how reassuring it is that the Fed might pinch-hit as the lender of last resort. Too bad we never saved anything for a rainy day, let alone a hurricane. Have no fear, the Fed is here: An umbrella in a storm.
A Fed report says that it can raise interest rates to recapture all those trillions entering the economy. Hyperinflation is the risk, of course. Why does it seem that every action brings greater risks? We should thank those whose unwavering greed found this delightful bog of quicksand. Bonuses all a round!
Meanwhile the twists in the AIG bailout continue to amuse.
Treasury Department preserved a payday for five banks that was worth almost 200 times the bonuses handed out at American International Group, Inc., through a government rescue.
As part of a bid to prevent the insurer’s failure, the U.S. settled derivatives and loan contracts worth $32.7 billion with Goldman Sachs Group, Inc., Merrill Lynch & Co., Societe Generale, Deutsche Bank AG, and UBS AG. That’s about half the $66.7 billion that those companies, the five biggest beneficiaries of loans and capital infusions for AIG, said they spent on pay and benefits last year for employees, some of whom created or traded toxic subprime assets that proved deadly for lenders.
On a more humorous front, cheap Asian condoms are about to hit the bedrooms.
We doctors know
a hopeless case if–listen: there’s a hell
of a good universe next door. let’s go.