Wen Voices Concern Over China’s U.S. Treasurys - WSJ.com
BEIJING — Premier Wen Jiabao voiced confidence in China’s economy, saying his government’s finances give it room to spend even more to support growth if needed, but expressed concern about the outlook for the U.S. and the safety of its Treasury bonds.
The forceful comments from Mr. Wen’s annual press conference — a rare opportunity for domestic and foreign reporters to ask a top Chinese official questions directly — helped depress the U.S. dollar and prices of U.S. Treasurys in Asian trading Friday.
What possible downside could there be to having Red China finance our spending sprees here in the US?
If you think the Saudis and the rest of the global oilbags have an untoward amount of influence over our economy, well, you ain’t seen nothing yet.
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Barrons article on Austrian analysis
The article above serves as preview to Wen’s comments. I disagree with Forsyth’s final conclusion (the final bubble to pop is US Treasuries prices - meaning yields will rise or the USD will crash - or both. So will most other currencies crash too if they practice Quantitative Easing.). I believe that the Chinese concern derives directly from Austrian analysis though I couldn’t tell if Wen or any other Chinese bureaucrat ever heard of Hayek or Von Mises either.
As an aside: I too was a business major in college and have an MBA from NYU in (International) Finance. I never heard of Hayek or Von Mises or Rothbard until about 2001 either. That’s a decade after I finished my formal studies as well. Amazing how even our better than most of the rest of the world post-graduate education system is failing us in even these simple things.
As I momentarily stand off to one side of this whole contretemps (pardonnez the French - somehow, that language always manages to expess essential absurdities, right?), one very darkly humorous aspect strikes me: Should we actually manage to bumble into any sort of open physical conflict with China anytime in the near future (say, the next decade or so), a substantial part of our end of the war-materiel butcher’s bill would be covered by the Chinese themselves…
Of course, should such a horrid circumstance actually occur, any possible vestige of humor, dark or otherwise, in that ironic situation would, no doubt, be utterly lost on both sides…