It could be an indication that the Obama administration's economic policies are on the wrong track when communist China is offering the best advice regarding the U.S. economy.
According to the Wall Street Journal ,Liu Mingkang, chairman of the China Banking Regulatory Commission, said that a weak U.S. dollar and low U.S. interest rates had led to "massive speculation" that was inflating asset bubbles around the world. . ." "Bubble" :sound familiar?
The ironic part . . . they are probably correct. A weak dollar, caused in part by federal and trade deficits, helps exports by making products cheaper overseas but erodes wealth in all the other sectors of the economy. And, it can drive inflation and interest rates upward. Unchecked, a weak dollar could result in a repeat of the mistakes of the 1970s and "stagflation," a painful combination of a stagnant economy and inflation.
In the short term, the weak dollar is boosting the stock market by making U.S. exports cheaper; but this is a short-term fix. The administration needs to take prompt and decisive steps to strengthen the dollar to help ensure the viability of the U.S. economy for the long term.
Comments
Interesting how somebody who works for a country that is notorious for violating human rights is lecturing us on the economy. Ridiculous if you ask me. There's a great blog by Leo Wells at the Leo Wells blog site that has a great positive but realistic look at how the economy is and what we should be doing. Good reading.
The purpose of Obama's visit was to beg China to prop up the American dollar. Hu Jintao laughed in his face. Look, the Chinese didn't accrue a $2 TRILLION surplus by following the business plan of the Americans who have a $12 TRILLION dollar deficit. Why would they want to tether their ship to the U.S.S. Titanic?
China is very similar to post-WW2 America. The average chinese has good moral values, good work ethic, family oriented, saves their money, etc. Sum those factors and you see a China that is in a strong position socially and financially.
America is like Rome before its fall. Americans have morals that would make Sodom and Gomorrah blush, poor work ethic, family structure is in tatters, borrows and stays permanently in debt, etc. Sum those factors and you have an America on the edge of social and financial collapse.
China is the future, America is the past. China is rising, America is sinking.
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