Another global financial crisis triggered by a loss of confidence in the dollar may be inevitable unless the U.S. saves more, said Yu Yongding, a former Chinese central bank adviser.
It’s “very natural” for the world to be concerned about the U.S. government’s spending and planned record fiscal deficit, Yu said in e-mailed comments yesterday relating to a visit to Beijing by U.S. Treasury Secretary Timothy Geithner.
The Obama administration aims to reduce the fiscal deficit to “roughly” 3 percent of gross domestic product from a projected 12.9 percent this year, Geithner reaffirmed today. The treasury secretary added that China’s investments in U.S. financial assets are very safe, and that the Obama administration is committed to a strong dollar.
It may be helpful if “Geithner can show us some arithmetic,” said Yu. “We need to know how the U.S. government can achieve this objective.”
The US will continue to have financial crisis’ until we gain our own manufacturing base, and stop putting our farmer’s out of business, the US will continue to have financial crisis’ as long as we allow the rest of the world, China included, to slap tariffs on goods imported into their countries, while we don’t put tariffs on any goods imported into our country. China and the rest of the world, slap a 19% (at the low end) tariff on imports, as a means to protect their own domestic manufacturing, which encourages US firms to move to their countries so they can sell in those countries without the tariff, they then feel entitled to shut down their US presence because they can ship to the US without any tariff.
China doesn’t care about our realities, they only care about strangling our country, because they hope to be able to buy our infrastructure and resources as we slowly starve to death economically.
“Arithmetic” hasn’t been our strong suit, I’m afraid . . . .
Bruce Robison
Well said, BMR+!
Easy for Yu to say,
I thought the Obama Administration wanted us to [b]SPEND[/b] our way out of the ‘recession’???
They openly laughed at Geithner as he made the statement. Yu went to school in the US. He stated earlier this year that the US should be a little more gracious toward those who are holding their debt.